G.R. No.

L-28280-81      November 28, 1969

GERONIMO DE LOS REYES, petitioner,

vs.
GREGORIO ESPINELI, RUPERTO ALCANTARA, JORGE LOBREN, PEDRO AMANTE, MATEO GUTIERREZ, ISIDRO
RAMOS, SANTOS DANGUE, MIGUEL RAMOS, CORNELIO GARCIA, MARGARITO BELARMINO, IRENEO
BATRALO, SIMPLICIO CASTRO, VICENTE ANIVES, MIGUEL HERNANDEZ, EUGENIO DALISAY, LEON
LACSAMANA, and BELEN ALVAREZ, respondents.

Luis A. L. Javellana and Yolanda Q. Javellana for petitioner.

Manuel A. Cordero for respondents.

CASTRO, J.:

Petition for review of the decision of the Court of Appeals in C.A.-G.R. No. 37689-R and C.A.-G.R. No. 37690-R modifying
that of the Court of Agrarian Relations in CAR cases 1185 and 1186.

The petitioner Geronimo de los Reyes is the owner of a 200-hectare coconut plantation located in Calauan, Laguna. In
1958 his overseer ("katiwala") therein was Gonzalo Belarmino, who took into the land the 17 respondents under an
agreement that the latter were to receive 1/7 portion of every coconut harvest. Sometime in October, 1962, the petitioner
dismissed Belarmino, upon the suspicion that the latter had been deceiving him, in connivance with the respondents.

On March 2, 1963 Ruperto Alcantara, et al., and Gregorio Espineli (respondents here) filed separate petitions
(subsequently amended) against De los Reyes in the Court of Agrarian Relations, seeking the delivery to them of the
difference between the 1/7 share which the petitioner had been giving them and the 30% share to which they, as share
tenants, were allegedly entitled. Upon the finding that the respondents were mere agricultural workers of the petitioner,
the CAR ordered the de los Reyes to retain them as such and to pay them the sum of P4,559.07 "which is the total of their
unpaid share of 1/7 of the net coconut harvests for the period from September 13 to December 23, 1962 and February 25
to May 28, 1963," plus P500 as attorney's fees. Upon respondents' appeal, the Court of Appeals modified the decision of
the CAR, by declaring the respondents tenants of the petitioner and ordering the de los Reyes to pay them "the difference
between the one-seventh (1/7) share of the crops and the thirty (30%) per cent provided for in the Tenancy Law from the
year 1958 up to the filing of the petitions and so on; the resulting amount for this purpose to be arrived at in a liquidation to
be submitted, if and when this judgment shall have become final and the record remanded to the lower court."

Basically, the petitioner contends that (1) there existed no contractual relationship between him and the respondents; (2)
the respondents were not his tenants; and (3) the decision of the Court of Appeals deprives him of his property without
due process of law.

The respondents attempted to have the present appeal dismissed on the ground that it involves questions of fact. If
indeed the issues posed by the petitioner necessarily invite calibration of the entire evidence,1 then the appeal should be
dismissed since issues only of law may be raised in an appeal from the Court of Appeals to this Court.2 It seems to us
clear, however, that the petitioner accepts the findings of fact made by the appellate court, but takes exception to the
conclusions drawn therefrom. Such being the case, the questions here tendered for resolution are purely of law.3

At the outset, we must resolve the question of existence of a contract, the petitioner alleging, as he does, that his consent,
express or implied, had never been given. His position, simply stated, is that at the time the respondents were taken into
his land by Belarmino, the latter was a mere laborer and therefore without the requisite authority to contract in his behalf,
and it was only later that he was promoted to the position of overseer. However, in his "Amended Complaint" of April 22,
1968,4 the petitioner prayed that "judgment be rendered ... finding the defendants guilty of a breach of their contractual
obligation with the plaintiff," and in the body thereof he incorporated statements from which it can plainly be seen that a
contractual relationship existed between the parties.

Verily, there was and still is a contractual relationship between the petitioner and the respondents. In our view the pith of
the problem is, actually, whether the relationship is that of agricultural share tenancy (as averred by the respondents) or
that of farm employer and agricultural laborer (as asserted by the petitioner). On a determination of this question depends
the respective rights of the parties, more particularly the proper assessment of the share of the respondents under the
law.

Of fundamental relevance in this discussion are definitions of basic terms.

"Agricultural tenancy" is the physical possession by a person of land devoted to agriculture belonging to, or legally
possessed by, another for the purpose of production through the labor of the former and of the members of his immediate
farm household, in consideration of which the former agrees to share the harvest with the latter, or to pay a price certain
or ascertainable, either in produce or in money, or in both.5 "Share tenancy" exists whenever two persons agree on a joint
undertaking for agricultural production wherein one party furnishes the land and the other his labor, with either or both
contributing any one or several of the items of production, the tenant cultivating the land personally with the aid of labor
available from members of his immediate farm household, and the produce thereof to be divided between the landholder
and the tenant in proportion to their respective contributions.6 And a "share tenant" is a person who, himself and with the
aid available from within his immediate farm household, cultivates the land belonging to or possessed by another, with the
latter's consent, for purposes of production, sharing the produce with the landholder."7

It is to be readily deduced from the foregoing definitions that aside from the usual essential requisites of a contract,8 the
characteristics of a share tenancy contract are: (1) the parties are a landholder, who is a natural or juridical person and is
the owner, lessee, usufructuary or legal possessor of agricultural land,9 and a tenant who, himself and with the aid
available from within his immediate farm household, cultivates the land which is the subject-matter of the tenancy; (2) the
subject-matter is agricultural land; (3) the purpose of the contract is agricultural production; and (4) the cause or
consideration is that the landholder and the share tenant would divide the agricultural produce between themselves in
proportion to their respective contributions.

While the Agricultural Tenancy Act did not define the term "agricultural laborer" or "agricultural worker," the Agricultural
Land Reform Code does. A "farm worker" is "any agricultural wage, salary or piece worker but is not limited to a farm
worker of a particular farm employer unless this Code explicitly states otherwise, and any individual whose work has
ceased as a consequence of, or in connection with, a current agrarian dispute or an unfair labor practice and who has not
obtained a substantially equivalent and regular employment." The term includes "farm laborer and/or farm
employees."10 An "agricultural worker" is not a whit different from a "farm worker."

From the definition of a "farm worker" thus fashioned, it is quite apparent that there should be an employer-employee
relationship between the "farm employer"11 and the farm worker. In determining the existence of an employer-employee
relationship, the elements that are generally considered are the following: (1) the selection and engagement of the
employee; (2) the payment of wages; (3) the power of dismissal; and (4) the employer's power to control the employee's
conduct. It is this last element that constitutes the most important index of the existence of relationship.12

This is not to say that agricultural workers or farm laborers are industrial workers. Not by any means, although they may
both appear in the same establishment. The difference lies in the kind of work they do. Those whose labor is devoted to
purely agricultural work are agricultural laborers. All others are industrial workers.13 Nonetheless, they belong to the same
class. Both are workers. Both are employees.

We are here primarily interested in the basic differences between a farm employer-farm worker relationship and an
agricultural sharehold tenancy relationship. Both, of course, are leases, but there the similarity ends. In the former, the
lease is one of labor, with the agricultural laborer as the lessor of his services, and the farm employer as the lessee
thereof.14 In the latter, it is the landowner who is the lessor, and the sharehold tenant is the lessee of agricultural land. As
lessee he has possession of the leased premises.15 But the relationship is more than a mere lease. It is a special kind of
lease, the law referring to it as a "joint undertaking."16 For this reason, not only the tenancy laws are applicable, but also,
in a suppletory way, the law on leases, the customs of the place and the civil code provisions on partnership.17 The share
tenant works for that joint venture. The agricultural laborer works for the farm employer, and for his labor he receives a
salary or wage, regardless of whether the employer makes a profit.18 On the other hand, the share tenant participates in
the agricultural produce. His share is necessarily dependent on the amount of the harvest.

Since the relationship between farm employer and agricultural laborer is that of employer and employee, the decisive
factor is the control exercised by the former over the latter. On the other hand, the landholder has the "right to require the
tenant to follow those proven farm practices which have been found to contribute towards increased agricultural
production and to use fertilizer of the kind or kinds shown by proven farm practices to be adapted to the requirements of
the land." This is but the right of a partner to protect his interest, not the control exercised by an employer. If landholder
and tenant disagree as to farm practices, the former may not dismiss the latter. It is the court that shall settle the conflict
according to the best interests of both parties.19

The record is devoid of evidentiary support for the notion that the respondents are farm laborers. They do not observe set
hours of work. The petitioner has not laid down regulations under which they are supposed to do their work. The argument
tendered is that they are guards. However, it does not appear that they are under obligation to report for duty to the
petitioner or his agent. They do not work in shifts. Nor has the petitioner prescribed the manner by which the respondents
were and are to perform their duties as guards. We do not find here that degree of control and supervision evincive of an
employer-employee relationship. Furthermore, if the respondents are guards, then they are not agricultural laborers,
because the duties and functions of a guard are not agricultural in nature.20 It is the Industrial Court that has jurisdiction
over any dispute that might arise between employer and employee. Yet, the petitioner filed his complaint against the
respondents in the Court of Agrarian Relations.

We now proceed to determine if there are present here the salient characteristics of an agricultural share tenancy
contract. The subject-matter is coconut land, which is considered agricultural land under both the Agricultural Land
Tenancy ACT21 and the Agricultural Land Reform Code.22 The purpose of the contract is the production of coconuts; the
respondents would receive 1/7 of the harvest. The petitioner is the landholder of the coconut plantation.

The crucial factors are that the tenant must have physical possession of the land for the purpose of production23 and he
must personally cultivate the land. If the tenant does not cultivate the land personally he cannot be considered a tenant
even if he is so designated in the written agreement of the parties.24

"Cultivation" is not limited to the plowing and harrowing of the land. It includes the various phrases of farm labor described
and provided by law, the maintenance, repair and weeding of dikes, paddies and irrigation canals in the holding.
Moreover, it covers attending to the care of the growing plants.25 Where the parties agreed that they would "operate a
citrus nursery upon the condition that they would divide the budded citrus in the proportion of 1/3 share of respondents
and 2/3 as share of petitioner," and that the "petitioner would furnish all the necessary seedlings and seeds, as well as the
technical know-how in the care, cultivation, budding and balling of the budded citrus, while respondents would furnish the
land necessary for the nursery, the farm labor that may be needed to plant and cultivate, and all the chemicals, fertilizers,
and bud tapes that may be necessary for such cultivation," then "the tenancy agreement entered into between the parties
has relation to the possession of agricultural land to be devoted to the production of agricultural products thru the labor of
one of the parties, and as such comes within the purview of the term 'agricultural tenancy' as defined in section 3 of
Republic Act No. 1199 as amended."26

In one instance,27 the landholder claimed that his caretaker was not an agricultural tenant because he "does not till or
cultivate the land in order to grow the fruit bearing trees because they are already full grown," and "he does not even do
the actual gathering of the fruits" but "merely supervises the gathering, and after deducting the expenses, he gives one-
half of the fruits to plaintiff all in consideration of his stay in the land." This Court's answer was to the point:

Anyone who has had fruit trees in his yard will disagree with the above description of the relationship. He knows
the caretaker, must water the trees, even fertilize them for better production, uproot weeds and turn the soil,
sometimes fumigate to eliminate plant pests, etc. Those chores obviously mean "working or cultivating" the land.
Besides, it seems that defendant  planted other crops, [i.e., cultivated the lot] giving the landowner his
corresponding share.

The Court of Appeals made some essential findings of fact. The respondents were called "kasama." They have plowing
implements. The respondent Pedro Amante even used to have a carabao which he subsequently exchanged for a horse.
Almost all of the respondents have banana plantations on the land. They live in the landholding. They are charge with the
obligation to clean their respective landholdings. Certain portions of the land are planted to palay.

These factual findings may not be reviewed by the Supreme Court.28 Furthermore, the said facts are supported by the
testimony of the petitioner himself, who admitted that the respondents are his "kasama," although he tried to minimize the
effect of this admission by alleging that although called "kasama," the respondents "do not perform the work of a
"kasama," and that in Quezon the "kasama" plow the land, they plant rice, but here in Laguna, they do not do anything."
The appellate court was correct in concluding that "kasama" means "tenant,"29 not worker or laborer, which is translated
into our national language as "manggagawa."30 Respecting farm implements, the petitioner admitted that "they have the
implements," but again he tried to minimize the significance of his statement by adding that "they have not used it in the
farm." However, the report of the CAR clerk of court, based on his ocular inspection, pertinently states that he found
"certain portions planted with palay."

The petitioner cannot deny that the respondents were all living in the landholding and that "all of them have banana
plantation, small or big, "though he averred," not one single banana was given to me as my share."

We now come to the all-important question of whether the respondents have the duty to cultivate the land in order that the
trees would bear more coconuts. The petitioner's answers on cross-examination are quite revealing. Thus:

Q.       Where these petitioners duty bound to do any cleaning or clearing of the underbrush within the coconut
land?
 A.       These laborers clean the land from where . . . They are getting their food and subsistence.

COURT:       The question is that, are they duty bound to clean the landholding in question?

A.       To make my answer short, I say that the responsibility is to Gonzalo Belarmino, to him, because he is the
one who engaged them.

xxx      xxx      xxx

A.       One, to guard the property and use their names as threat to people who might ... have the intention of
stealing my coconuts, and two, to assist in the clearing of the land because that is the responsibility of Gonzalo
Belarmino. . . .31

Undeniably, the petitioner considers it one of the duties of the respondents to clear and clean the land. Additionally, in his
complaint the petitioner claimed that "the defendants have abandoned their posts at the plaintiff's plantation and have
likewise failed and refused to comply with their contractual obligation with the plaintiff to keep the areas respectively
assigned to them clean and clear of undergrowths and cogonal grass at all times, with the result that it is now impossible
for the plaintiff to harvest the mature coconuts as these would only be lost amid the undergrowth and cogonal which have
now grown to unreasonable heights, thereby causing further damage and prejudice to the plaintiff." (Emphasis supplied).

The petitioner clearly expected the respondents to perform the duties of a tenant, especially, to maintain the land clean
and clear "at all times," which not only would facilitate harvesting but, more importantly, would necessarily result in greater
production. As found by the CAR clerk of court during the ocular inspection,

the planting of palay has a direct effect on the growing of the coconuts because in the places he found planted
with palay, the coconut trees displayed white leaves gray in color with plenty of nuts or fruits, compared to the
portion in the hacienda where we encountered cogon grasses, under brushes and ipil-ipil tress, there is a need for
thorough cleaning, especially the ipil-ipil trees which are growing high for years already in-between the rows of
coconut trees.32

Therefore, the parties to the contract understood, in sum and substance, that the respondents were to "cultivate" the land.
Whether the latter had been remiss in the performance of their contractual obligations, does not affect the nature of the
contract which the appellate court analyzed and found to be that of share tenancy. It is the principal features and
stipulations which determine the true essence of a contract.33 Considering then that the respondents are duty bound to
cultivate their respective holdings (of which they have possession), and that they share in the harvest, the Court of
Appeals' conclusion must be upheld. This, especially in the light of the facts that the respondents raise secondary crops
and have their homes in their respective holdings.

The petitioner having entered into a share tenancy contract with the respondents, it certainly cannot be seriously claimed
that the relationship of landlord and tenant is unjustifiably being imposed on him without due process of law. It was the
petitioner himself who voluntarily entered the relationship, and, therefore, should shoulder the consequences thereof, one
of which is that the tenants must be given, as they are entitled to, a 30% share in the produce.34

ACCORDINGLY, the decision appealed from is affirmed, at petitioner's cost.

G.R. No. 79869 September 5, 1991

FORTUNATO MERCADO, SR., ROSA MERCADO, FORTUNATO MERCADO, JR., ANTONIO MERCADO, JOSE
CABRAL, LUCIA MERCADO, ASUNCION GUEVARA, ANITA MERCADO, MARINA MERCADO, JULIANA CABRAL,
GUADALUPE PAGUIO, BRIGIDA ALCANTARA, EMERLITA MERCADO, ROMEO GUEVARA, ROMEO MERCADO
and LEON SANTILLAN, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION (NLRC), THIRD DIVISION; LABOR ARBITER LUCIANO AQUINO,
RAB-III; AURORA L. CRUZ; SPOUSES FRANCISCO DE BORJA and LETICIA DE BORJA; and STO. NIÑO REALTY,
INCORPORATED, respondents.

Servillano S. Santillan for petitioners.

Luis R. Mauricio for private respondents.
PADILLA, J.:

Assailed in this petition for certiorari is the decision * of the respondent national Labor Relations Commission (NLRC)
dated 8 August 1984 which affirmed the decision of respondent Labor Arbiter Luciano P. Aquino with the slight
modification of deleting the award of financial assistance to petitioners, and the resolution of the respondent NLRC dated
17 August 1987, denying petitioners' motion for reconsideration.

This petition originated from a complaint for illegal dismissal, underpayment of wages, non-payment of overtime pay,
holiday pay, service incentive leave benefits, emergency cost of living allowances and 13th month pay, filed by above-
named petitioners against private respondents Aurora L. Cruz, Francisco Borja, Leticia C. Borja and Sto. Niño Realty
Incorporated, with Regional Arbitration Branch No. III, National Labor Relations Commission in San Fernando,
Pampanga.1

Petitioners alleged in their complaint that they were agricultural workers utilized by private respondents in all the
agricultural phases of work on the 7 1/2 hectares of ace land and 10 hectares of sugar land owned by the latter; that
Fortunato Mercado, Sr. and Leon Santillan worked in the farm of private respondents since 1949, Fortunato Mercado, Jr.
and Antonio Mercado since 1972 and the rest of the petitioners since 1960 up to April 1979, when they were all allegedly
dismissed from their employment; and that, during the period of their employment, petitioners received the following daily
wages:

From 1962-1963 — P1.50

1963-1965 — P2.00
1965-1967 — P3.00
1967-1970 — P4.00
1970-1973 — P5.00
1973-1975 — P5.00
1975-1978 — P6.00
1978-1979 — P7.00

Private respondent Aurora Cruz in her answer to petitioners' complaint denied that said petitioners were her regular
employees and instead averred that she engaged their services, through Spouses Fortunato Mercado, Sr. and Rosa
Mercado, their "mandarols", that is, persons who take charge in supplying the number of workers needed by owners of
various farms, but only to do a particular phase of agricultural work necessary in rice production and/or sugar cane
production, after which they would be free to render services to other farm owners who need their services.2

The other private respondents denied having any relationship whatsoever with the petitioners and state that they were
merely registered owners of the land in question included as corespondents in this case.3

The dispute in this case revolves around the issue of whether or not petitioners are regular and permanent farm workers
and therefore entitled to the benefits which they pray for. And corollary to this, whether or not said petitioners were illegally
dismissed by private respondents.

Respondent Labor Arbiter Luciano P. Aquino ruled in favor of private respondents and held that petitioners were not
regular and permanent workers of the private respondents, for the nature of the terms and conditions of their hiring reveal
that they were required to perform phases of agricultural work for a definite period of time after which their services would
be available to any other farm owner.4 Respondent Labor Arbiter deemed petitioners' contention of working twelve (12)
hours a day the whole year round in the farm, an exaggeration, for the reason that the planting of lice and sugar cane
does not entail a whole year as reported in the findings of the Chief of the NLRC Special Task Force.5 Even the sworn
statement of one of the petitioners, Fortunato Mercado, Jr., the son of spouses Fortunato Mercado, Sr. and Rosa
Mercado, indubitably show that said petitioners were hired only as casuals, on an "on and off" basis, thus, it was within the
prerogative of private respondent Aurora Cruz either to take in the petitioners to do further work or not after any single
phase of agricultural work had been completed by them.6

Respondent Labor Arbiter was also of the opinion that the real cause which triggered the filing of the complaint by the
petitioners who are related to one another, either by consanguinity or affinity, was the filing of a criminal complaint for theft
against Reynaldo Mercado, son of spouses Fortunate Mercado, Sr. and Rosa Mercado, for they even asked the help of
Jesus David, Zone Chairman of the locality to talk to private respondent, Aurora Cruz regarding said criminal case.7 In his
affidavit, Jesus David stated under oath that petitioners were never regularly employed by private respondent Aurora Cruz
but were, on-and-off hired to work and render services when needed, thus adding further support to the conclusion that
petitioners were not regular and permanent employees of private respondent Aurora Cruz.8
Respondent Labor Arbiter further held that only money claims from years 1976-1977, 1977-1978 and 1978-1979 may be
properly considered since all the other money claims have prescribed for having accrued beyond the three (3) year period
prescribed by law.9 On grounds of equity, however, respondent Labor Arbiter awarded petitioners financial assistance by
private respondent Aurora Cruz, in the amount of Ten Thousand Pesos (P10,000.00) to be equitably divided among an
the petitioners except petitioner Fortunato Mercado, Jr. who had manifested his disinterest in the further prosecution of his
complaint against private respondent.10

Both parties filed their appeal with the National Labor Relations Commissions (NLRC). Petitioners questioned respondent
Labor Arbiter's finding that they were not regular and permanent employees of private respondent Aurora Cruz while
private respondents questioned the award of financial assistance granted by respondent Labor Arbiter.

The NLRC ruled in favor of private respondents affirming the decision of the respondent Labor Arbiter, with the
modification of the deletion of the award for financial assistance to petitioners. The dispositive portion of the decision of
the NLRC reads:

WHEREFORE, the Decision of Labor Arbiter Luciano P. Aquino dated March 3, 1983 is hereby modified in that
the award of P10,000.00 financial assistance should be deleted. The said Decision is affirmed in all other aspects.

SO ORDERED.11

Petitioners filed a motion for reconsideration of the Decision of the Third Division of the NLRC dated 8 August 1984;
however, the NLRC denied tills motion in a resolution dated 17 August 1987.12

In the present Petition for certiorari, petitioners seek the reversal of the above-mentioned rulings. Petitioners contend that
respondent Labor Arbiter and respondent NLRC erred when both ruled that petitioners are not regular and permanent
employees of private respondents based on the terms and conditions of their hiring, for said findings are contrary to the
provisions of Article 280 of the Labor Code.13 They submit that petitioners' employment, even assuming said employment
were seasonal, continued for so many years such that, by express provision of Article 280 of the Labor Code as
amended, petitioners have become regular and permanent employees.14

Moreover, they argue that Policy Instruction No. 1215 of the Department of Labor and Employment clearly lends support to
this contention, when it states:

PD 830 has defined the concept of regular and casual employment. What determines regularity or casualness is
not the employment contract, written or otherwise, but the nature of the job. If the job is usually necessary or
desirable to the main business of the employer, then employment is regular. If not, then the employment is casual.
Employment for a definite period which exceeds one (1) year shall be considered re for the duration of the definite
period.

This concept of re and casual employment is designed to put an end to casual employment in regular jobs which
has been abused by many employers to prevent so-called casuals from enjoying the benefits of regular
employees or to prevent casuals from joining unions.

This new concept should be strictly enforced to give meaning to the constitutional guarantee of employment
tenure.16

Tested under the laws invoked, petitioners submit that it would be unjust, if not unlawful, to consider them as casual
workers since they have been doing all phases of agricultural work for so many years, activities which are undeniably
necessary, desirable and indispensable in the rice and sugar cane production business of the private respondents.17

In the Comment filed by private respondents, they submit that the decision of the Labor Arbiter, as aimed by respondent
NLRC, that petitioners were only hired as casuals, is based on solid evidence presented by the parties and also by the
Chief of the Special Task Force of the NLRC Regional Office and, therefore, in accordance with the rule on findings of fact
of administrative agencies, the decision should be given great weight.18 Furthermore, they contend that the arguments
used by petitioners in questioning the decision of the Labor Arbiter were based on matters which were not offered as
evidence in the case heard before the regional office of the then Ministry of Labor but rather in the case before the Social
Security Commission, also between the same parties.19
Public respondent NLRC filed a separate comment prepared by the Solicitor General. It submits that it has long been
settled that findings of fact of administrative agencies if supported by substantial evidence are entitled to great
weight.20 Moreover, it argues that petitioners cannot be deemed to be permanent and regular employees since they fall
under the exception stated in Article 280 of the Labor Code, which reads:

The provisions of written agreements to the contrary notwithstanding and regardless of the oral agreements of the
parties, an employment shall be deemed to be regular where the employee has been engaged to perform
activities which are usually necessary or desirable in the usual business or trade of the employer, except where
the employment has been fixed for a specific project or undertaking the completion or termination of which has
been determined at the time of the engagement of the employee or where the work or services to be performed is
seasonal in nature and the employment is for the duration of the season.21 (emphasis supplied)

The Court resolved to give due course to the petition and required the parties to submit their respective memoranda after
which the case was deemed submitted for decision.

The petition is not impressed with merit.

The invariable rule set by the Court in reviewing administrative decisions of the Executive Branch of the Government is
that the findings of fact made therein are respected, so long as they are supported by substantial evidence, even if not
overwhelming or preponderant;22 that it is not for the reviewing court to weigh the conflicting evidence, determine the
credibility of the witnesses or otherwise substitute its own judgment for that of the administrative agency on the sufficiency
of the evidence;23 that the administrative decision in matters within the executive's jurisdiction can only be set aside upon
proof of gross abuse of discretion, fraud, or error of law.24

The questioned decision of the Labor Arbiter reads:

Focusing the spotlight of judicious scrutiny on the evidence on record and the arguments of both parties, it is our
well-discerned opinion that the petitioners are not regular and permanent workers of the respondents. The very
nature of the terms and conditions of their hiring reveal that the petitioners were required to perform p of cultural
work for a definite period, after which their services are available to any farm owner. We cannot share the
arguments of the petitioners that they worked continuously the whole year round for twelve hours a day. This, we
feel, is an exaggeration which does not deserve any serious consideration inasmuch as the plan of rice and sugar
cane does not entail a whole year operation, the area in question being comparatively small. It is noteworthy that
the findings of the Chief of the Special Task Force of the Regional Office are similar to this.

In fact, the sworn statement of one of the petitioners Fortunato Mercado, Jr., the son of spouses Fortunato
Mercado, Sr. and Rosa Mercado, indubitably shows that said petitioners were only hired as casuals, on-and-off
basis. With this kind of relationship between the petitioners and the respondent Aurora Cruz, we feel that there is
no basis in law upon which the claims of the petitioners should be sustained, more specially their complaint for
illegal dismissal. It is within the prerogative of respondent Aurora Cruz either to take in the petitioners to do further
work or not after any single phase of agricultural work has been completed by them. We are of the opinion that
the real cause which triggered the filing of this complaint by the petitioners who are related to one another, either
by consanguinity or affinity was due to the filing of a criminal complaint by the respondent Aurora Cruz against
Reynaldo Mercado, son of spouses Fortunato Mercado, Sr. and Rosa Mercado. In April 1979, according to Jesus
David, Zone Chairman of the locality where the petitioners and respondent reside, petitioner Fortunato Mercado,
Sr. asked for help regarding the case of his son, Reynaldo, to talk with respondent Aurora Cruz and the said Zone
Chairman also stated under oath that the petitioners were never regularly employed by respondent Aurora Cruz
but were on-and-off hired to work to render services when needed.25

A careful examination of the foregoing statements reveals that the findings of the Labor Arbiter in the case are ably
supported by evidence. There is, therefore, no circumstance that would warrant a reversal of the questioned decision of
the Labor Arbiter as affirmed by the National Labor Relations Commission.

The contention of petitioners that the second paragraph of Article 280 of the Labor Code should have been applied in their
case presents an opportunity to clarify the afore-mentioned provision of law.

Article 280 of the Labor Code reads in full:

Article 280. Regular and Casual Employment. — The provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be
 regular where the employee has been engaged to perform activities which are usually necessary or desirable in
the usual business or trade of the employer, except where the employment has been fixed for a specific project or
undertaking the completion or termination of which has been determined at the time of the engagement of the
employee or where the work or services to be performed is seasonal in nature and the employment is for the
duration of the season.

An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That, any
employee who has rendered at least one year of service whether such service is continuous or broken, shall be
considered a regular employee with respect to the activity in which he is employed and his employment shall
continue while such actually exists.

The first paragraph answers the question of who are employees. It states that, regardless of any written or oral agreement
to the contrary, an employee is deemed regular where he is engaged in necessary or desirable activities in the usual
business or trade of the employer, except for project employees.

A project employee has been defined to be one whose employment has been fixed for a specific project or undertaking,
the completion or termination of which has been determined at the time of the engagement of the employee, or where the
work or service to be performed is seasonal in nature and the employment is for the duration of the season26 as in the
present case.

The second paragraph of Art. 280 demarcates as "casual" employees, all other employees who do not fan under the
definition of the preceding paragraph. The proviso, in said second paragraph, deems as regular employees those "casual"
employees who have rendered at least one year of service regardless of the fact that such service may be continuous or
broken.

Petitioners, in effect, contend that the proviso in the second paragraph of Art. 280 is applicable to their case and that the
Labor Arbiter should have considered them regular by virtue of said proviso. The contention is without merit.

The general rule is that the office of a proviso is to qualify or modify only the phrase immediately preceding it or restrain or
limit the generality of the clause that it immediately follows.27 Thus, it has been held that a proviso is to be construed with
reference to the immediately preceding part of the provision to which it is attached, and not to the statute itself or to other
sections thereof.28 The only exception to this rule is where the clear legislative intent is to restrain or qualify not only the
phrase immediately preceding it (the proviso) but also earlier provisions of the statute or even the statute itself as a
whole.29

Policy Instruction No. 12 of the Department of Labor and Employment discloses that the concept of regular and casual
employees was designed to put an end to casual employment in regular jobs, which has been abused by many employers
to prevent called casuals from enjoying the benefits of regular employees or to prevent casuals from joining unions. The
same instructions show that the proviso in the second paragraph of Art. 280 was not designed to stifle small-scale
businesses nor to oppress agricultural land owners to further the interests of laborers, whether agricultural or industrial.
What it seeks to eliminate are abuses of employers against their employees and not, as petitioners would have us believe,
to prevent small-scale businesses from engaging in legitimate methods to realize profit. Hence, the proviso is applicable
only to the employees who are deemed "casuals" but not to the "project" employees nor the regular employees treated in
paragraph one of Art. 280.

Clearly, therefore, petitioners being project employees, or, to use the correct term, seasonal employees, their employment
legally ends upon completion of the project or the season. The termination of their employment cannot and should not
constitute an illegal dismissal.30

WHEREFORE, the petition is DISMISSED. The decision of the National Labor Relations Commission affirming that of the
Labor Arbiter, under review, is AFFIRMED. No pronouncement as to costs.

SO ORDERED.

G.R. No. 118475               November 29, 2000

ELVIRA ABASOLO, ANTONIO ABAY, PURIFICACION ABAY, CATALINA ABELLERA, DANIEL ABELLERA, ELSIE
ABELLERA, LOURDES ADUSE, PACITA ALAMAN, REYNALDO ALBAY, ROGELIO ALBAY, EMERITA ALCOY,
ERLINDA ALEGRE, CORAZON ALOOT, IMELDA ALOOT, ROWENA ALOOT, SHIRLEY JULIANA ALOOT,
ADORACION ANTALAN, ESTRELLA ANTOLIN, EPIFANIA ANTONIO, CARMELITA AQUINO, CECENIA ASPIRAS,
EMILIANA ASPIRAS, ANA BELEN ASPREC, MELENCIO ASPURIA, ILUMINADA ASTRO, CARMELITA ASUNCION,
FLORENTINA AVENA, EMILIA BACQUIL, GLORIA BAGALAN, BENJAMIN BALANAG, CLARITA BALANAG,
CONSUELO BALANAG, DOLORES BALANAG, CANDIDA BALANGA, CLARITA BALANGA, FRANCISCA
BALANGA, CORAZON BALANGUE, MILDRED BALANGUE, ERLINDA BALDERAS, MANUEL BALLESIL, ERLINDA
BAMBAO, ROSEMARIE BASIO, AMALIA BATARIO, CONCHITA BATARIO, CORAZON BATARIO, ERLINDA
BATARIO, GLORIA BATARIO, PEDRO BATARIO, JR., REBECCA BATARIO, PERLA BAUTISTA, SHIRLEY
BAUTISTA, ANGELISA BAYANI, MORGAN BEGALAN, FRANCISCA BERBON, BERNARD VISITACION, EVELYN
BIASON, VERONICA BLANDO, UFENIA BLANZA, AMBROSIA BOADO, CARLOS BOADO, LOLITA BORJE,
MARILOU BUNGAY, RODRIGO BURGOS, AMELITA CABALBAG, ERNESTO CABALBAG, ELVIRA CABUGON,
JOSEFINA CACANINDIN, CORAZON CACAYARA, JAIME CACHERO, JULIET CALLANO, ANDRES CALUZA,
TERESITA CALUZA, ISABEL COMADRO, EDITA CARBONEL, LOLITA CARILLA, BIENVENIDA CARINO, DELIA
CARINO, LOLITA CARINO, AMARIO CARREON, ARMELINDA CARREON, ERLINDA CARREON, FECIDAD
CARREON, JOSE CARREON, MA. VICTORIA CARREON, BENJAMIN CASALLO, DEMETRIA CASEM, ALBERTO
CASIM, GLORIA CASIM, FLORIDA CATUNGAL, ESTER CAVINTA, REMEDIOS CAVINTA, ROSALINDA CAVINTA,
JULITA CAYABYAB, IRENE CELESTE CARMELITA CHAN, ESMENIA CORDERO, LYDIA CORPUZ, JOVA CORTEZ,
NORA CORTEZ, MAGDALENA CUDAL, GENOVA DACANAY, SABINA BACLAN, CORAZON DANAO, ELISA
DASALLA, AGNES BIBIANA DE CASTRO, ANITA DE CASTRO, EDITHA DE CASTRO, NIDA DE CASTRO,
CORAZON DE JESUS, JOSE DE JESUS, MERLA DE JESUS, MILAGROS DE VERA, APOLINARIO DOLATRE,
CAMILO DOLOR, JR., LOLITA DOLOR, WILMA DOMINGO, OLYMPIA DOMONOON, BASILIO DULATRE, BASILIO
DULATRE, IMELDA DULATRE, LETICIA DULATRE, MARTINA DULATRE, RODRIGO DULATRE, JR., ROGELIO
DULATRE, TRIFONA DULATRE, CONSOLACION DULAY, CRESILDA DULAY, DANILO DULAY, EDITHA DULAY,
ELENA G. DULAY, ERLINDA DULAY, ESTRELLA DULAY, ESTELITA DULAY, ESTRELITA P. DULAY, EVANGELINE
DULAY, FELICIDAD DULAY, FELISA DULAY, GINA DULAY, GINA DULAY, GLORIA DULAY, GUILLERMO DULAY,
JAIME DULAY, LETICIA DULAY, LOLITA DULAY, LUIS DULAY, MARIA G. DULAY, MILAGROS DULAY, REMEDIOS
DULAY, ROBERTO DULAY, SOTERO DULAY, TERESITA DULAY, TERESITA G. DULAY, TERESITA M. DULAY,
THERESITA DULAY, VALENTIN DULAY, EDITHA DUMO, REMEDIOS DY, RIA MAPILI, VICTORIO MAPILI,
ROBERTO MARAMBA, SUSANA MARAMBA, ANDRES MARCOS, LANIA MARCOS, AURORA MARGASA,
ARSENIA MARIGZA, LOLITA MARQUEZ, ANA MARIA MARZAN, ANGELITA MEDINA, ADELINA MEDRIANO,
ELIZABETH MEDRIANO, HERMINIA M. MEDRIANO, ROSALINDA MEDRIANO, CLEOFE MELANA, LOLITA
MELENDEZ, LOURDES MIGUEL, EMILIA G. MILANES, JOSE MILANES, LILIA MILO, LILIAN MILO, FELICIDA
MORION, EVELYN MOSTER, ADORACION MUNAR, ELEONORA MUNAR, IMELDRA NAVARRO, TERESITA
NAVERIDA, ANITA NINOBLA, AURELIA NINOBLA, CARMELITA NINOBLA, MARCELA NINOBLA, MYRNA
NISPERO, JOSEFINA NUTO, LANY OBSRA, ELENA OCAMPO, SYLVIA OLINARES, ROSITA OPENIANO, TRINIDAD
ORDUNA, ROSALINDA ORDONEZ, JESSIE ORIBELLO, REMEDIOS ORIBELLO, TERESITA ORIBELLO, HILARIO
ORACION, AVELINA ORTILLA, MAGDALENA ORTILLA, MARIETTA ORTILLA, LEONORA PADER, AMALIA
PADILLA, ARCELITA PADILLA, EVELYN PADILLA, FELICIDA ORTILLA, JOSELYN PADILLA, JOSEPHINE
PADILLA, VIRGINIA PADILLA, CLARITA PAIS, EDUARDO PANIS, JESUS PANIS, JOSE PANIS, TEOFILA PANIS,
VIOLETA PARADO, ROSITA PAROCHA, CARMELITA PASCUA, LUCIA PAYUMO, MARIA PICAR, REYNALDA
PILARCA, LUZVIMINDA QUERO, ALEJANDRA QUEZADA, TEODORO QUEZADA, ARLENE QUIBAN, AIDA
QUINDARA, JUANITA QUINONES, GLORIA RABOT, EFREN RACELIS, ERLINDA RACELIS, IMELDA RACELIS,
REMEDIOS RACELIS, SUSANA RACELIS, TERESITA RACELIS, FLORITA RAQUEL, ALMA RAMIREZ, CARMEN
RAMIREZ, ROSEMARIE RAMIREZ, GEMMA RAMOS, JUANITA RAMOS, IMELITA REYES, VICTORIA A. RIVERA,
VIRGINIA RIVERA, LYDIA ROBLES, EMILIA RONQUILLO, ROSALLA ROSETE, FORTUNATO RUIZ, GLORIA RUIZ,
RICARDO RUIZ, ROSALINDA RUIZ, ROLIE RUIZ, DANILO RULLA, EDITHA RULLA, MARITES RULLA, ANTONIO
RULLAMOS, BERNADETEE RULLAMAS, JULITA R. RULLAMAS, SOLEDAD RULLAMAS, CELILIA RULLAN,
NAPOLEON RULLAN, NORA RULLAN, WARLITO RULLAN, AURORA RULLODA, GLORIA RULLODA, REMEDIOS
RULLODA, LETICIA RUMATAY, FELY RUNAS, RIZALITO RUNAS, DOMINGA SABADO, JOSE SACDAL, CLARITA
SALAZAR, GLORIA SALTING, PURITA SAMSON, ESTRELLITA SERRANO, GEMMA SIABABA, SUSANA SIABANA,
PERLITA SOBREMONTE, CARMEN SOBREVILLA, RUBIE SOLOMON, MONICA SORIANO, ERLINDA SUGUITAN,
JULITA SUCNET, FEDEL TACIO, LETICIA TAGARA, JOSEFINA TALENG, MARILY TAMONDON, NIEVEZ
TAMONDON, GLORI TANGALIN, LEONARDO TANGALIN, MYRNA TANGALIN, NOEMA TANGALIN, NORMA
TANGALIN, CRISTETA TEANAN, RUFINA TRANCIA, ALMA TRINIDAD, GLORIA TUGADE, TERESITA TUMBAGA,
ALICIA UBONGEN, ZENAIDA UCOL, ADELA UGAY, AMAILIA UGAY, ESTELLA UGAY, HONORATO UGAY,
JULIETA UGAY, LOURDES UGAY, PURIFICACION UGAY, ROSEMARIE UGAY, RUFINA UGAY, ANGELITO UMEL,
JOSEFINA VALDEZ, ALFREDO VERCELES, JOSIE VERCELES, HELEN VILLANUEVA, SALVACION VILLAROSA,
DOMINGO YARANON, FELIMON YARANON, FELIX YARANON, MONICA YARES, CONSOLACION YARIZ,
DEMETRIA YARIZ, IMELDA YARIZ, MARGARITA ZARATE, ESMERALDA ABAD, LOURDES ABELLERA,
MILAGROS ADUBE, JOSEPHINE ARIAS, ERLINDA ASPERIN, EMELDA ASUNCION, LILIA ASUNCION, VIOLETA
ASUNCION, ROSA BALAGOT, ADORACION BALANAG, ALICA J. BALANAG, GLECERIA BALANGA, CORAZON
BAMBICO, RICARDO BAIARIO, ADELA BAUTISTA, CORAZON BRAVO, DINAH BULATAO, MARILOU BUNGAY,
LORETO BURGOS, EVELYN CABUNIAS, CARLITO CACAYURAN, ISABEL CAMACHO, LUCRECIA CARREON,
ALFREDO CASEM, HERA CASEM, MELY CASEM, NATIVIDAD CASIPIT, MARILYN CASTILLO, NENITA
CASTANEDA, CARMELITA CAVINTA, LEONIDA CAVINTA, LEONILA CAVINTA, MELANIE CHAVEZ, LORETO
CORTEZ, HERMANA DACANAY, MARIETTA DACANAY, MARITES G. DACANAY, MARIO DALAZA, AIDA DANAO,
EVA DANAO, MARGIE DE GUZMAN, NATIVIDAD DE CASTRO, NATIVIDAD DELA CRUZ, LORETA DIFUNTORUM,
LOLITA DISTOR, ADELINA DOMONDON, HELEN DULATRE, IMELDA M. DULATRE, JOSE N. DULATRE, LYDIA A.
DULATRE, MERLY DULATRE, CONCEPCION DULAY, DOMINGA DULAY, ELENA C. DULAY, ERLINDA DULAY,
ORPILINA R. DULAY, PABLO A. DULAY, RENATO DULAY, NORMA EISMA, EDNA ESTOQUE, TEOFILO FAJARDO,
ADELINA FONTANILLA, TERESITA FORONDA, MARGARITA FREDELUCES, RUFINA GALESTE, MARISSA GALI,
LUZVIMINDA GAMBOA, CLEOFE GARCIA, ERLINDA GAPASIN, JULITA GATCHALIAN, MARISSA GATCHALIAN,
ALFONSO HALOG, TERESITA IBASAN, RICARDO JUGO, ELMA JULOYA, ELENITA LACUATA, EPIFANIA
LACUATA, SEBASTIAN LACUATA, JOSEFINA LARON, PEDRO LEGASPI, DOLORES LUCENA, FLORDELIZA
MABANTA, PERLITA MACAGBA, CESAR MAGLAYA, ERNA MAGNO, GLORIA MAGNO, BONA P. MAMARIL,
CONCEPCION MAMARIL, MARCELINA MAMARIL, TERESITA MAMARIL, ESTINILIE MANGADANG, HERMOGENES
MANGADANG, LETICIA MANGADANG, LYDIA MANGADANG, SHIRLEY MANGADANG, SONIA MANGADANG,
TRINIDAD MANGADANG, VICTORIANO MANGADANG, CRESTITA D. MANZANO, ERLINDA MAPALO, FABIAN F.
MAPANAO, LYDIA MAPILE, RUMO MASON, SUSANA MEDRIANO, DOLORES MILAN, ANTONIO G. MUNAR,
MARINA NINIALBA, CORAZON B. NINOBLE, SUSAN ORIBELLO, JOVENCIO ORLINO, CHARITO ORPILLA,
FERDINAND PADILLA, LETECIA PAGADUAN, BERLINA PALMONES, ARISTON PANIS, PATRICIO PANIS, PRIMO
PANIS, REMEDIOS B. PANIS, EMELITO PERALTA, GLORIA RAMIREZ, DOMINGA RAMOS, GERTRUDES RAMOS,
DOROTEO REFUERZO, JR., JUANITA REFUERZO, FLORENCIO REGACHO, MAGDALENA REBACHO, ADELINA
REYES, DELIA REYES, EUFENIA RIVERA, LEONORA RIVERA, ROSEMARIE ROSIMO, VICTORIA RUALO, DANILO
RULLAN, AURORA RULLODA, SERAFICA RULLODA, ZENAIDO P. RULLODA, IMELDA RUNAS, REMEDIOS
SANTOS, DOMINADOR TABABA, ROSENDA TABAO, JOSEFINA TALENS, REVELINA TORCEDO, RUFINA
TUMBANGA, JULITA F. UGAY, BRENDA VILLANUEVA, GLORIA VILORIA, FLORIDA YARIS, MARGARITA
ZARATE, FERNANDO SACDAL, ANICETA MANONGDO and BEATRIZ UGAY, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER RICARDO N. OLAIREZ, LA UNION TOBACCO
REDRYING CORPORATION and SEE LIN CHAN, respondents.

DECISION

DE LEON, JR., J.:

Before us is a petition for certiorari seeking to annul two Resolutions of the National Labor Relations Commission (NLRC),
Third Division, dated July 6, 19941 and September 23, 19942 , in its affirmance of the Decision3 of Labor Arbiter Ricardo N.
Olairez dated December 29, 1993 dismissing petitioners’ consolidated complaint for separation pay for lack of merit.

The facts are as follows:

Private respondent La Union Tobacco Redrying Corporation (LUTORCO), which is owned by private respondent See Lin
Chan, is engaged in the business of buying, selling, redrying and processing of tobacco leaves and its by-products.
Tobacco season starts sometime in October of every year when tobacco farmers germinate their seeds in plots until they
are ready for replanting in November. The harvest season starts in mid-February. Then, the farmers sell the harvested
tobacco leaves to redrying plants or do the redrying themselves. The redrying plant of LUTORCO receives tobacco for
redrying at the end of February and starts redrying in March until August or September.

Petitioners have been under the employ of LUTORCO for several years until their employment with LUTORCO was
abruptly interrupted sometime in March 1993 when Compania General de Tabaccos de Filipinas (also known as
TABACALERA) took over LUTORCO’s tobacco operations. New signboards were posted indicating a change of
ownership and petitioners were then asked by LUTORCO to file their respective applications for employment with
TABACALERA. Petitioners were caught unaware of the sudden change of ownership and its effect on the status of their
employment, though it was alleged that TABACALERA would assume and respect the seniority rights of the petitioners.

On March 17, 1993, the disgruntled employees instituted before the NLRC Regional Arbitration Branch No. 1, San
Fernando, La Union a complaint4 for separation pay against private respondent LUTORCO on the ground that there was a
termination of their employment due to the closure of LUTORCO as a result of the sale and turnover to TABACALERA.
Other equally affected employees filed two additional complaints5 , also for separation pay, which were consolidated with
the first complaint.
Private respondent corporation raised as its defense that it is exempt from paying separation pay and denied that it
terminated the services of the petitioners; and that it stopped its operations due to the absence of capital and operating
funds caused by losses incurred from 1990 to 1992 and absence of operating funds for 1993, coupled with adverse
financial conditions and downfall of prices.6 It alleged further that LUTORCO entered into an agreement with
TABACALERA to take over LUTORCO’s tobacco operations for the year 1993 in the hope of recovering from its serious
business losses in the succeeding tobacco seasons and to create a continuing source of income for the
petitioners.7 Lastly, it manifested that LUTORCO, in good faith and with sincerity, is willing to grant reasonable and
adjusted amounts to the petitioners, as financial assistance, if and when LUTORCO could recover from its financial crisis.8

On December 29, 1993, Labor Arbiter Ricardo N. Olairez rendered his decision dismissing the complaint for lack of merit.
In upholding private respondent LUTORCO’s position, the Labor Arbiter declared that the petitioners are not entitled to the
benefits under Article 2839 of the Labor Code since LUTORCO ceased to operate due to serious business losses and,
furthermore, TABACALERA, the new employer of the petitioner has assumed the seniority rights of the petitioners and
other employment liabilities of the LUTORCO.10

Petitioners appealed11 then the decision of the Labor Arbiter to the public respondent NLRC where it was assigned to the
Third Division.

In its Opposition to Appeal12 dated February 5, 1994 private respondent LUTORCO presented new allegations and a
different stand for denying separation pay. It alleged that LUTORCO never ceased to operate but continues to operate
even after TABACALERA took over the operations of its redrying plaint in Aringay, La Union. Petitioners were not
terminated from employment but petitioners instead refused to work with TABACALERA, despite the notice to petitioners
to return to work in view of LUTORCO’s need for workers at its Agoo plant which had approximately 300,000 kilos of
Virginia tobacco for processing and redrying. Furthermore, petitioners are not entitled to separation pay because
petitioners are seasonal workers.

Adopting these arguments of private respondent, the NLRC, in a Resolution13 dated July 6, 1994, affirmed the dismissal of
the consolidated complaints for separation pay. Public respondent held that petitioners are not entitled to the protection of
Article 283 of the Labor Code providing for separation pay since there was no closure of establishment or termination of
services to speak of. It declared that there was no dismissal but a "non-hiring due mainly to [petitioners] own
volition."14 Moreover, the benefits of Article 283 of the Labor Code apply only to regular employees, not seasonal workers
like petitioners.15 Inasmuch as public respondent in its Resolution16 dated September 23, 1994 denied petitioners’ motion
for reconsideration, petitioners now assail the correctness of the NLRC’s resolution via the instant petition.

Petitioners anchor their petition on the following grounds, to wit:

I. PUBLIC RESPONDENT NLRC COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO EXCESS

OR LACK OF JURISDICTION IN RULING THAT THERE WAS NO DISMISSAL OR TERMINATION OF
SERVICES.

II. PUBLIC RESPONDENT NLRC COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO EXCESS
OR LACK OF JURISDICTION IN RULING THAT PETITIONERS WERE NOT REGULAR EMPLOYEES.

III. PUBLIC RESPONDENT NLRC COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO EXCESS
OR LACK OF JURISDICTION IN NOT AWARDING SEPARATION PAY TO THE PETITIONERS.

Petitioners vigorously maintain that they are regular workers of respondent LUTORCO since they worked continuously for
many years with LUTORCO, some of them even for over 20 years, and that they performed functions necessary and
desirable in the usual business of LUTORCO.17 According to them, the fact that some of them work only during the
tobacco season does not affect their status as regular workers since they have been repeatedly called back to work for
every season, year after year.18 Thus, petitioners take exception to the factual findings and conclusions of the NLRC,
stressing that the conclusions of the NLRC were based solely on the new theory advanced by private respondent
LUTORCO only on appeal, that is, that it was only LUTORCO’s tobacco re-drying operation that was sold, and hence,
diametrically opposed to its theory before the Labor Arbiter, i.e., that it is the entire company (LUTORCO) itself that was
sold.

Private respondent LUTORCO, on the other hand, insists that petitioners’ employment was not terminated; that it never
ceased to operate, and that it was petitioners themselves who severed their employer-employee relationship when they
chose employment with TABACALERA because petitioners found more stability working with TABACALERA than with
LUTORCO.19 It likewise insists that petitioners are seasonal workers since almost all of petitioners never continuously
worked in LUTORCO for any given year20 and they were required to reapply every year to determine who among them
shall be given work for the season. To support its argument that petitioners are seasonal workers, private respondent
LUTORCO cites the case of Mercado, Sr. v. NLRC21 wherein this Court held that "the employment of [seasonal workers]
legally ends upon the completion of the xxx season."

Clearly, the crux of the dispute boils down to two issues, namely, (a) whether petitioners’ employment with LUTORCO
was terminated, and (b) whether petitioners are regular or seasonal workers, as defined by law. Both issues are clearly
factual in nature as they involved appreciation of evidence presented before the NLRC whose finding of facts and
conclusions thereon are entitled to respect and finality in the absence of proof that they were arrived at arbitrarily or
capriciously.22 In the instant case, however, cogent reasons exist to apply the exception, to wit:

First, upon a thorough review, the records speak of a sale to TABACALERA in 1993 under conditions evidently so
concealed that petitioners were not formally notified of the impending sale of LUTORCO’s tobacco re-drying operations to
TABACALERA and its attendant consequences with respect to their continued employment status under TABACALERA.
They came to know of the fact of that sale only when TABACALERA took over the said tobacco re-drying operations.
Thus, under those circumstances, the employment of petitioners with respondent LUTORCO was technically terminated
when TABACALERA took over LUTORCO’s tobacco re-drying operations in 1993.23

Moreover, private respondent LUTORCO’s allegation that TABACALERA assured the seniority rights of petitioners
deserves scant consideration inasmuch as the same is not supported by documentary evidence nor was it confirmed by
TABACALERA. Besides, there is no law requiring that the purchaser of an entire company should absorb the employees
of the selling company. The most that the purchasing company can do, for reasons of public policy and social justice, is to
give preference to the qualified separated employees of the selling company, who in its judgment are necessary in the
continued operation of the business establishment. In the instant case, the petitioner employees were clearly required to
file new applications for employment. In reality then, they were hired as new employees of TABACALERA.

Second, private respondent LUTORCO’s contention that petitioners themselves severed the employer-employee
relationship by choosing to work with TABACALERA is bereft of merit considering that its offer to return to work was made
more as an afterthought when private respondent LUTORCO later realized it still had tobacco leaves for processing and
redrying. The fact that petitioners ultimately chose to work with TABACALERA is not adverse to petitioners’ cause. To
equate the more stable work with TABACALERA and the temporary work with LUTORCO is illogical. Petitioners’ untimely
separation in LUTORCO was not of their own making and therefore, not construable as resignation therefrom inasmuch
as resignation must be voluntary and made with the intention of relinquishing the office, accompanied with an act of
relinquishment.24

Third, the test of whether or not an employee is a regular employee has been laid down in De Leon v. NLRC,25 in which
this Court held:

The primary standard, therefore, of determining regular employment is the reasonable connection between the particular
activity performed by the employee in relation to the usual trade or business of the employer. The test is whether the
former is usually necessary or desirable in the usual business or trade of the employer. The connection can be
determined by considering the nature of the work performed and its relation to the scheme of the particular business or
trade in its entirety. Also if the employee has been performing the job for at least a year, even if the performance is not
continuous and merely intermittent, the law deems repeated and continuing need for its performance as sufficient
evidence of the necessity if not indispensability of that activity to the business. Hence, the employment is considered
regular, but only with respect to such activity, and while such activity exists.

Thus, the nature of one’s employment does not depend solely on the will or word of the employer.1âwphi1 Nor on the
procedure for hiring and the manner of designating the employee, but on the nature of the activities to be performed by
the employee, considering the employer’s nature of business and the duration and scope of work to be done.26

In the case at bar, while it may appear that the work of petitioners is seasonal, inasmuch as petitioners have served the
company for many years, some for over 20 years, performing services necessary and indispensable to LUTORCO’s
business, serve as badges of regular employment.27 Moreover, the fact that petitioners do not work continuously for one
whole year but only for the duration of the tobacco season does not detract from considering them in regular employment
since in a litany of cases28 this Court has already settled that seasonal workers who are called to work from time to time
and are temporarily laid off during off-season are not separated from service in said period, but are merely considered on
leave until re-employed.
Private respondent’s reliance on the case of Mercardo v. NLRC is misplaced considering that since in said case
of Mercado, although the respondent company therein consistently availed of the services of the petitioners therein from
year to year, it was clear that petitioners therein were not in respondent company’s regular employ. Petitioners therein
performed different phases of agricultural work in a given year. However, during that period, they were free to contract
their services to work for other farm owners, as in fact they did. Thus, the Court ruled in that case that their employment
would naturally end upon the completion of each project or phase of farm work for which they have been contracted.

All the foregoing considered, the public respondent NLRC in the case at bar erred in its total affirmance of the dismissal of
the consolidated complaint, for separation pay, against private respondents LUTORCO and See Lin Chan considering
that petitioners are regular seasonal employees entitled to the benefits of Article 283 of the Labor Code which applies to
closures or cessation of an establishment or undertaking, whether it be a complete or partial cessation or closure of
business operation.29

In the case of Philippine Tobacco Flue-Curing & Redrying Corporation v. NLRC30 this Court, when faced with the question
of whether the separation pay of a seasonal worker, who works for only a fraction of a year, should be equated with the
separation pay of a regular worker, resolved that question in this wise:

The amount of separation pay is based on two factors: the amount of monthly salary and the number of years of service.
Although the Labor Code provides different definitions as to what constitutes "one year of service," Book Six31 does not
specifically define "one year of service" for purposes of computing separation pay. However, Articles 283 and 284 both
state in connection with separation pay that a fraction of at least six months shall be considered one whole year. Applying
this case at bar, we hold that the amount of separation pay which respondent members xxx should receive is one-half
(1/2) their respective average monthly pay during the last season they worked multiplied by the number of years they
actually rendered service, provided that they worked for at least six months during a given year.

Thus, in the said case, the employees were awarded separation pay equivalent to one (1) month, or to one-half (1/2)
month pay for every year they rendered service, whichever is higher, provided they rendered service for at least six (6)
months in a given year. As explained in the text of the decision in the said case, "month pay" shall be understood as
"average monthly pay during the last season they worked."32 An award of ten percent (10%) of the total amount due
petitioners as attorney’s fees is legally and morally justifiable under Art. 111 of the Labor Code,33 Sec. 8, Rule VIII, Book III
of its Implementing Rules,34 and par. 7, Art. 220835 of the Civil Code.36

WHEREFORE, the petition is hereby GRANTED, and the assailed Resolutions dated July 6, 1994 and September 23,
1994 of public respondent NLRC are REVERSED and SET ASIDE. Private respondent La Union Tobacco Redrying
Corporation is ORDERED: (a) to pay petitioners separation pay equivalent to one (1) month, or one-half (1/2) month pay
for each year that they rendered service, whichever is higher, provided that they rendered service for at least six (6)
months in a given year, and; (b) to pay ten percent (10%) of the total amount due to petitioners, as and for attorney’s fees.
Consequently, public respondent NLRC is ORDERED to COMPUTE the total amount of separation pay which each
petitioner who has rendered service to private respondent LUTORCO for at least six (6) months in a given year is entitled
to receive in accordance with this decision, and to submit its compliance thereon within forty-five (45) days from notice of
this decision.

SO ORDERED.

[G.R. NO. 150478. April 15, 2005]

HACIENDA BINO/HORTENCIA STARKE, INC./HORTENCIA L. STARKE, Petitioners, v. CANDIDO CUENCA,

FRANCISCO ACULIT, ANGELINA ALMONIA, DONALD ALPUERTO, NIDA BANGALISAN, ROGELIO CHAVEZ,
ELMO DULINGGIS, MERCEDES EMPERADO, TORIBIO EMPERADO, JULIANA ENCARNADO, REYNALDO
ENCARNADO, GENE FERNANDO, JOVEN FERNANDO, HERNANI FERNANDO, TERESITA FERNANDO,
BONIFACIO GADON, JOSE GALLADA, RAMONITO KILAYKO, ROLANDO KILAYKO, ALFREDO LASTIMOSO,
ANTONIO LOMBO, ELIAS LOMBO, EMMA LOMBO, LAURENCIA LOMBO, LUCIA LOMBO, JOEL MALACAPAY,
ADELA MOJELLO, ERNESTO MOJELLO, FRUCTOSO MOJELLO, JESSICA MOJELLO, JOSE MOJELLO,
MARITESS MOJELLO, MERLITA MOJELLO, ROMEO MOJELLO, RONALDO MOJELLO, VALERIANA MOJELLO,
JAIME NEMENZO, RODOLFO NAPABLE, SEGUNDIA OCDEN, JARDIOLINA PABALINAS, LAURO PABALINAS,
NOLI PABALINAS, RUBEN PABALINAS, ZALDY PABALINAS, ALFREDO PANOLINO, JOAQUIN PEDUHAN, JOHN
PEDUHAN, REYNALDO PEDUHAN, ROGELIO PEDUHAN, JOSEPHINE PEDUHAN, ANTONIO PORRAS, JR.,
LORNA PORRAS, JIMMY REYES, ALICIA ROBERTO, MARCOS ROBERTO, JR., MARIA SANGGA, RODRIGO
SANGGA, ARGENE SERON, SAMUEL SERON, SR., ANGELINO SENELONG, ARMANDO SENELONG, DIOLITO
SENELONG, REYNALDO SENELONG, VICENTE SENELONG, FEDERICO STA. ANA, ROGELIO SUASIM, EDNA
TADLAS, ARTURO TITONG, JR., JOSE TITONG, JR., NANCY VINGNO, ALMA YANSON, JIMMY YANSON, MYRNA
VILLANUEVA BELENARIO, SALVADOR MALACAPAY, and RAMELO TIONGCO, Respondents.

DECISION

CALLEJO, SR., J.:

Before us is a Petition for Review of the Decision1 of the Court of Appeals (CA), dated July 31, 2001, and the Resolution
dated September 24, 2001 denying the petitioners' motion for reconsideration. The assailed decision modified the
decision of the National Labor Relations Commission (NLRC) in NLRC Case No. V-000099-98.

Hacienda Bino is a 236-hectare sugar plantation located at Barangay Orong, Kabankalan City, Negros Occidental, and
represented in this case by Hortencia L. Starke, owner and operator of the said hacienda.

The 76 individual respondents were part of the workforce of Hacienda Bino consisting of 220 workers, performing various
works, such as cultivation, planting of cane points, fertilization, watering, weeding, harvesting, and loading of harvested
sugarcanes to cargo trucks.2

On July 18, 1996, during the off-milling season, petitioner Starke issued an Order or Notice which stated, thus:

To all Hacienda Employees:

Please bear in mind that all those who signed in favor of CARP are expressing their desire to get out of employment on
their own volition.

Wherefore, beginning today, July 18, only those who did not sign for CARP will be given employment by Hda. Bino.

(Sgd.) Hortencia Starke3

The respondents regarded such notice as a termination of their employment. As a consequence, they filed a complaint for
illegal dismissal, wage differentials, 13th month pay, holiday pay and premium pay for holiday, service incentive leave
pay, and moral and exemplary damages with the NLRC, Regional Arbitration Branch No. VI, Bacolod City, on September
17, 1996.4

In their Joint Sworn Statement, the respondents as complainants alleged inter alia that they are regular and permanent
workers of the hacienda and that they were dismissed without just and lawful cause. They further alleged that they were
dismissed because they applied as beneficiaries under the Comprehensive Agrarian Reform Program (CARP) over the
land owned by petitioner Starke.5

For her part, petitioner Starke recounted that the company's Board of Directors petitioned the Sangguniang Bayan of
Kabankalan for authority to re-classify, from agricultural to industrial, commercial and residential, the whole of Hacienda
Bino, except the portion earmarked for the CARP. She asserted that half of the workers supported the re-classification but
the others, which included the herein respondents, opted to become beneficiaries of the land under the CARP. Petitioner
Starke alleged that in July 1996, there was little work in the plantation as it was off-season; and so, on account of the
seasonal nature of the work, she issued the order giving preference to those who supported the re-classification. She
pointed out that when the milling season began in October 1996, the work was plentiful again and she issued notices to all
workers, including the respondents, informing them of the availability of work. However, the respondents refused to report
back to work. With respect to the respondents' money claims, petitioner Starke submitted payrolls evidencing payment
thereof.

On October 6, 1997, Labor Arbiter Ray Allan T. Drilon rendered a Decision,6 finding that petitioner Starke's notice dated
July 18, 1996 was tantamount to a termination of the respondents' services, and holding that the petitioner company was
guilty of illegal dismissal. The dispositive portion of the decision reads:

WHEREFORE, premises considered, judgment is hereby rendered declaring the dismissal of the complainants illegal and
ordering respondent Hortencia L. Starke, Inc. represented by Hortencia L. Starke, as President, to:

1. Reinstate the complainants to their former position without loss of seniority rights immediately upon receipt of this
decision;

2. PAY the backwages and wage differentials of the complainants, to wit:

in the total amount of Four Hundred Ninety-Five Thousand Eight Hundred Fifty-Two and 72/100 (P495,852.72) Pesos;
andcralawlibrary

3. TO PAY the complainants attorney's fee in the amount of Forty-Nine Thousand Five Hundred Eighty-Five and 27/100
(P49,585.27) Pesos.

Respondents are further directed to deposit to this Office the total judgment award of FIVE HUNDRED FORTY-FIVE
THOUSAND AND FOUR HUNDRED THIRTY-SEVEN AND 99/100 (P545,437.99) PESOS within ten (10) days from
receipt of this decision.

All other claims are hereby DISMISSED for lack of merit.

SO ORDERED.7

Both the petitioners and the respondents appealed the case to the NLRC. On July 24, 1998, the NLRC affirmed with
modification the decision of the Labor Arbiter. The dispositive part of its decision reads:

WHEREFORE, premises considered, the Decision of the Labor Arbiter is AFFIRMED WITH MODIFICATIONS.
Respondent is further ordered to pay the complainants listed in the Holiday Pay Payroll the amounts due them.

SO ORDERED.8

A motion for reconsideration of the said decision was denied by the NLRC.9 Dissatisfied, the respondents appealed the
case to the CA where the following issues were raised:

A. THE HONORABLE COMMISSION GRAVELY ABUSED ITS DISCRETION AND POWER BY VIOLATING THE
DOCTRINE OF "STARE DECISIS" LAID DOWN BY THE SUPREME COURT AND THE APPLICABLE LAWS AS TO
THE STATUS OF THE SUGAR WORKERS.

B. THE HONORABLE COMMISSION COMMITTED SERIOUS ERRORS BY ADMITTING THE MOTION TO DISMISS
AND/OR ANSWER TO PETITIONERS' APPEAL MEMORANDUM DATED MARCH 26, 1998 FILED BY COUNSEL FOR
THE HEREIN RESPONDENTS INSPITE OF THE FACT THAT IT WAS FILED WAY BEYOND THE REGLEMENTARY
PERIOD.

C. THE HONORABLE COMMISSION COMMITTED GRAVE ERROR IN GIVING CREDENCE TO THE SWEEPING
ALLEGATIONS OF THE COMPLAINANTS AS TO THE AWARD OF BACKWAGES AND HOLIDAY PAY WITHOUT ANY
BASIS.10

On July 31, 2001, the CA rendered a Decision,11 the dispositive portion of which reads:

WHEREFORE, the decision of the National Labor Relations Commission is hereby MODIFIED by deleting the award for
holiday pay and premium pay for holidays. The rest of the Decision is hereby AFFIRMED.

SO ORDERED.12

The CA ruled that the concept of stare decisis is not relevant to the present case. It held that the ruling in Mercado, Sr. v.
NLRC13 does not operate to abandon the settled doctrine that sugar workers are considered regular and permanent farm
workers of a sugar plantation owner, considering that there are facts peculiar in that case which are not present in the
case at bar. In the Mercado case, the farm laborers worked only for a definite period for a farm owner since the area of
the land was comparatively small, after which they offer their services to other farm owners. In this case, the area of
the hacienda, which is 236 hectares, simply does not allow for the respondents to work for a definite period only.

The CA also held that the petitioners' reliance on Bacolod-Murcia Milling Co. Inc. v. NLRC14 was misplaced, as it in fact,
bolstered the respondents' posture that they are regular employees. In that case, the Court held that a sugar worker may
be considered as in regular employment even during those years when he is merely a seasonal worker where the issues
concern the determination of an employer-employee relationship and security of tenure.

Further, the CA held that the respondents' appeal to the NLRC was not perfected since they failed to accompany their
notice of appeal with a memorandum of appeal, or to timely file a memorandum of appeal. Thus, as to them, the decision
of the Labor Arbiter became final and executory. The NLRC, therefore, gravely abused its discretion when it modified the
decision of the Labor Arbiter and awarded to the respondents holiday pay and premium for holiday pay. Finally, the CA
affirmed the award of backwages, finding no circumstance that would warrant a reversal of the findings of the Labor
Arbiter and NLRC on this point.15

On September 24, 2001, the CA denied the motion for reconsideration filed by the petitioners due to their failure to
indicate the date of the receipt of the decision to determine the timeliness of the motion.16

Hence, this Petition for Review .

The petitioners submit the following issues:

A. WHETHER OR NOT THE HONORABLE COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION AND POWER
BY VIOLATING THE DOCTRINE OF "STARE DECISIS" LAID DOWN BY THE SUPREME COURT AND THE
APPLICABLE LAWS AS TO THE STATUS OF THE SUGAR WORKERS.

B. WHETHER OR NOT THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN DISMISSING THE MOTION
FOR RECONSIDERATION FOR FAILURE TO STATE THE DATE OF THE RECEIPT OF THE DECISION IN THE
MOTION FOR RECONSIDERATION.17

Petitioner Starke contends that the established doctrine that seasonal employees are regular employees had been
overturned and abandoned by Mercado, Sr. v. NLRC.18 She stresses that in that case, the Court held that petitioners
therein who were sugar workers, are seasonal employees and their employment legally ends upon completion of the
project or the season. Petitioner Starke argues that the CA violated the doctrine of stare decisis in not applying the said
ruling. She asserts that the respondents, who are also sugar workers, are seasonal employees; hence, their employment
can be terminated at the end of the season and such termination cannot be considered an illegal dismissal. Petitioner
Starke maintains that the determination of whether the workers are regular or seasonal employees is not dependent on
the number of hectares operated upon by them, or the number of workers, or the capitalization involved, but rather, in the
nature of the work. She asserts that the respondents also made their services available to the neighboring haciendas. To
buttress her contention that the respondents are seasonal employees, petitioner Starke cites Rep. Act 6982, An Act
Strengthening the Social Amelioration Program in the Sugar Industry, Providing the Mechanics for its Implementation, and
for other Purposes, which recognizes the seasonal nature of the work in the sugar industry.19

Petitioner Starke also takes exception to the denial of her motion for reconsideration due to failure to state the date of the
receipt of the decision. She asserts that a denial of a motion for reconsideration due to such cause is merely directory and
not mandatory on the part of the CA. Considering that the amount involved in this case and the fact that the motion was
filed within the reglementary period, the CA should have considered the motion for reconsideration despite such
procedural lapse.20

On the other hand, the respondents aver that the petitioners erroneously invoke the doctrine of stare decisis since the
factual backdrop of this case and the Mercado case is not similar. The respondents posit that the Mercado case ruled on
the status of employment of farm laborers who work only for a definite period of time for a farm owner, after which they
offer their services to other farm owners. Contrarily, the respondents contend that they do not work for a definite period
but throughout the whole year, and do not make their services available to other farm owners. Moreover, the land involved
in the Mercado case is comparatively smaller than the sugar land involved in this case. The respondents insist that the
vastness of the land involved in this case requires the workers to work on a year-round basis, and not on an "on-and-off"
basis like the farm workers in the Mercado case.

Finally, the respondents maintain that the requirement that the date of receipt of the decision should be indicated in the
motion for reconsideration is mandatory and jurisdictional and, if not complied with, the court must deny the motion
outright.21

The petition is without merit.

On the substantial issue of whether the respondents are regular or seasonal employees, the petitioners contend that the
CA violated the doctrine of stare decisis by not applying the ruling in the Mercado case that sugar workers are seasonal
employees. We hold otherwise. Under the doctrine of stare decisis, when a court has laid down a principle of law as
applicable to a certain state of facts, it will adhere to that principle and apply it to all future cases in which the facts are
substantially the same.22 Where the facts are essentially different, however, stare decisis does not apply, for a perfectly
sound principle as applied to one set of facts might be entirely inappropriate when a factual variance is introduced.23

The CA correctly found that the facts involved in this case are different from the Mercado case; therefore, the ruling in that
case cannot be applied to the case at bar, thus:
We do not find the concept of stare decisis relevant in the case at bench. For although in the Mercado case, the Supreme
Court held the petitioners who were sugar workers not to be regular but seasonal workers, nevertheless, the same does
not operate to abandon the settled doctrine of the High Court that sugar workers are considered regular and permanent
farm workers of a sugar plantation owner, the reason being that there are facts present that are peculiar to the Mercado
case. The disparity in facts between the Mercado case and the instant case is best exemplified by the fact that the former
decision ruled on the status of employment of farm laborers, who, as found by the labor arbiter, work only for a definite
period for a farm worker, after which they offer their services to other farm owners, considering the area in question being
comparatively small, comprising of seventeen and a half (17') hectares of land, such that the planting of rice and sugar
cane thereon could not possibly entail a whole year operation. The herein case presents a different factual condition as
the enormity of the size of the sugar hacienda of petitioner, with an area of two hundred thirty-six (236) hectares, simply
do not allow for private respondents to render work only for a definite period.

Indeed, in a number of cases, the Court has recognized the peculiar facts attendant in the Mercado case. In Abasolo v.
NLRC,24 and earlier, in Philippine Tobacco Flue-Curing & Redrying Corporation v. NLRC,25 the Court made the following
observations:

'In Mercado, although respondent constantly availed herself of the petitioners' services from year to year, it was clear from
the facts therein that they were not in her regular employ. Petitioners therein performed different phases of agricultural
work in a given year. However, during that period, they were free to work for other farm owners, and in fact they did. In
other words, they worked for respondent, but were nevertheless free to contract their services with other farm owners.
The Court was thus emphatic when it ruled that petitioners were mere project employees, who could be hired by other
farm owners'.26

Recently, the Court reiterated the same observations in Hacienda Fatima v. National Federation of Sugarcane Workers-
Food and General Trade27 and added that the petitioners in the Mercado case were "not hired regularly and repeatedly for
the same phase/s of agricultural work, but on and off for any single phase thereof."

In this case, there is no evidence on record that the same particulars are present. The petitioners did not present any
evidence that the respondents were required to perform certain phases of agricultural work for a definite period of time.
Although the petitioners assert that the respondents made their services available to the neighboring haciendas, the
records do not, however, support such assertion.

The primary standard for determining regular employment is the reasonable connection between the particular activity
performed by the employee in relation to the usual trade or business of the employer.28 There is no doubt that the
respondents were performing work necessary and desirable in the usual trade or business of an employer. Hence, they
can properly be classified as regular employees.

For respondents to be excluded from those classified as regular employees, it is not enough that they perform work or
services that are seasonal in nature. They must have been employed only for the duration of one season.29 While the
records sufficiently show that the respondents' work in the hacienda was seasonal in nature, there was, however, no proof
that they were hired for the duration of one season only. In fact, the payrolls,30 submitted in evidence by the petitioners,
show that they availed the services of the respondents since 1991. Absent any proof to the contrary, the general rule of
regular employment should, therefore, stand. It bears stressing that the employer has the burden of proving the
lawfulness of his employee's dismissal.31

On the procedural issue, petitioner Starke avers that the CA should not have denied outright her motion for
reconsideration, considering its timely filing and the huge amount involved. This contention is already moot. Petitioner
Starke has already aired in this petition the arguments in her motion for reconsideration of the CA decision, which have
been adequately addressed by this Court. Assuming arguendo that the CA indeed failed to consider the motion for
reconsideration, petitioner Starke was not left without any other recourse.32

IN LIGHT OF ALL THE FOREGOING, the petition is DENIED. The Decision of the Court of Appeals, dated July 31, 2001,
and its Resolution dated September 24, 2001 are hereby AFFIRMED.

SO ORDERED.

G.R. No. 171107               September 5, 2012

ANITA C. VIANZON, Heir of the Late Lucila Candelaria Gonzales, Petitioner,

vs.
MINOPLE MACARAEG, Respondents.
 DECISION

MENDOZA, J.:

This is a Petition for Review on Certiorari under Rule 45 seeking to reverse and set aside the October 19, 2005
Decision1 of the Court of Appeals (CA), in CA-G.R. SP No. 88816, reversing the August 18, 2004 Resolution2 of the Office
of the President (OP) which declared the late Lucila Candelaria Gonzales (Lucila) as the "legitimate and lawful
purchaser/beneficiary"3 of

x x x Lot No. 1222, Psd-78000 of the Dinalupihan Landed Estate administered by the Department of Agrarian Reform,
containing an area of 3.1671 hectares located at Barangay Saguing, Dinalupihan, Bataan.4

The Factual and Procedural Antecedents:

The subject land formed part of the 10-hectare Lot No. 657 earlier awarded to the late Pedro Candelaria (Pedro), the
father of Lucila. In 1950, Pedro hired respondent Minople Macaraeg (Minople) to work on Lot 657. In 1956, Pedro divided
Lot 657 among his four children, including Lucila. Eventually, Lucila’s undivided share became Lot No. 1222, the subject
landholding.5

On August 17, 1960, Lucila and the Land Tenure Administration (LTA, now the Department of Agrarian Reform) entered
into a contract denominated as "Agreement to Sell No. 5216" involving Lot No. 1222.6

After almost 30 years, or on May 8, 1989, Lucila’s representative, petitioner Anita C. Vianzon (Anita), executed a deed of
absolute sale in favor of her daughter, Redenita Vianzon (Redenita), conveying a 2.5- hectare portion of the subject land.
In connection with this, Minople also affixed his signature on a document denominated as "Waiver of Right" purportedly
relinquishing all his rights as well as his interest over the same property in favor of Redenita.7

Soon thereafter, Anita filed two applications to purchase the subject property – one in 1990 and the other on August 7,
1996. Minople, however, also filed his own application to purchase the same land on September 9, 1996. These
conflicting claims were brought before the Department of Agrarian Reform (DAR). On November 6, 1996, the Chief of the
Legal Division of the DAR Provincial Office recommended that the subject land be "divided equally" between the two
applicants since both had been in some way "remiss in their obligations under the agrarian rules."8 Based on the
recommendation, the Officer-in-Charge Municipal Agrarian Reform Officer (MARO) referred the matter to the Provincial
Agrarian Reform Officer (PARO) of Bataan. In his First Endorsement, dated November 14, 1996, the PARO concurred
with the findings and recommendation of the Legal Division Chief and forwarded its concurrence to the DAR Regional
Director. The Officer-in-Charge Regional Director (RD) issued a corresponding order dividing the subject property equally
between the parties. According to him, the parties were "in pari delicto, the most equitable solution is to award the
property to both of them."9

Minople sought reconsideration but this was treated as an appeal by the RD and was elevated to the DAR Secretary,
who, on November 10, 1997, set aside the order and upheld Minople’s right over the property.10 In setting aside the RD
order, the DAR Secretary found that it was Minople who was the "actual possessor/ cultivator of the lot in
consideration."11 He pointed out that Lucila’s act of "hiring" Minople to render service pertaining to all the aspects of
farming did not only violate the old LTA Administrative Order (A.O.) but it also contravened the very undertaking made by
Lucila’s representative and heir, Anita, in her latest sales application warranting its rejection.

Aggrieved, Anita appealed to the OP. On June 18, 2003, the OP issued a minute decision12 affirming in toto the November
10, 1997 Order of the DAR Secretary. According to the OP,

After a careful and thorough evaluation of the records of the case, this Office hereby adopts by reference the findings of
fact and conclusions of law contained in the DAR Decision dated 10 November 1997.13

Anita then moved for reconsideration. On August 18, 2004, the OP, giving weight to the "Agreement to Sell No. 5216"
between Lucila and the DAR’s predecessor (the LTA), issued a resolution reversing and setting aside its minute decision
and declaring Lucila as "the legitimate and lawful purchaser/ beneficiary of the landholding in question."14 The OP stated
that the subject lot had been paid for as early as 1971 and that the same had been declared in the name of the late Lucila
for tax purposes. In addition, according to the OP, the "personal cultivation aspect of the said Agreement to Sell" was
achieved or carried out by Lucila "with Minople Macaraeg as her hired farmworker."15 The OP also took note that neither
the LTA nor the DAR failed to give the necessary notice of cancellation to Lucila or Anita.16
Lastly, the OP opined that when the Agreement to Sell was executed back in 1960, Minople was merely hired as a
farmworker; ergo, his actual possession and cultivation were not in the concept of owner which explained why the LTA
(now DAR) contracted with Lucila and not with Minople.17

Not in conformity, Minople elevated the matter to the CA via a petition for review under Rule 43. In upholding Minople’s
right to the subject land, the CA anchored its Decision on Section 22 of Republic Act (R.A.) No. 6657, or the
Comprehensive Agrarian Reform Law (CARL). According to the CA, Minople had been working on the contested lot since
1950, as a tenant and performing all aspects of farming and sharing in the harvest of the land, in conformity with DAR’s
A.O. No. 3, Series of 1990, pursuant to the CARL.18

Undaunted, Anita is now before this Court via this petition for review on certiorari presenting the following

STATEMENT OF ISSUES

I. WHETHER OR NOT THE COURT OF APPEALS SERIOUSLY ERRED IN PASSING OVER THE MERITS OF THE
PETITION FOR REVIEW FILED BY THE RESPONDENT BEFORE THE SAID COURT DESPITE THE FACT THAT
RESPONDENT THEREIN FILED THE SAME BEYOND THE REGLEMENTARY PERIOD FOR FILING THE SAME.

II. WHETHER OR NOT THE COURT OF APPEALS SERIOUSLY ERRED IN RULING THAT THE RESPONDENT, AS
TENANT, HAS LEGAL STANDING IN IMPUGNING THE OWNERSHIP OF THE PETITIONER, HIS LANDLORD, IN
CONTRAVENTION OF THE PROVISIONS OF ARTICLE 1436 OF THE CIVIL CODE OF THE PHILIPPINES AS WELL
AS SECTION 3(B), RULE 131 OF THE RULES OF COURT AND OTHER JURISPRUDENCE ON THE MATTER.

III. WHETHER OR NOT THE COURT OF APPEALS SERIOUSLY ERRED IN DEPRIVING THE PETITIONER OF HER
PROPERTY IN VIOLATION OF DUE PROCESS OF LAW AS WELL AS THE NON-IMPAIRMENT CLAUSE OF THE
CONSTITUTION IN VIEW OF THE LACK OF NOTICE OF CANCELLATION OF THE AGREEMENT TO SELL.

IV. WHETHER OR NOT THE COURT OF APPEALS ERRED IN RULING THAT PETITIONER VIOLATED THE
CONDITIONS CONTAINED IN THE AGREEMENT TO SELL.

V. WHETHER OR NOT THE COURT OF APPEALS ERRED IN RULING THAT THE AWARD OF THE LAND TO THE
RESPONDENT WAS EQUIVALENT TO A NOTICE OF CANCELLATION OF THE AGREEMENT TO SELL.19

The Court finds no merit in the petition.

On the procedural issue

Indeed, the perfection of an appeal in the manner and the period prescribed by law is mandatory and jurisdictional.
Necessarily, the failure to conform to the rules will render the judgment for review final and unappealable. By way of
exception, however, minor lapses are at times disregarded in order to give due course to appeals filed beyond the
reglementary period on the basis of strong and compelling reasons, such as serving the ends of justice and preventing a
grave miscarriage thereof. The period for appeal is set in order to avoid or prevent undue delay in the administration of
justice and to put an end to controversies. It is there not to hinder the very ends of justice itself. The Court cannot have
purely technical and procedural imperfections as the basis of its decisions. In several cases, the Court held that "cases
should be decided only after giving all parties the chance to argue their causes and defenses."20

In Philippine National Bank, et al. v. Court of Appeals, we allowed, in the higher interest of justice, an appeal filed three
days late.

In Republic v. Court of Appeals, we ordered the Court of Appeals to entertain an appeal filed six days after the expiration
of the reglementary period; while in Siguenza v. Court of Appeals, we accepted an appeal filed thirteen days late.
Likewise, in Olacao v. NLRC, we affirmed the respondent Commission's order giving due course to a tardy appeal "to
forestall the grant of separation pay twice" since the issue of separation pay had been judicially settled with finality in
another case. All of the aforequoted rulings were reiterated in our 2001 decision in the case of Equitable PCI Bank v. Ku.
(previous citations omitted)21

There is no denying that the controversy between the parties involves the very right over a considerable spread of land. In
fact, it is Anita’s position that the opposing parties in this case "have equal substantive rights over the lot in question."22 It
was, therefore, correct on the part of the CA not to permit a mere procedural lapse to determine the outcome of this all too
important case. It must be noted that the CA was the first level of judicial review, and coming from the OP’s vacillating
stance over the controversy, it was but correct to afford the parties every chance to ventilate their cause. Considering
further that the party who failed to meet the exacting limits of an appeal by a mere seven days was an old farmer who was
not only unlearned and unskilled in the ways of the law but was actually an illiterate who only knew how to affix his
signature,23 certainly, to rule based on technicality would not only be unwise, but would be inequitable and unjust. All told,
the Court sanctions the CA ruling allowing the petition for review of Minople.

On the substantive issue

The Court now proceeds with the crux of the case, that is, who between the opposing parties has a rightful claim to the
subject landholding? In resolving the second and the fourth issues, this Court finds it inevitable to resolve the third and the
fifth issues as well. Thus, the Court will discuss them jointly.

The beacon that will serve as our guide in settling the present controversy is found in the Constitution, more particularly
Articles II and XIII:

Article II

SEC.21. The State shall promote comprehensive rural development and agrarian reform.

xxx

Article XIII

SEC. 4. The State shall, by law, undertake an agrarian reform program founded on the right of farmers and regular farm
workers, who are landless, to own directly or collectively the lands they till or, in the case of other farmworkers, to receive
a just share of the fruits thereof. To this end, the State shall encourage and undertake the just distribution of all
agricultural lands, subject to such priorities and reasonable retention limits as the congress may prescribe, taking into
account ecological, developmental, or equity considerations, and subject to the payment of just compensation. In
determining retention limits the State shall respect the right of small land owners. The State shall further provide
incentives for voluntary land-sharing. (Underscoring supplied)

In this regard, the Court finds the elucidation of Framer Jaime Tadeo, in one of the deliberations of the Constitutional
Commission, enlightening.

MR. TADEO.

. . . Ang dahilan ng kahirapan natin sa Pilipinas ngayon ay ang pagtitipon-tipon ng vast tracts of land sa kamay ng iilan.
Lupa ang nagbibigay ng buhay sa magbubukid at sa iba pang manggagawa sa bukid. Kapag inalis sa kanila ang lupa,
parang inalisan na rin sila ng buhay. Kaya kinakailangan talagang magkaroon ng tinatawag na just distribution. . . .

xxx

MR. TADEO.

Kasi ganito iyan. Dapat muna nating makita ang prinsipyo ng agrarian reform, iyong maging may-ari siya ng lupa na
kaniyang binubungkal. Iyon ang kauna-unahang prinsipyo nito. . . .

x x x.24

Picking up from there, Congress enacted R.A. No. 6657, or the CARL of 1988. Section 22 of this law enumerates those
who should benefit from the CARL.

SEC. 22. Qualified Beneficiaries. – The lands covered by the CARP shall be distributed as much as possible to landless
residents of the same barangay, or in the absence thereof, landless residents of the same municipality in the following
order of priority:

(a) agricultural lessees and share tenants;

 (b) regular farmworkers;

(c) seasonal farmworkers;

(d) other farmworkers;

(e) actual tillers or occupants of public lands;

(f) collectives or cooperatives of the above beneficiaries; and

(g) others directly working on the land.

x x x.

A basic qualification of a beneficiary shall be his willingness, aptitude and ability to cultivate and make the land as
productive as possible. The DAR shall adopt a system of monitoring the record or performance of each beneficiary, so
that any beneficiary guilty of negligence or misuse of the land or any support extended to him shall forfeit his right to
continue as beneficiary. The DAR shall submit periodic reports on the performance of the beneficiaries to the PARC.

x x x.

Pursuant to this, the DAR issued A.O. No. 3, Series of 1990. The foremost policy in said A.O.’s Statement of Policies
states,

Land has a social function, hence, there is a concomitant social responsibility in its ownership and should, therefore, be
distributed to the actual tillers/occupants.25

Thus, A.O. No. 3 lays down the qualifications of a beneficiary in landed estates26 in this wise: he or she should be (1)
landless; (2) Filipino citizen; (3) actual occupant/tiller who is at least 15 years of age or head of the family at the time of
filing of application; and (4) has the willingness, ability and aptitude to cultivate and make the land productive.27

The significance of the allocatee/awardee being the actual tiller is made even clearer in the "Operating Procedures" of
A.O. No. 3 itself, where the MARO is required to make a determination as to who the actual tiller is, for it is to him that the
land should be awarded. In fact, item 2.1.3, states that if it is found that the allocatee or awardee employs others to till the
land, the MARO should cancel the Order of Award (OA) or Certificate of Land Transfer (CLT) and issue a new one in
favor of the "qualified actual cultivator/occupant."28

In this case, Anita questions the existence of a tenancy relationship between her/Lucila and Minople, pointing out the
purported DAR Director’s finding that Minople deliberately failed to deliver the harvest for four years.29 She argues that this
negates any tenancy relationship between them and insists that Minople was only a farm worker initially engaged by the
late Pedro Candelaria. To this, she adds that LTA would not have entered into an agreement to sell with Lucila in 1960 if it
was Minople who was the actual possessor and cultivator back then.30 Anita continues that even if tenancy existed,
Minople could not controvert the title of Lucila/Anita being his purported landlord.31

Anita’s argument, however, is misplaced. The cases she relied on referred to possession of leased premises in general. In
this case, the issue is farm or agricultural tenancy and, inescapably, the applicable law is the CARL and its implementing
rules. After all, the law was well in effect when Minople and Anita filed their respective applications to purchase the subject
land.

Anita argues that the earlier sale made by LTA to her predecessor was never questioned, hence, it remains valid.32 In fact,
Anita claims, the late Lucila had already paid the purchase price sometime in 1971.33 She then proceeds to argue that
"personal cultivation" may be "with the aid of labor from within his immediate household."34 Finally, Anita cries out for
fairness. According to her:

It would be unfair and unjust if the subject lot which was originally cultivated by the Petitioner’s father, Pedro Candelaria,
would only go to another who was just a mere helper of the said Pedro Candelaria, thereby rendering into naught the
hardships of the petitioner and her father in occupying and nourishing the subject land which they have occupied even
before the 50’s decade. Respondent would not have been there in Dinalupihan were it not for the Petitioner’s father who
secured his services as ‘boy’ or mere household helper.35
While Anita insists that "Agreement to Sell No. 5216" executed back in 1960 remains effective, her act of filing the above-
mentioned applications to purchase after three decades of waiting for its fruition only reveals her skepticism in that very
same instrument. Anita herself filed not one, but two subsequent applications. It was her application on August 7, 1996
together with that of Minople which gave rise to the present controversy. These conflicting applications were brought
before the DAR, all the way up to the Secretary, and then to the OP. At this point, therefore, Anita had effectively
abandoned her, or rather Lucila’s "Agreement to Sell No. 5216" of 1960 with the then LTA. She cannot later on deny this
and conveniently hide behind the feeble position of the OP that it was unnecessary for Anita/ Lucila to file her application
because the said agreement remained valid.

The fact remains, however, that there were two applications subsequently filed by Anita and acted upon by the DAR, the
same office charged with executing the earlier "Agreement to Sell No. 5216," where Anita would have gone to in order to
implement her all important agreement.

This is the same agency, acting through its Secretary, which found that as early as the time of Lucila, there had been
violations of "Agreement to Sell No. 5216" and the existing laws and rules upon which it was based. This is the same
agency which eventually awarded the subject landholding to Minople. The CA found, to which the Court agrees, that this
was "equivalent to a notice of cancellation of the earlier ‘Agreement to Sell No. 5216.’"36

As regards Anita’s claim that the land had been paid for, the provision that she relies on does not only speak of payment
of the purchase price but also requires the performance of all the conditions found in the said agreement. Thus, if the
Court is to assume the agreement to be valid, the LTA or the DAR may still not be compelled to issue a deed of sale in
her favor because of violations of the agreement.

Agreement to Sell No. 5216

Section 10. Upon full payment of the purchase price as herein stipulated including all interest thereon and the
performance by the PROMISSEE of all the conditions herein required, the Administration shall execute a Deed of Sale
conveying the property subject of this Agreement to the PROMISSEE."37 (Underscoring supplied)

Even if the Court assumes that there were no violations, why did Anita or her predecessor Lucila not compel the DAR to
issue a deed of sale? Why did Anita choose to file the applications to purchase in the 1990s?

For Minople’s part, there is no denying that he had been tilling the subject land since the 1950s. According to then DAR
Secretary Ernesto D. Garilao:

After a thorough evaluation of the records of the case, together with its supporting documents, this Office finds the appeal
to be impressed with merit, considering the fact that Minople Macaraeg is the actual possessor/cultivator of the lot in
consideration as contained in the Report and Recommendation dated November 6, 1996 of Atty. Judita C. Montemayor,
Chief, Legal Division of DAR Region III and the Certification dated April 23, 1997 issued by the BARC Chairman (Punong
Barangay) of Dinalupihan Bataan.

The act of Lucila Candelaria Gonzales in allowing Minople Macaraeg to perform all the farming activities in the subject lot
established a tenancy relationship between the former and the latter because the latter is doing the farm chores and is
paid from the produce or harvest of the land in the amount of 20 cavans of palay every harvest. The claim of Lucila
Candelaria Gonzales that Minople Macaraeg is only a hired farm worker will not hold water, considering the fact that he
(Minople Macaraeg) was not hired to work on just a branch of farming, but performed work pertaining to all the branches
thereof, on the basis of sharing the harvest not on a fixed salary wage.38

With Minople continuously performing every aspect of farming on the subject landholding, neither Anita nor Lucila
personally cultivated the subject land.1âwphi1 While Anita continues to question the existence of a tenancy relationship,
she did admit that her predecessors had hired Minople to till the land decades earlier. This clearly violated then LTA A.O.
No. 2, Series of 1956 as well as the DAR’s AO No. 3 series of 1990. This also contravened her own undertaking in her
April 7, 1996 "Application to Purchase Lot."

"2.that I vvill not 1 subdivide, sold (sic) or in any manner transfer or encumber said land without the proper consent of the
DAR subject further to the terms and conditions provided for under Republic Act No. 6657 and other Operating laws not
inconsistent thereon; 3.That I shall not employ or use tenants whatever form in the occupation or cultivation of the land or
shall not be subject of share tenancy pursuant to the provision of PD No. 132 dated March 13, 1973, x x x."39 (Emphasis
supplied)
R.A. No. 6657 or the CARL "is a social justice and pove1iy 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." 40

Given all the laws in place together with the undisputed fact that Minople worked on the subject landholding for more than
half a century, the inescapable conclusion is that l'v1inople as the actual tiller of the land 1s entitled to the land mandated
by our Constitution and R.A. No. 6657.

WHEREFORE, the petition is DENIED, the October 19, 2005 Decision and January 10, 2006 Resolution of the Court of
Appeals, in CA-G.R. SP No. 88816, arc hereby AFFIRMED. This is without prejudice on the part of petitioner to recover
her payments from the government, if warranted.

SO ORDERED.

G.R. No. 140319             May 5, 2006

RODOLFO HERMOSO, ANTONIO JACOBE, BRIGIDO PORTUGUESE, REGALADO AUSTRIA, LOLITA ANGELES,
PRESINA BERSABE, ANGELITO ROSQUETA, CONSTANCIO PROTUGUESE, ROGELIO SANTOS, ALIAS FIEL,
CATALINA VALENZUELA, JAIME PANGILINAN, ESTELA DE VERA MACALALAD, LETICIA LOPEZ, NOEMI
BAUTISTA, GREGORIO ANTAZO, ELPIDIO CRIZALDO, OSCAR VICTORIO and ANTONIO ZURITA, Petitioners,
vs.
C.L. REALTY CORPORATION, Respondent.

DECISION

GARCIA, J.:

Assailed and sought to be set aside in this petition for review under Rule 45 of the Rules of Court are the following
issuances of the Court of Appeals (CA) in CA-G.R. SP No. 43795, to wit:

1. Decision1 dated March 31, 1999 reversing and setting aside the decision of the Department of Agrarian Reform
Adjudication Board (DARAB) Proper dated August 21, 1996;

2. Resolution2 dated June 17, 1999 denying petitioners’ motion for extension of time to file a motion for
reconsideration, thereby also denying their belatedly-filed motion for reconsideration; and

3. Resolution3 dated October 11, 1999 denying the motion for reconsideration with finality.

Respondent C.L. Realty Corporation (C.L. Realty, for short) is the registered owner of a parcel of land with an area of
46.1476 hectares located at Brgy. Alas-asin, Mariveles, Bataan, covered by Transfer Certificate of Title (TCT) No. T-
60221.

On August 28, 1991, C.L. Realty received a Notice of Acquisition of the said parcel of land from Regional Office No. III of
the Department of Agrarian Reform (DAR), followed by a Notice of Valuation under which the property in question was
valued at P273,559.00. C.L. Realty challenged the valuation thus made, claiming it to be unconscionably low since, under
its Sworn Statement on Agricultural Land Holdings dated February 8, 1988 and filed with the Municipal Assessor’s Office,
P4,614,760.00 was the amount entered as the fair value of the land.

On September 8, 1992, C.L. Realty wrote DAR Regional Director Antonio Nuesa requesting that the issuance of the
Certificates of Land Ownership Award (CLOAs) covering the property in question be held in abeyance. The following day,
Director Nuesa indorsed the request to Bataan Provincial Agrarian Reform Officer (PARO) Florencio Siman for
appropriate action.

Barely a month after, C.L. Realty, without requesting for the lifting of the land coverage, formally requested and applied
with DAR-Region III for conversion of the land from agricultural to industrial/commercial use which request was also
indorsed in due time to the PARO of Bataan for appropriate action.
Evidently unbeknownst to C.L. Realty when it made its deferment request and filed its application for conversion, CLOAs
were already issued to herein petitioners Rodolfo Hermoso, et al. In fact, pursuant to the CLOAs thus issued, some of
them were able to secure on September 1, 1992, while the others, the following day, the corresponding certificates of title.
Since then, the petitioners appeared to have entered into possession of said land and planted crops thereon.

Later apprised of the CLOA issuance, C.L. Realty filed with the DARAB- Region III office a petition, later docketed as
DARAB Case No. 092-B-93, praying for the cancellation of herein petitioners’ CLOAs on the ground of irregular,
premature and anomalous issuance. Specifically, C.L. Realty alleged, inter alia, that the CLOA recipients do not meet the
basic farmer-beneficiary qualification requirement and are not under the order of priority defined in Section 22 of Republic
Act (R.A.) No. 66574.

In their answer, petitioners denied allegations of irregularity and prematurity in the issuance of the CLOAs in question,
adding that all legal requirements for the purpose have been complied with and that they are all qualified farmer-
beneficiaries. They also contend that the petition to cancel was erroneously directed at them when it should have been
addressed to the DAR officials who processed/approved their applications filed in good faith.

Finding that undue haste attended the processing and issuance of the CLOAs in question, and that the petitioners were
not qualified farmer-beneficiaries under Section 22 of R.A. No. 6657, the DARAB Provincial Adjudicator rendered, on
October 28, 1993, a decision ordering the cancellation of the CLOAs thus issued to the petitioners.

Therefrom, petitioners appealed to the DARAB Proper at Diliman, Quezon City. In that recourse, docketed as DARAB
Case No. 1999 (Reg. Case No. 092-B-93), petitioners reiterated their position set forth in their answer to the petition to
cancel, and alleged, in addition, that the DARAB provincial adjudicator had no authority or jurisdiction to cancel or annul
the CLOAs, the same having already been registered in their names with the Register of Deeds.

On August 21, 1996, the DARAB Proper rendered a decision finding for petitioners, disposing as follows:

WHEREFORE, premises considered, finding the appeal meritorious, the decision of the Honorable Adjudicator a quo is
hereby REVERSED and SET ASIDE. A new judgment is rendered rejecting any attempt to nullify the issuance of
Certificates of Land Ownership Award (CLOAs) to herein respondents-appellants. The Board upholds the efficacy of the
same.

The DARAB Proper predicated its disposition on the premise that C.L. Realty, failing as it did to substantiate its
allegations respecting the lack of qualification as farmer-beneficiaries of petitioners, had not overturned the presumption
that official duty had been duly performed.

Following the denial of its motion for reconsideration, C.L. Realty went to the Court of Appeals (CA) by way of petition for
review, thereat docketed as CA-G.R. SP No. 43795.

At stated at the outset, CA, in the herein assailed decision5 dated March 31, 1999, set aside the August 21, 1996 decision
of the DARAB Proper and reinstated the ruling of the provincial adjudicator, thus:

WHEREFORE, the premises considered, the appealed decision of the DARAB is hereby REVERSED and SET ASIDE
and the Decision of the Provincial Adjudicator dated 28 October 1993 is HEREBY REINSTATED.

Subsequently, petitioners, through counsel, filed a motion for extension of time to file a motion for reconsideration. On
May 10, 1999, they filed their motion for reconsideration, followed fourteen (14) days later by a supplemental motion for
reconsideration.

Citing Habaluyas Enterprises, Inc., et. al. vs. Hon. Maximo Japson, et. al.,6 the CA, in its equally assailed resolution7 of
June 17, 1999, denied the motion for extension and, consequently, the motion for reconsideration. On July 1, 1999,
petitioners moved for a reconsideration of the resolution dated June 17, 1999, but their motion was also denied in the
resolution of October 11, 1999.8

Aggrieved, petitioners are now before us via this petition for review under Rule 45 of the Rules of Court.

In the meanwhile, the Court, upon application of the petitioners, issued, on August 7, 2000, a temporary restraining
order9 enjoining respondent, thru its agents, from, among other things, entering into the lots occupied by petitioners and
exercising rights of ownership.
The issues raised, as summarized in petitioners’ memorandum10, turn on the following questions:

1. Whether or not the DARAB provincial adjudicator has jurisdiction to nullify the CLOAs issued to petitioners,
given that the corresponding TCTs have been issued over the lands covered;

2. Whether or not the petition filed by C.L. Realty before the Office of the Provincial Adjudicator should have been
dismissed for non-joinder of indispensable parties;

3. Whether or not the CA failed to take into account facts and circumstances supportive of herein petitioners’
cause, and, on the other hand, accorded undue weight to the findings of the Provincial Adjudicator; and

4. Whether or not the CA erred in denying herein petitioners’ motion for extension of time to file a motion for
reconsideration.

The jurisdictional and procedural issues raised at the threshold hereof cannot carry the day for the petitioners.

Vis-à-vis petitioners’ jurisdictional challenge, it may be stated that the DAR, through its adjudication arm, i.e., the DARAB
and its regional and provincial adjudication boards, exercises quasi-judicial functions and jurisdiction on all matters
pertaining to agrarian dispute or controversy and the implementation of agrarian reform laws.11 In Nuesa vs. Court of
Appeals,12 the Court, citing the Revised Rules of Procedure of the DARAB, stated that the DARAB has primary, original
and appellate jurisdiction "to determine and adjudicate all agrarian disputes, cases, controversies, and matters or
incidents involving the implementation of all the Comprehensive Agrarian Reform Program [CARP] under R.A. 6657, E.O.
Nos. 228, 229 and 129-A, R.A. 3844, as amended by R.A. 6389, P.D. No. 27 and other agrarian laws and their
implementing rules and regulations."  The Court made a similar pronouncement on the jurisdiction of DARAB in Bautista
vs. Mag-isa Vda. De Villa.13 Under Section 1(f) of the DARAB Rules of Procedure, such jurisdiction of the DARAB includes
cases involving "the issuance, correction and cancellation of … (CLOAs) and Emancipation Patents (EPs) which are
registered with the Land Registration Authority." Surely, such jurisdiction cannot be deemed to disappear the moment a
certificate of title is issued. For, such certificates are not modes of transfer of property but merely evidence of such
transfer. Needless to state, there can be no valid transfer of title should the CLOA on which it was grounded is void.

At any rate, the petitioners are in no position to question the jurisdiction of the DAR and its adjudicative arm at this late
junction of the proceedings. They are already estopped at this stage to challenge the competency of the DARAB and its
provincial adjudicator to have taken cognizance of the case. This disposition becomes all the more pressing considering
the petitioners’ active participation in the proceedings below, and their having been the recipients of a favorable decision
dated August 21, 1996 of the DARAB Proper. Decisional law frowns upon a jurisdictional challenge cast against such a
milieu.

Petitioners’ thesis, under the second ground, that the DAR officials who processed and approved the applications for
issuance of CLOAs and the Register of Deeds are indispensable parties cannot be given cogency. Surely, a final
determination of the petition for cancellation of CLOAs could be had even without joining in such petition any of the
officials adverted to. And as a matter of long and recognized practice, a public respondent need only to be impleaded
in certiorari  proceedings  under Rule 65 of the Rules of Court, but even then, the adjudicating judge, officer or tribunal
would only be considered a nominal party.14 In petitions for review on certiorari  as a mode of ordinary appeal under either
Rule 4315 or 45,16 only the private parties to the case are to be impleaded.

The foregoing notwithstanding, the Court still rules for petitioners due to compelling reasons ostensibly overlooked by the
appellate court. We start with respondent C.L. Realty’s standing to question the qualification of the petitioners as CARP
beneficiaries. As the DARAB Proper aptly observed:

It is the Municipal Agrarian Reform Officer (MARO) or the Provincial Agrarian Reform Officer (PARO) together with the
Barangay Agrarian Reform Committee (BARC) who screen and select the possible agrarian beneficiaries. If there are
farmers who claimed they have a priority over those who have been identified by the MARO as beneficiaries of the land,
said farmers can file a protest with the MARO or the PARO who is currently processing the Land Distribution Folder
(Administrative Order No. 10, Series of 1990).

xxx The landowner, however, does not have the right to select who the beneficiaries should be.  Hence, other farmers who
were not selected and claimed they have a priority over those who have been identified as such can file a written protest
with the MARO or the PARO who is currently processing the claim folder.17 [Emphasis supplied]
Denying a landowner the right to choose a CARP beneficiary is, in context, only proper. For a covered landholding does
not revert back to the owner even if the beneficiaries thus selected do not meet all necessary qualifications. Should it be
found that the beneficiaries are indeed disqualified, the land acquired by the State for agrarian reform purposes will not be
returned to the landowner but shall go instead to other qualified beneficiaries.

Lest it be overlooked, respondent, upon its receipt of the Notice of Acquisition of the land in question, never disputed the
propriety, let alone asked for the lifting, of such acquisition. Respondent, from its arguments, does not, therefore, have a
claim to retaining ownership of the land. All it did was to except from the valuation given to its former landholding. And
even as to the issue of just compensation, there is no showing that respondent ever brought the matter to the Regional
Trial Court (RTC) as even respondent, in its memorandum, admits it should have done. In this regard, respondent, citing
what the Court said in Republic vs. Court of Appeals,18 states in its memorandum:

Thus, under the law, the Land Bank of the Philippines is charged with the initial responsibility of determining the value of
lands placed under land reform and the compensation to be paid for their taking. Through notice sent to the landowner
pursuant to 16(a) of R.A. No. 6657, the DAR makes an offer. In case the landowner rejects the offer, a summary
administrative proceeding is held and afterward the provincial (PARAD), the regional (RARAD) or the central (DARAB)
adjudicator as the case may be, depending on the value of the land, fixes the price to be paid for the land. If the
landowner does not agree to the price fixed, he may bring the matter to the RTC acting as Special Agrarian Court. This in
essence is the procedure for the determination of compensation cases under R.A. No. 6657. x x x In the terminology of
Section 57, the RTC, sitting as a Special Agrarian Court, has "original and exclusive jurisdiction over all petitions for the
determination of just compensation to landowners." It would subvert this "original and exclusive" jurisdiction of the RTC for
the DAR to vest original jurisdiction in compensation cases in administrative officials and make the RTC an appellate court
for the review of administrative decisions.19 (Underlining in the original)

Respondent emphasizes in the above-quoted portion of its memorandum that the RTC has jurisdiction over just
compensation disputes. However, nowhere is it shown, even in its own allegations of facts, that respondent brought this
matter to the RTC. Instead, respondent sought a conversion of the land from agricultural to industrial/commercial use.

Under DAR Administrative Order (AO) No. 1, series of 1990, as amended by AO No. 12, series of 1994, "[A]fter the DAR
has issued a Notice of Acquisition of an agricultural land under the compulsory acquisition process … no application for
conversion of said land from the landowner or anyone acting on his behalf shall be given due course." Given this
perspective, it cannot plausibly be said that the issuance of CLOAs during the pendency of the conversion proceedings
was anomalous, irregular or premature. As it were, the application for conversion was improper from the start, the notice
of acquisition having previously been issued.

Respondent's ploy for conversion having failed, and the CLOAs having been issued, respondent resorted to seeking the
cancellation of said CLOAs on the basis of the lack of qualifications of the beneficiaries and the pendency of its
application for conversion. Needless to stress, respondent pursued a strange course of action considering that, originally,
its only grievance related to property valuation.

As stated earlier, respondent was without personality to question the selection of beneficiaries. However, even if it had
such personality, its arguments against petitioners’ qualifications as farmer-beneficiaries do not bear sufficient weight to
peremptorily justify the cancellation of the issued CLOAs. It may be that the petitioners were employed or self-employed.
This reality, however, even if true, does not per se argue against their qualifications as CARP beneficiaries at the time the
award was made. For all the law requires, in the minimum, is that the prospective beneficiary be a landless resident
preferably of the barangay or municipality, as the case may be, where the landholding is located, provided he has, in the
language of Section 22 of RA 6657, the "willingness, aptitude and ability to cultivate and make the land as productive as
possible". A farmer-beneficiary need not undertake every chore in the cultivation of the farmholding all by his personal
self; he may be assisted in the farm work and the care of plants by his immediate farm household without forfeiting his
right to continue as such beneficiary.20

In the case at bench, it appears that the BARC, the MARO and/or PARO have screened and, after investigation,
identified, or at least are presumed to have duly screened and identified, the petitioners as qualified beneficiaries of the
land in question and have found the property to be suitable for agricultural productivity. This determination has not been
overcome by proof to the contrary. To be sure, the provincial adjudicator’s posture, as affirmed by the appellate court, that
none of the petitioners meet the qualifications of a farmer beneficiary, since they are factory workers, private employees
or fishermen, cannot be accorded the weight of overturning evidence. For one, the provincial adjudicator did not identify
who among the petitioners are self-employed, factory workers or fishermen, if that be the case. And for another, the
provincial adjudicator did not point to any evidence to establish his simplistic conclusion about petitioners not being
qualified as farmer-beneficiaries.
Another argument was that some of the beneficiaries were not even residents of Brgy. Alas-asin where the land is
located. It ought to be pointed out, however, that the petitioners were residents of neighboring barangays, many of which
were within walking distance from Brgy. Alas-asin. While farmers or farm workers already in the place should be given
preferential rights in the distribution of lands, even people living outside of the barangay where the property is situated
may be qualified as CARP beneficiaries. Section 22 of R.A. No. 6657 says so:

Section 22. Qualified Beneficiaries. - The lands covered by the CARP shall be distributed as much as possible to landless
residents of the same barangay, or in the absence thereof, landless residents of the same municipality in the following
order of priority:

a) agricultural lessees and share tenants;

b) regular farmworkers;

c) seasonal farmworkers;

d) other farmworkers;

e) actual tillers or occupants of public land;

f) collective or cooperative of the above beneficiaries; and

g) others directly working on the land.

xxx xxx xxx

As stressed by the DARAB Proper in its decision, the very essence of the CARP is to uplift and help as many farmers as
possible and make them beneficiaries of the program. Thus, a liberal interpretation is preferred.

Section 22 of the CARP law provides merely for an order of priority in the distribution of the land to beneficiaries. In the
case at bar, there appears to be no applicants other than the petitioners. Thus, even if it be assumed that petitioners fall
under the last enumerated order of beneficiaries, namely, "others directly working on the land," still they are qualified as
beneficiaries since they are all residents of Mariveles, Bataan, where the land is located, though not necessarily all
residents of the same barangay.

It should be stressed, at this juncture, that petitioners have had their CLOAs and certificates of title for over eight (8)
years. Some of them have fully paid the Land Bank for the value of the land awarded them. They have been paying all
these years the real estate taxes on their landholdings, cultivating them in the process.

As a final consideration, we note that the CA had denied with finality petitioners’ motion for reconsideration of its
underlying March 31, 1999 decision21 owing to the belated filing of such motion for reconsideration. To be sure, the
appellate court acted within its sound discretion in denying petitioners’ motion for time to file a motion for reconsideration
and, consequent to such denial, denying the corresponding motion for reconsideration. But the more paramount
consideration to observe in this case is the norm relaxing the rules of procedure in the broader interest of justice, thus
helping litigants secure substantial justice, specially, as here, when the perceived resulting injustice is not proportionate
with the parties’ failure to strictly comply with the prescribed procedure.22

WHEREFORE, the instant petition is hereby GRANTED. The decision of the Court of Appeals in CA-G.R. SP No. 43795
dated March 31, 1999, and its Resolutions dated June 17, 1999 and October 11, 1999 are SET ASIDE and the decision
of the Department of Agrarian Reform Adjudication Board in DARAB Case No. 1999 is hereby REINSTATED.

SO ORDERED.

[CA-G.R. SP No. 46885.  October 30, 2000.]

 
FE B. MERCADO, THEN PARO OF SURIGAO DEL NORTE, NOW REPLACED BY PARO ROMEO PEPE C.
LADAO, petitioner-appellant, vs. REYNALDO ELAJAS, respondent-appellee.
 
DECISION
 
VELASCO, JR., J  p:
Before Us is a Petition For Review of the Provincial Agrarian Reform Officer (PARO) for Surigao del Norte assailing of the
Decision promulgated on April 23, 1997, and the Resolution dated September 10, 1997, of the Department of Agrarian
Reform Adjudication Board (DARAB), in DARAB Case no. 0860 (Reg. Case no. x-300) entitled "Fe B. Mercado, PARO of
Surigao del Norte vs. Reynaldo Elajas" said Decision and Resolution being an affirmation of the Decision promulgated on
January 20, 1992 by the Provincial Agrarian Reform Adjudicator (PARAD) for Surigao del Norte.
The facts are as follows:
It is established that the original owner of the parcel of land which is the subject matter of the instant Petition was
Alejandro Romero, and that the farmer-beneficiary under Presidential Decree No. 27 over the subject landholding,
consisting of more or less 20,501 square meters, was Rosario Tulang who subsequently waived his right over the subject
landholding. The present dispute centers on the question of who between the parties herein has a better right to step into
the original position of Rosario Tulang and be the lawful farmer-beneficiary thereof.
It appears that Reynaldo Elajas entered into the subject landholding sometime around 1982. After taking possession of
the said property, he was able to secure Emancipation Patent No. A-037196 covering the subject landholding, registering
the same in his name at the Register of Deeds for Surigao del Norte on December 27, 1987, the ensuing Torrens Title
covering said parcel of land being in his name per Original Certificate of Title (OCT) No. 388 of the Register of Deeds for
Surigao del Norte. 1
On April 17, 1989, the Barangay Agrarian Reform Council (BARC) for Barangay Amoslog, Municipality of Placer, Province
of Surigao del Norte, passed its Resolution No. 001 recommending the disqualification of Reynaldo Elajas as farmer-
beneficiary over the subject property on the ground that he is not a resident of Barangay Amoslog where said property is
located. The other ground for his disqualification was his failure to personally cultivate the subject landholding, he being a
public school teacher. The BARC identified one Luzviminda Velasco as the new farmer-beneficiary of the subject
landholding.
One month thereafter or on May 18, 1989, a Samahang Nayon in Amoslog, Placer, Surigao del Norte, passed its
Resolution No. 2 recommending Elajas as the new allocatee of the subject farm lot. Said Samahang Nayon resolution
asserts that membership in the Samahang Nayon of the locality is a prerequisite for being a farmer-beneficiary under
Presidential Decree No. 27, and that Luzviminda Velasco is not a member of this Samahang Nayon.
Acting upon the findings of the BARC and disregarding the later resolution of the Samahang Nayon, the Provincial
Agrarian Reform Officer (PARO) of Surigao del Norte recommended the cancellation of the Certificate of Land Transfer
(CLT) which the Department of Agrarian Reform (DAR) earlier issued in favor of Elajas.
Challenging the recommendations of the PARO, Elajas elevated the matter via a petition to the DAR Regional Director at
Cagayan de Oro City, but said Regional Director, in his Orders dated May 14, 1990 and June 19, 1990, ruled adversely
against Elajas.
Considering that the Torrens Title covering the subject farm lot is still in the name of Reynaldo Elajas (OCT No. 388 of the
Register of Deeds for Surigao del Norte), herein complainant Fe B. Mercado (then PARO for Surigao del Norte), filed the
initiatory Complaint herein against defendant Elajas before the Provincial Agrarian Reform Adjudicator (PARAD) for
Surigao del Norte, praying inter alia for the cancellation of the OCT No. 388.
Resisting the Complaint, defendant Elajas filed an Answer dated May 28, 1991, therein arguing among others that the
PARAD has no jurisdiction over the case for only regular courts may order the cancellation of a Torrens title, that being a
public school teacher is not a disqualification to being a farmer-beneficiary as long as there is personal cultivation, and
that the recommendation of the BARC is arbitrary and illegal since Luzviminda Velasco is not a member of the Samahang
Nayon of Amoslog. 2
On January 20, 1992, the PARAD promulgated a Decision finding inter alia that the BARC denied Elajas due process, and
dispositively ruling as follows:
"WHEREFORE, this case is hereby dismissed for lack of merit, and that:
1.)     Mr. Reynaldo Elajas is hereby declared the rightful owner of the land under litigation;
 2)      The Order of the Regional Director of the DAR, Region 10, dated May 14, 1990, for the cancellation of
Original Certificate of Title No. 388. Emancipation Patent No. A-037196 is hereby declared null and void ab
initio; and
3)      Luzviminda Velasco Calagos or anybody in possession and cultivation of subject land through a null
and void order is hereby enjoined to turn over immediately the possession and cultivation of subject land to
Mr. Reynaldo Elajas, the rightful owner.
THIS DECISION IS SELF-EXECUTORY.
SO ORDERED." 3
Complainant appealed the foregoing Decision to the Department of Agrarian Reform Adjudication Board (DARAB) which
docketed the appeal as DARAB Case No. 0860 (Reg. Case No. X-300).
On April 23, 1997, after the parties submitted their respective position papers, the DARAB promulgated its Decision on the
Appeal, therein finding that "the decision appealed from is supported by the required substantial evidence" and that
"therefore, there is no reason to disturb, much less reverse it". The decretal portion of said DARAB Decision reads:
"WHEREFORE, premises considered, the Decision dated January 20, 1992, is hereby AFFIRMED IN TOTO.
SO ORDERED." 4
Not satisfied with the foregoing DARAB Decision, complainant-appellant PARO filed a Motion For Reconsideration thereto
dated July 15, 1997, but there was no change of heart on the part of the DARAB as it issued a Resolution dated
September 10, 1997 that reads:
"After careful review of the allegations and arguments raised in Complainant-Appellant's Motion For
Reconsideration dated July 15, 1997, on the Decision promulgated on April 23, 1997, the Board hereby resolves to
deny the same for lack of merit. The matters raised in said Motion had already been subjected to exhaustive
discussion in the Decision sought to be reconsidered and there are no new matters which would warrant
modification much less reversal thereof.
SO ORDERED." 5
Strongly believing in its cause against defendant-appellee Elajas, then PARO Fe B. Mercado, now replaced by PARO
Romeo Pepe C. Ladao, is now before this Court of Appeals via the present "Petition For Review" with the following
assignment of errors:
"The DARAB erred:
1.      In affirming in toto the decision of the PARAD, without considering the failure of the PARAD to
appreciate the true facts of the case as stated by complainant-appellant in her complaint and memoranda;
2.      That due process may not be shown by mere submission of memoranda and documents not duly and
formally presented during the hearing;
3.      Testimonial evidence has not been presented and heard by the PARAD, any documentary evidence or
object evidence admitted are not corroborated by the latter resulting in failure or absence of evidence with
which to support the decision;
4.      In denying the motion for reconsideration filed by herein complainant-appellant with the DARAB." 6
Analogous to the basic concept of the separate three branches of the government which are independent of each other,
namely, the executive, legislative and judicial branches of the government, it is apparent from the pleadings of the parties
herein that such division likewise exists within the structure of the Department of Agrarian Reform. For here, the Barangay
Agrarian Reform Council (BARC) and the Provincial Agrarian Reform Officer or PARO perform functions that are
executive in nature, while the Provincial Agrarian Reform Adjudicator or PARAD Department of Agrarian Reform
Adjudication Board or DARAB perform functions that are quasi-judicial. It is noticeable to this Court that in this case, the
executive branch of the DAR does not see eye to eye with its judicial (or rather quasi-judicial) branch.
Culling from the PARO's assignment of errors, the main thrust thereof appears to challenge the "failure of the PARAD to
appreciate the true facts of the case" because the latter was relying on "mere submission of memoranda and documents"
without any attempt to obtain "testimonial evidence". In effect, therefore, the petitioner herein is raising factual issues in
their Petition For Review to this Court.
Basic is the rule that a reviewing forum shall give weight and accord due respect and to the factual findings of the trial
forum as the latter was in a better position to observe first hand the demeanor of witnesses and evaluate their testimonies.
At first glance, it is tempting to subscribe to the argument that this Court must refrain from disturbing the factual findings of
the DARAB, just as the DARAB refrained from disturbing the factual findings of the PARAD, because said lower fora were
in a better position to determine factual matters. However, We cannot apply the same principle to this case because said
quasi-judicial agencies do not enjoy a monopoly of expertise over the subject matter of the dispute herein, considering
that the factual conclusions of the BARC and PARO is quite the opposite of that of the PARAD and DARAB.
It is interesting to note that the BARC and PARO were able to conduct actual hearings before issuing their
recommendations, while the PARAD and DARAB were merely relying on position papers in coming out with their
decisions. Such peculiar circumstance gives this Court of Appeals ample justification for deviating from the judicial norm
of giving weight and affording due respect and to the factual conclusion of the DARAB which is apparently a mere
perfunctory affirmation of the factual conclusion of the PARAD.
In view of the foregoing, we rule and so hold that the subject Petition herein of the PARO for Surigao del Norte is
impressed with merit.
Going back to that point in time when the seeds of the present controversy made its first appearance, specifically, when
the original farmer-beneficiary (Rosario Tulang) waived his right as farmer-beneficiary over the subject landholding, it is
relevant to cite at this juncture the rule in Memorandum Circular No. 7, Series of 1979, of the Ministry of Agrarian Reform,
implementing Presidential Decree No. 27, to wit:
"Title to land acquired pursuant to this Decree or the Land Reform Program of the Government shall not be
transferable except by hereditary succession or to the Government in accordance with the provisions of this
Decree, the Code of Agrarian Reform and other existing rules and regulations."
The original farmer-beneficiary Rosario Tulang was "deemed [the owner]" of the subject rice land pursuant to Presidential
Decree No. 27. His waiver of such right to the land in question reverts the title thereon back to the government. Neither he
nor any other person acting in his behalf has any authority to appoint Elajas or to any other person for that matter to come
in as the successor and new farmer-beneficiary of the land for distribution.
After waiver and upon reversion of the property back to the government, the BARC and PARO on one hand, and the
PARAD and DARAB on the other, took divergent views on how to seek a replacement to the original farmer-beneficiary.
According to the petitioner PARO, "the BARC has to act to break the impasse" and such act is within the bounds set by
Executive Order No. 229 effective July 21, 1987 (Page 5 of the Petition), said Executive Order being the creator of the
BARC. On the other hand, the subject decision of the DARAB does not answer the question on how to select a
replacement to the waiving farmer-beneficiary. The DARAB, however, is of the view that while . . .
". . . Section 15 of RA 6657 provides that the DAR, in coordination with the BARC, shall register all agricultural
lessees, tenants and farm workers who are qualified to be beneficiaries of the Comprehensive Agrarian Reform
Program (CARP), that while it is true that the BARC is specifically tasked to identify and screen the qualifications of
the beneficiaries, however, the said provision does not vest the BARC with the power to institute any prospective
qualified beneficiaries in replacement of a beneficiary who refuses to avail of the benefits under the land transfer
program." 7
After emasculating the so-called "power" of the BARC to "institute any prospective qualified beneficiaries in replacement
of a beneficiary who refuses to avail of the benefits under the land transfer program", the tenor of the foregoing DARAB
Decision left behind a vacuum wherein the Samahang Nayon, rather than a governmental authority, is now the one
exercising the power to replace beneficiaries.
To our mind, the aforesaid Decision of the DARAB sets a dangerous precedent with taints of grave abuse of discretion,
because here, the Samahang Nayon, which is a mere private cooperative catering to private interest, usurps the public
functions of the BARC, a governmental entity existing under and by virtue of Executive Order No. 229 effective July 21,
1987.
The vulnerability of the Samahang Nayon to self-serving private interest becomes more evident in this case where the
Samahang Nayon Resolution in favor of Elajas came out a month after the promulgation of the BARC recommendation
against Elajas, implying therefore that said Samahang Nayon resolution was merely the product of an afterthought. What's
more, petitioner-appellant further alleges that only three (3) members of the Board of Directors of said Samahang Nayon
signed the Resolution in favor of Elajas, implying therefore that the action of these three (3) private persons was able to
prevail over the twelve (12) members of the BARC.
As to the pronouncement of the PARAD that the BARC deprived Elajas of due process, and the DARAB's affirmation of
the PARAD's finding of denial of due process, it appears that the PARAD arrived at such conclusion because Elajas was
not present during the hearings held by the BARC. It is not clear why Elajas was absent during said hearings: either the
BARC deliberately excluded Elajas from participating in the hearings or Elajas deliberately refused to attend the hearings.
The preponderance of evidence tilts in favor of the view that it was the choice of Elajas himself to boycott the hearings of
the BARC because he knew beforehand his slim chances of coming out victorious from the BARC proceedings.
A more telling blow to the DARAB Decision under review is the PARO's vehement denial of that pronouncement in Page 5
of said DARAB Decision that she . . .
". . . admitted in her complaint that [Elajas] is a resident of Amoslog, Placer, Surigao del Norte". According to the
PARO, ". . . the non-residency of [Elajas] was made as one of the reason for the disqualification of the latter as
recommended by the [PARO] to the DAR Regional Director after a thorough investigation was conducted by the
DAR field personnel of DAR Surigao del Norte . . .." 8
Indeed, this Court's review of the records confirms that one of the predominating reason for the PARO's unrelenting action
against Elajas was his non-residency in Barangay Amoslog. For, the BARC for Barangay Amoslog is surely parochially
zealous in favoring its own constituents in Barangay Amoslog over and against strangers from other barangays.
The other predominating reason for the PARO's persevering action against Elajas was the latter's failure to personally
cultivate the subject farmland, he being a public school teacher. Under Section 3, Paragraph (f) of Republic Act No. 6657
or the Comprehensive Agrarian Reform Law, a "farmer" is a "natural person whose primary livelihood is cultivation of land
for the production of agricultural crops, either by himself, or primarily with the assistance of his immediate farm household,
whether the land is owned by him, or by another person under leasehold or share tenancy agreement or arrangement with
the owner thereof" (emphasis supplied). The presence of the phrase "primary livelihood" in Section 3, Paragraph (f) of
Republic Act No. 6657 is a fatal blow to the defense of Elajas because the primary livelihood of a public school teacher is
teaching and not personal cultivation of land for the production of agricultural crops. It may be possible that Elajas was
personally cultivating the land but such cultivation is not his primary livelihood, unless he retires from the profession of
teaching.
In sum, it is ironic to note that in this case, the BARC and PARO in Surigao del Norte, which is the "executive" branch of
the DAR by analogy, was more effective in carrying out the adjudicatory functions of the "judicial" branch of the DAR, the
PARAD and DARAB.
WHEREFORE, the subject Decision and Resolution, dated April 23, 1997 and September 10, 1997, respectively, of the
Department of Agrarian Reform Adjudication Board, are hereby ANNULLED for being tainted with grave abuse of
discretion. Respondent-appellee Reynaldo Elajas is hereby declared DISQUALIFIED as the farmer-beneficiary under
Republic Act No. 6657 for the parcel of land covered by Original Certificate of Title No. 388 of the Register of Deeds for
Surigao del Norte. The selection of the proper farmer-beneficiary is hereby REMANDED to the Department of Agrarian
Reform for further proceedings.
SO ORDERED.

G.R. No. 171101               November 22, 2011

HACIENDA LUISITA, INCORPORATED, Petitioner,

LUISITA INDUSTRIAL PARK CORPORATION and RIZAL COMMERCIAL BANKING CORPORATION, Petitioners-in-
Intervention,
vs.
PRESIDENTIAL AGRARIAN REFORM COUNCIL; SECRETARY NASSER PANGANDAMAN OF THE DEPARTMENT
OF AGRARIAN REFORM; ALYANSA NG MGA MANGGAGAWANG BUKID NG HACIENDA LUISITA, RENE
GALANG, NOEL MALLARI, and JULIO SUNIGA1 and his SUPERVISORY GROUP OF THE HACIENDA LUISITA, INC.
and WINDSOR ANDAYA, Respondents.

RESOLUTION

VELASCO, JR., J.:

For resolution are the (1) Motion for Clarification and Partial Reconsideration dated July 21, 2011 filed by petitioner
Hacienda Luisita, Inc. (HLI); (2) Motion for Partial Reconsideration dated July 20, 2011 filed by public respondents
Presidential Agrarian Reform Council (PARC) and Department of Agrarian Reform (DAR); (3) Motion for Reconsideration
dated July 19, 2011 filed by private respondent Alyansa ng mga Manggagawang Bukid sa Hacienda Luisita (AMBALA);
(4) Motion for Reconsideration dated July 21, 2011 filed by respondent-intervenor Farmworkers Agrarian Reform
Movement, Inc. (FARM); (5) Motion for Reconsideration dated July 21, 2011 filed by private respondents Noel Mallari,
Julio Suniga, Supervisory Group of Hacienda Luisita, Inc. (Supervisory Group) and Windsor Andaya (collectively referred
to as "Mallari, et al."); and (6) Motion for Reconsideration dated July 22, 2011 filed by private respondents Rene Galang
and AMBALA.2

On July 5, 2011, this Court promulgated a Decision3 in the above-captioned case, denying the petition filed by HLI and
affirming Presidential Agrarian Reform Council (PARC) Resolution No. 2005-32-01 dated December 22, 2005 and PARC
Resolution No. 2006-34-01 dated May 3, 2006 with the modification that the original 6,296 qualified farmworker-
beneficiaries of Hacienda Luisita (FWBs) shall have the option to remain as stockholders of HLI.

In its Motion for Clarification and Partial Reconsideration dated July 21, 2011, HLI raises the following issues for Our
consideration:

IT IS NOT PROPER, EITHER IN LAW OR IN EQUITY, TO DISTRIBUTE TO THE ORIGINAL FWBs OF 6,296 THE
UNSPENT OR UNUSED BALANCE OF THE PROCEEDS OF THE SALE OF THE 500 HECTARES AND 80.51
HECTARES OF THE HLI LAND, BECAUSE:

(1) THE PROCEEDS OF THE SALE BELONG TO THE CORPORATION, HLI, AS CORPORATE CAPITAL AND
ASSETS IN SUBSTITUTION FOR THE PORTIONS OF ITS LAND ASSET WHICH WERE SOLD TO THIRD
PARTY;

(2) TO DISTRIBUTE THE CASH SALES PROCEEDS OF THE PORTIONS OF THE LAND ASSET TO THE
FWBs, WHO ARE STOCKHOLDERS OF HLI, IS TO DISSOLVE THE CORPORATION AND DISTRIBUTE THE
PROCEEDS AS LIQUIDATING DIVIDENDS WITHOUT EVEN PAYING THE CREDITORS OF THE
CORPORATION;

(3) THE DOING OF SAID ACTS WOULD VIOLATE THE STRINGENT PROVISIONS OF THE CORPORATION
CODE AND CORPORATE PRACTICE.

IT IS NOT PROPER, EITHER IN LAW OR IN EQUITY, TO RECKON THE PAYMENT OF JUST COMPENSATION FROM
NOVEMBER 21, 1989 WHEN THE PARC, THEN UNDER THE CHAIRMANSHIP OF DAR SECRETARY MIRIAM
DEFENSOR-SANTIAGO, APPROVED THE STOCK DISTRIBUTION PLAN (SDP) PROPOSED BY TADECO/HLI,
BECAUSE:

(1) THAT PARC RESOLUTION NO. 89-12-2 DATED NOVEMBER 21, 1989 WAS NOT THE "ACTUAL TAKING"
OF THE TADECO’s/HLI’s AGRICULTURAL LAND;

(2) THE RECALL OR REVOCATION UNDER RESOLUTION NO. 2005-32-01 OF THAT SDP BY THE NEW
PARC UNDER THE CHAIRMANSHIP OF DAR SECRETARY NASSER PANGANDAMAN ON DECEMBER 22,
2005 OR 16 YEARS EARLIER WHEN THE SDP WAS APPROVED DID NOT RESULT IN "ACTUAL TAKING"
ON NOVEMBER 21, 1989;

(3) TO PAY THE JUST COMPENSATION AS OF NOVEMBER 21, 1989 OR 22 YEARS BACK WOULD BE
ARBITRARY, UNJUST, AND OPPRESSIVE, CONSIDERING THE IMPROVEMENTS, EXPENSES IN THE
MAINTENANCE AND PRESERVATION OF THE LAND, AND RISE IN LAND PRICES OR VALUE OF THE
PROPERTY.

On the other hand, PARC and DAR, through the Office of the Solicitor General (OSG), raise the following issues in their
Motion for Partial Reconsideration dated July 20, 2011:

THE DOCTRINE OF OPERATIVE FACT DOES NOT APPLY TO THIS CASE FOR THE FOLLOWING REASONS:

THERE IS NO LAW OR RULE WHICH HAS BEEN INVALIDATED ON THE GROUND OF UNCONSTITUTIONALITY;
AND

II
THIS DOCTRINE IS A RULE OF EQUITY WHICH MAY BE APPLIED ONLY IN THE ABSENCE OF A LAW. IN THIS
CASE, THERE IS A POSITIVE LAW WHICH MANDATES THE DISTRIBUTION OF THE LAND AS A RESULT OF THE
REVOCATION OF THE STOCK DISTRIBUTION PLAN (SDP).

For its part, AMBALA poses the following issues in its Motion for Reconsideration dated July 19, 2011:

THE MAJORITY OF THE MEMBERS OF THE HONORABLE COURT, WITH DUE RESPECT, ERRED IN HOLDING
THAT SECTION 31 OF REPUBLIC ACT 6657 (RA 6657) IS CONSTITUTIONAL.

II

THE MAJORITY OF THE MEMBERS OF THE HONORABLE COURT, WITH DUE RESPECT, ERRED IN HOLDING
THAT ONLY THE [PARC’S] APPROVAL OF HLI’s PROPOSAL FOR STOCK DISTRIBUTION UNDER CARP AND THE
[SDP] WERE REVOKED AND NOT THE STOCK DISTRIBUTION OPTION AGREEMENT (SDOA).

III

THE MAJORITY OF THE MEMBERS OF THE HONORABLE COURT, WITH DUE RESPECT, ERRED IN APPLYING
THE DOCTRINE OF OPERATIVE FACTS AND IN MAKING THE [FWBs] CHOOSE TO OPT FOR ACTUAL LAND
DISTRIBUTION OR TO REMAIN AS STOCKHOLDERS OF [HLI].

IV

THE MAJORITY OF THE MEMBERS OF THE HONORABLE COURT, WITH DUE RESPECT, ERRED IN HOLDING
THAT IMPROVING THE ECONOMIC STATUS OF FWBs IS NOT AMONG THE LEGAL OBLIGATIONS OF HLI UNDER
THE SDP AND AN IMPERATIVE IMPOSITION BY [RA 6657] AND DEPARTMENT OF AGRARIAN REFORM
ADMINISTRATIVE ORDER NO. 10 (DAO 10).

THE HONORABLE COURT, WITH DUE RESPECT, ERRED IN HOLDING THAT THE CONVERSION OF THE
AGRICULTURAL LANDS DID NOT VIOLATE THE CONDITIONS OF RA 6657 AND DAO 10.

VI

THE HONORABLE COURT, WITH DUE RESPECT, ERRED IN HOLDING THAT PETITIONER IS ENTITLED TO
PAYMENT OF JUST COMPENSATION. SHOULD THE HONORABLE COURT AFFIRM THE ENTITLEMENT OF THE
PETITIONER TO JUST COMPENSATION, THE SAME SHOULD BE PEGGED TO FORTY THOUSAND PESOS (PhP
40,000.00) PER HECTARE.

VII

THE HONORABLE COURT, WITH DUE RESPECT, ERRED IN HOLDING THAT LUISITA INDUSTRIAL PARK CORP.
(LIPCO) AND RIZAL COMMERCIAL BANKING CORPORATION (RCBC) ARE INNOCENT PURCHASERS FOR VALUE.

In its Motion for Reconsideration dated July 21, 2011, FARM similarly puts forth the following issues:

THE HONORABLE SUPREME COURT SHOULD HAVE STRUCK DOWN SECTION 31 OF [RA 6657] FOR BEING
UNCONSTITUTIONAL. THE CONSTITUTIONALITY ISSUE THAT WAS RAISED BY THE RESPONDENTS-
INTERVENORS IS THE LIS MOTA OF THE CASE.

II
THE HONORABLE SUPREME COURT SHOULD NOT HAVE APPLIED THE DOCTRINE OF "OPERATIVE FACT" TO
THE CASE. THE OPTION GIVEN TO THE FARMERS TO REMAIN AS STOCKHOLDERS OF HACIENDA LUISITA IS
EQUIVALENT TO AN OPTION FOR HACIENDA LUISITA TO RETAIN LAND IN DIRECT VIOLATION OF THE
COMPREHENSIVE AGRARIAN REFORM LAW. THE DECEPTIVE STOCK DISTRIBUTION OPTION / STOCK
DISTRIBUTION PLAN CANNOT JUSTIFY SUCH RESULT, ESPECIALLY AFTER THE SUPREME COURT HAS
AFFIRMED ITS REVOCATION.

III

THE HONORABLE SUPREME COURT SHOULD NOT HAVE CONSIDERED [LIPCO] AND [RCBC] AS INNOCENT
PURCHASERS FOR VALUE IN THE INSTANT CASE.

Mallari, et al., on the other hand, advance the following grounds in support of their Motion for Reconsideration dated July
21, 2011:

(1) THE HOMELOTS REQUIRED TO BE DISTRIBUTED HAVE ALL BEEN DISTRIBUTED PURSUANT TO THE
MEMORANDUM OF AGREEMENT. WHAT REMAINS MERELY IS THE RELEASE OF TITLE FROM THE
REGISTER OF DEEDS.

(2) THERE HAS BEEN NO DILUTION OF SHARES. CORPORATE RECORDS WOULD SHOW THAT IF EVER
NOT ALL OF THE 18,804.32 SHARES WERE GIVEN TO THE ACTUAL ORIGINAL FARMWORKER
BENEFICIARY, THE RECIPIENT OF THE DIFFERENCE IS THE NEXT OF KIN OR CHILDREN OF SAID
ORIGINAL [FWBs]. HENCE, WE RESPECTFULLY SUBMIT THAT SINCE THE SHARES WERE GIVEN TO THE
SAME "FAMILY BENEFICIARY", THIS SHOULD BE DEEMED AS SUBSTANTIAL COMPLIANCE WITH THE
PROVISIONS OF SECTION 4 OF DAO 10.

(3) THERE HAS BEEN NO VIOLATION OF THE 3-MONTH PERIOD TO IMPLEMENT THE [SDP] AS
PROVIDED FOR BY SECTION 11 OF DAO 10 AS THIS PROVISION MUST BE READ IN LIGHT OF SECTION
10 OF EXECUTIVE ORDER NO. 229, THE PERTINENT PORTION OF WHICH READS, "THE APPROVAL BY
THE PARC OF A PLAN FOR SUCH STOCK DISTRIBUTION, AND ITS INITIAL IMPLEMENTATION, SHALL BE
DEEMED COMPLIANCE WITH THE LAND DISTRIBUTION REQUIREMENT OF THE CARP."

(4) THE VALUATION OF THE LAND CANNOT BE BASED AS OF NOVEMBER 21, 1989, THE DATE OF
APPROVAL OF THE STOCK DISTRIBUTION OPTION. INSTEAD, WE RESPECTFULLY SUBMIT THAT THE
"TIME OF TAKING" FOR VALUATION PURPOSES IS A FACTUAL ISSUE BEST LEFT FOR THE TRIAL
COURTS TO DECIDE.

(5) TO THOSE WHO WILL CHOOSE LAND, THEY MUST RETURN WHAT WAS GIVEN TO THEM UNDER THE
SDP. IT WOULD BE UNFAIR IF THEY ARE ALLOWED TO GET THE LAND AND AT THE SAME TIME HOLD
ON TO THE BENEFITS THEY RECEIVED PURSUANT TO THE SDP IN THE SAME WAY AS THOSE WHO
WILL CHOOSE TO STAY WITH THE SDO.

Lastly, Rene Galang and AMBALA, through the Public Interest Law Center (PILC), submit the following grounds in
support of their Motion for Reconsideration dated July 22, 2011:

THE HONORABLE COURT, WITH DUE RESPECT, GRAVELY ERRED IN ORDERING THE HOLDING OF A VOTING
OPTION INSTEAD OF TOTALLY REDISTRIBUTING THE SUBJECT LANDS TO [FWBs] in [HLI].

A. THE HOLDING OF A VOTING OPTION HAS NO LEGAL BASIS. THE REVOCATION OF THE [SDP]
CARRIES WITH IT THE REVOCATION OF THE [SDOA].

B. GIVING THE [FWBs] THE OPTION TO REMAIN AS STOCKHOLDERS OF HLI WITHOUT MAKING THE
NECESSARY CHANGES IN THE CORPORATE STRUCTURE WOULD ONLY SUBJECT THEM TO FURTHER
MANIPULATION AND HARDSHIP.

C. OTHER VIOLATIONS COMMITTED BY HLI UNDER THE [SDOA] AND PERTINENT LAWS JUSTIFY TOTAL
LAND REDISTRIBUTION OF HACIENDA LUISITA.
 II

THE HONORABLE COURT, WITH DUE RESPECT, GRAVELY ERRED IN HOLDING THAT THE [RCBC] AND [LIPCO]
ARE INNOCENT PURCHASERS FOR VALUE OF THE 300-HECTARE PROPERTY IN HACIENDA LUISITA THAT WAS
SOLD TO THEM PRIOR TO THE INCEPTION OF THE PRESENT CONTROVERSY.

Ultimately, the issues for Our consideration are the following: (1) applicability of the operative fact doctrine; (2)
constitutionality of Sec. 31 of RA 6657 or the Comprehensive Agrarian Reform Law of 1988; (3) coverage of compulsory
acquisition; (4) just compensation; (5) sale to third parties; (6) the violations of HLI; and (7) control over agricultural lands.

We shall discuss these issues accordingly.

I. Applicability of the Operative Fact Doctrine

In their motion for partial reconsideration, DAR and PARC argue that the doctrine of operative fact does not apply to the
instant case since: (1) there is no law or rule which has been invalidated on the ground of unconstitutionality;4 (2) the
doctrine of operative fact is a rule of equity which may be applied only in the absence of a law, and in this case, they
maintain that there is a positive law which mandates the distribution of the land as a result of the revocation of the stock
distribution plan (SDP).5

Echoing the stance of DAR and PARC, AMBALA submits that the operative fact doctrine should only be made to apply in
the extreme case in which equity demands it, which allegedly is not in the instant case.6 It further argues that there would
be no undue harshness or injury to HLI in case lands are actually distributed to the farmworkers, and that the decision
which orders the farmworkers to choose whether to remain as stockholders of HLI or to opt for land distribution would
result in inequity and prejudice to the farmworkers.7 The foregoing views are also similarly shared by Rene Galang and
AMBALA, through the PILC.8 In addition, FARM posits that the option given to the FWBs is equivalent to an option for HLI
to retain land in direct violation of RA 6657.9

(a) Operative Fact Doctrine Not Limited to

Invalid or Unconstitutional Laws

Contrary to the stance of respondents, the operative fact doctrine does not only apply to laws subsequently declared
unconstitutional or unlawful, as it also applies to executive acts subsequently declared as invalid. As We have discussed
in Our July 5, 2011 Decision:

That the operative fact doctrine squarely applies to executive acts––in this case, the approval by PARC of the HLI
proposal for stock distribution––is well-settled in our jurisprudence. In Chavez v. National Housing Authority, We held:

Petitioner postulates that the "operative fact" doctrine is inapplicable to the present case because it is an equitable
doctrine which could not be used to countenance an inequitable result that is contrary to its proper office.

On the other hand, the petitioner Solicitor General argues that the existence of the various agreements implementing the
SMDRP is an operative fact that can no longer be disturbed or simply ignored, citing Rieta v. People of the Philippines.

The argument of the Solicitor General is meritorious.

The "operative fact" doctrine is embodied in De Agbayani v. Court of Appeals, wherein it is stated that a legislative or
executive act, prior to its being declared as unconstitutional by the courts, is valid and must be complied with, thus:

x x x           x x x          x x x

This doctrine was reiterated in the more recent case of City of Makati v. Civil Service Commission, wherein we ruled that:

Moreover, we certainly cannot nullify the City Government's order of suspension, as we have no reason to do so, much
less retroactively apply such nullification to deprive private respondent of a compelling and valid reason for not filing the
leave application. For as we have held, a void act though in law a mere scrap of paper nonetheless confers legitimacy
upon past acts or omissions done in reliance thereof. Consequently, the existence of a statute or executive order prior to
its being adjudged void is an operative fact to which legal consequences are attached. It would indeed be ghastly unfair to
prevent private respondent from relying upon the order of suspension in lieu of a formal leave application.

The applicability of the operative fact doctrine to executive acts was further explicated by this Court in Rieta v. People,
thus:

Petitioner contends that his arrest by virtue of Arrest Search and Seizure Order (ASSO) No. 4754 was invalid, as the law
upon which it was predicated — General Order No. 60, issued by then President Ferdinand E. Marcos — was
subsequently declared by the Court, in Tañada v. Tuvera, 33 to have no force and effect. Thus, he asserts, any evidence
obtained pursuant thereto is inadmissible in evidence.

We do not agree. In Tañada, the Court addressed the possible effects of its declaration of the invalidity of various
presidential issuances. Discussing therein how such a declaration might affect acts done on a presumption of their
validity, the Court said:

". . .. In similar situations in the past this Court had taken the pragmatic and realistic course set forth in Chicot County
Drainage District vs. Baxter Bank to wit:

‘The courts below have proceeded on the theory that the Act of Congress, having been found to be unconstitutional, was
not a law; that it was inoperative, conferring no rights and imposing no duties, and hence affording no basis for the
challenged decree. . . . It is quite clear, however, that such broad statements as to the effect of a determination of
unconstitutionality must be taken with qualifications. The actual existence of a statute, prior to [the determination of its
invalidity], is an operative fact and may have consequences which cannot justly be ignored. The past cannot always be
erased by a new judicial declaration. The effect of the subsequent ruling as to invalidity may have to be considered in
various aspects — with respect to particular conduct, private and official. Questions of rights claimed to have become
vested, of status, of prior determinations deemed to have finality and acted upon accordingly, of public policy in the light of
the nature both of the statute and of its previous application, demand examination. These questions are among the most
difficult of those which have engaged the attention of courts, state and federal, and it is manifest from numerous decisions
that an all-inclusive statement of a principle of absolute retroactive invalidity cannot be justified.’

x x x           x x x          x x x

"Similarly, the implementation/ enforcement of presidential decrees prior to their publication in the Official Gazette is ‘an
operative fact which may have consequences which cannot be justly ignored. The past cannot always be erased by a new
judicial declaration . . . that an all-inclusive statement of a principle of absolute retroactive invalidity cannot be justified.’"

The Chicot doctrine cited in Tañada advocates that, prior to the nullification of a statute, there is an imperative necessity
of taking into account its actual existence as an operative fact negating the acceptance of "a principle of absolute
retroactive invalidity." Whatever was done while the legislative or the executive act was in operation should be duly
recognized and presumed to be valid in all respects. The ASSO that was issued in 1979 under General Order No. 60 —
long before our Decision in Tañada and the arrest of petitioner — is an operative fact that can no longer be disturbed or
simply ignored. (Citations omitted; emphasis in the original.)

Bearing in mind that PARC Resolution No. 89-12-210––an executive act––was declared invalid in the instant case, the
operative fact doctrine is clearly applicable.

Nonetheless, the minority is of the persistent view that the applicability of the operative fact doctrine should be limited to
statutes and rules and regulations issued by the executive department that are accorded the same status as that of a
statute or those which are quasi-legislative in nature. Thus, the minority concludes that the phrase "executive act" used in
the case of De Agbayani v. Philippine National Bank11 refers only to acts, orders, and rules and regulations that have the
force and effect of law. The minority also made mention of the Concurring Opinion of Justice Enrique Fernando in
Municipality of Malabang v. Benito,12 where it was supposedly made explicit that the operative fact doctrine applies to
executive acts, which are ultimately quasi-legislative in nature.

We disagree. For one, neither the De Agbayani case nor the Municipality of Malabang case elaborates what "executive
act" mean. Moreover, while orders, rules and regulations issued by the President or the executive branch have fixed
definitions and meaning in the Administrative Code and jurisprudence, the phrase "executive act" does not have such
specific definition under existing laws. It should be noted that in the cases cited by the minority, nowhere can it be found
that the term "executive act" is confined to the foregoing. Contrarily, the term "executive act" is broad enough to
encompass decisions of administrative bodies and agencies under the executive department which are subsequently
revoked by the agency in question or nullified by the Court.

A case in point is the concurrent appointment of Magdangal B. Elma (Elma) as Chairman of the Presidential Commission
on Good Government (PCGG) and as Chief Presidential Legal Counsel (CPLC) which was declared unconstitutional by
this Court in Public Interest Center, Inc. v. Elma.13 In said case, this Court ruled that the concurrent appointment of Elma
to these offices is in violation of Section 7, par. 2, Article IX-B of the 1987 Constitution, since these are incompatible
offices. Notably, the appointment of Elma as Chairman of the PCGG and as CPLC is, without a question, an executive
act. Prior to the declaration of unconstitutionality of the said executive act, certain acts or transactions were made in good
faith and in reliance of the appointment of Elma which cannot just be set aside or invalidated by its subsequent
invalidation.

In Tan v. Barrios,14 this Court, in applying the operative fact doctrine, held that despite the invalidity of the jurisdiction of
the military courts over civilians, certain operative facts must be acknowledged to have existed so as not to trample upon
the rights of the accused therein. Relevant thereto, in Olaguer v. Military Commission No. 34,15 it was ruled that "military
tribunals pertain to the Executive Department of the Government and are simply instrumentalities of the executive power,
provided by the legislature for the President as Commander-in-Chief to aid him in properly commanding the army and
navy and enforcing discipline therein, and utilized under his orders or those of his authorized military representatives."16

Evidently, the operative fact doctrine is not confined to statutes and rules and regulations issued by the executive
department that are accorded the same status as that of a statute or those which are quasi-legislative in nature.

Even assuming that De Agbayani initially applied the operative fact doctrine only to executive issuances like orders and
rules and regulations, said principle can nonetheless be applied, by analogy, to decisions made by the President or the
agencies under the executive department. This doctrine, in the interest of justice and equity, can be applied liberally and
in a broad sense to encompass said decisions of the executive branch. In keeping with the demands of equity, the Court
can apply the operative fact doctrine to acts and consequences that resulted from the reliance not only on a law or
executive act which is quasi-legislative in nature but also on decisions or orders of the executive branch which were later
nullified. This Court is not unmindful that such acts and consequences must be recognized in the higher interest of justice,
equity and fairness.

Significantly, a decision made by the President or the administrative agencies has to be complied with because it has the
force and effect of law, springing from the powers of the President under the Constitution and existing laws. Prior to the
nullification or recall of said decision, it may have produced acts and consequences in conformity to and in reliance of said
decision, which must be respected. It is on this score that the operative fact doctrine should be applied to acts and
consequences that resulted from the implementation of the PARC Resolution approving the SDP of HLI.

More importantly, respondents, and even the minority, failed to clearly explain how the option to remain in HLI granted to
individual farmers would result in inequity and prejudice. We can only surmise that respondents misinterpreted the option
as a referendum where all the FWBs will be bound by a majority vote favoring the retention of all the 6,296 FWBs as HLI
stockholders. Respondents are definitely mistaken. The fallo of Our July 5, 2011 Decision is unequivocal that only those
FWBs who signified their desire to remain as HLI stockholders are entitled to 18,804.32 shares each, while those who
opted not to remain as HLI stockholders will be given land by DAR. Thus, referendum was not required but only individual
options were granted to each FWB whether or not they will remain in HLI.

The application of the operative fact doctrine to the FWBs is not iniquitous and prejudicial to their interests but is actually
beneficial and fair to them. First, they are granted the right to remain in HLI as stockholders and they acquired said shares
without paying their value to the corporation. On the other hand, the qualified FWBs are required to pay the value of the
land to the Land Bank of the Philippines (LBP) if land is awarded to them by DAR pursuant to RA 6657. If the qualified
FWBs really want agricultural land, then they can simply say no to the option. And second, if the operative fact doctrine is
not applied to them, then the FWBs will be required to return to HLI the 3% production share, the 3% share in the
proceeds of the sale of the 500-hectare converted land, and the 80.51-hectare Subic-Clark-Tarlac Expressway (SCTEX)
lot, the homelots and other benefits received by the FWBs from HLI. With the application of the operative fact doctrine,
said benefits, homelots and the 3% production share and 3% share from the sale of the 500-hectare and SCTEX lots shall
be respected with no obligation to refund or return them. The receipt of these things is an operative fact "that can no
longer be disturbed or simply ignored."

(b) The Operative Fact Doctrine as Recourse in Equity

As mentioned above, respondents contend that the operative fact doctrine is a rule of equity which may be applied only in
the absence of a law, and that in the instant case, there is a positive law which mandates the distribution of the land as a
result of the revocation of the SDP.

Undeniably, the operative fact doctrine is a rule of equity.17 As a complement of legal jurisdiction, equity "seeks to reach
and complete justice where courts of law, through the inflexibility of their rules and want of power to adapt their judgments
to the special circumstances of cases, are incompetent to do so. Equity regards the spirit and not the letter, the intent and
not the form, the substance rather than the circumstance, as it is variously expressed by different courts."18 Remarkably, it
is applied only in the absence of statutory law and never in contravention of said law.19

In the instant case, respondents argue that the operative fact doctrine should not be applied since there is a positive law,
particularly, Sec. 31 of RA 6657, which directs the distribution of the land as a result of the revocation of the SDP.
Pertinently, the last paragraph of Sec. 31 of RA 6657 states:

If within two (2) years from the approval of this Act, the land or stock transfer envisioned above is not made or realized or
the plan for such stock distribution approved by the PARC within the same period, the agricultural land of the corporate
owners or corporation shall be subject to the compulsory coverage of this Act. (Emphasis supplied.)

Markedly, the use of the word "or" under the last paragraph of Sec. 31 of RA 6657 connotes that the law gives the
corporate landowner an "option" to avail of the stock distribution option or to have the SDP approved within two (2) years
from the approval of RA 6657. This interpretation is consistent with the well-established principle in statutory construction
that "[t]he word or is a disjunctive term signifying disassociation and independence of one thing from the other things
enumerated; it should, as a rule, be construed in the sense in which it ordinarily implies, as a disjunctive word."20 In PCI
Leasing and Finance, Inc. v. Giraffe-X Creative Imaging, Inc.,21 this Court held:

Evidently, the letter did not make a demand for the payment of the P8,248,657.47 AND the return of the equipment; only
either one of the two was required. The demand letter was prepared and signed by Atty. Florecita R. Gonzales,
presumably petitioner’s counsel. As such, the use of "or" instead of "and" in the letter could hardly be treated as a simple
typographical error, bearing in mind the nature of the demand, the amount involved, and the fact that it was made by a
lawyer. Certainly Atty. Gonzales would have known that a world of difference exists between "and" and "or" in the manner
that the word was employed in the letter.

A rule in statutory construction is that the word "or" is a disjunctive term signifying dissociation and independence of one
thing from other things enumerated unless the context requires a different interpretation.22

In its elementary sense, "or", as used in a statute, is a disjunctive article indicating an alternative. It often
connects a series of words or propositions indicating a choice of either. When "or" is used, the various members
of the enumeration are to be taken separately.23

The word "or" is a disjunctive term signifying disassociation and independence of one thing from each of the other things
enumerated.24 (Emphasis in the original.)

Given that HLI secured approval of its SDP in November 1989, well within the two-year period reckoned from June 1988
when RA 6657 took effect, then HLI did not violate the last paragraph of Sec. 31 of RA 6657. Pertinently, said provision
does not bar Us from applying the operative fact doctrine.

Besides, it should be recognized that this Court, in its July 5, 2011 Decision, affirmed the revocation of Resolution No. 89-
12-2 and ruled for the compulsory coverage of the agricultural lands of Hacienda Luisita in view of HLI’s violation of the
SDP and DAO 10. By applying the operative fact doctrine, this Court merely gave the qualified FWBs the option to remain
as stockholders of HLI and ruled that they will retain the homelots and other benefits which they received from HLI by
virtue of the SDP.

It bears stressing that the application of the operative fact doctrine by the Court in its July 5, 2011 Decision is favorable to
the FWBs because not only were the FWBs allowed to retain the benefits and homelots they received under the stock
distribution scheme, they were also given the option to choose for themselves whether they want to remain as
stockholders of HLI or not. This is in recognition of the fact that despite the claims of certain farmer groups that they
represent the qualified FWBs in Hacienda Luisita, none of them can show that they are duly authorized to speak on their
behalf. As We have mentioned, "To date, such authorization document, which would logically include a list of the names
of the authorizing FWBs, has yet to be submitted to be part of the records."
II. Constitutionality of Sec. 31, RA 6657

FARM insists that the issue of constitutionality of Sec. 31 of RA 6657 is the lis mota of the case, raised at the earliest
opportunity, and not to be considered as moot and academic.25

This contention is unmeritorious. As We have succinctly discussed in Our July 5, 2011 Decision:

While there is indeed an actual case or controversy, intervenor FARM, composed of a small minority of 27 farmers, has
yet to explain its failure to challenge the constitutionality of Sec. 3l of RA 6657, since as early as November 21, l989 when
PARC approved the SDP of Hacienda Luisita or at least within a reasonable time thereafter and why its members
received benefits from the SDP without so much of a protest. It was only on December 4, 2003 or 14 years after approval
of the SDP via PARC Resolution No. 89-12-2 dated November 21, 1989 that said plan and approving resolution were
sought to be revoked, but not, to stress, by FARM or any of its members, but by petitioner AMBALA. Furthermore, the
AMBALA petition did NOT question the constitutionality of Sec. 31 of RA 6657, but concentrated on the purported flaws
and gaps in the subsequent implementation of the SDP. Even the public respondents, as represented by the Solicitor
General, did not question the constitutionality of the provision. On the other hand, FARM, whose 27 members formerly
belonged to AMBALA, raised the constitutionality of Sec. 31 only on May 3, 2007 when it filed its Supplemental Comment
with the Court. Thus, it took FARM some eighteen (18) years from November 21, 1989 before it challenged the
constitutionality of Sec. 31 of RA 6657 which is quite too late in the day. The FARM members slept on their rights and
even accepted benefits from the SDP with nary a complaint on the alleged unconstitutionality of Sec. 31 upon which the
benefits were derived. The Court cannot now be goaded into resolving a constitutional issue that FARM failed to assail
after the lapse of a long period of time and the occurrence of numerous events and activities which resulted from the
application of an alleged unconstitutional legal provision.

It has been emphasized in a number of cases that the question of constitutionality will not be passed upon by the Court
unless it is properly raised and presented in an appropriate case at the first opportunity. FARM is, therefore, remiss in
belatedly questioning the constitutionality of Sec. 31 of RA 6657. The second requirement that the constitutional question
should be raised at the earliest possible opportunity is clearly wanting.

The last but the most important requisite that the constitutional issue must be the very lis mota of the case does not
likewise obtain. The lis mota aspect is not present, the constitutional issue tendered not being critical to the resolution of
the case. The unyielding rule has been to avoid, whenever plausible, an issue assailing the constitutionality of a statute or
governmental act. If some other grounds exist by which judgment can be made without touching the constitutionality of a
law, such recourse is favored. Garcia v. Executive Secretary explains why:

Lis Mota — the fourth requirement to satisfy before this Court will undertake judicial review — means that the Court will
not pass upon a question of unconstitutionality, although properly presented, if the case can be disposed of on some other
ground, such as the application of the statute or the general law. The petitioner must be able to show that the case cannot
be legally resolved unless the constitutional question raised is determined. This requirement is based on the rule that
every law has in its favor the presumption of constitutionality; to justify its nullification, there must be a clear and
unequivocal breach of the Constitution, and not one that is doubtful, speculative, or argumentative.

The lis mota in this case, proceeding from the basic positions originally taken by AMBALA (to which the FARM members
previously belonged) and the Supervisory Group, is the alleged non-compliance by HLI with the conditions of the SDP to
support a plea for its revocation. And before the Court, the lis mota is whether or not PARC acted in grave abuse of
discretion when it ordered the recall of the SDP for such non-compliance and the fact that the SDP, as couched and
implemented, offends certain constitutional and statutory provisions. To be sure, any of these key issues may be resolved
without plunging into the constitutionality of Sec. 31 of RA 6657. Moreover, looking deeply into the underlying petitions of
AMBALA, et al., it is not the said section per se that is invalid, but rather it is the alleged application of the said provision in
the SDP that is flawed.

It may be well to note at this juncture that Sec. 5 of RA 9700, amending Sec. 7 of RA 6657, has all but superseded Sec.
31 of RA 6657 vis-à-vis the stock distribution component of said Sec. 31. In its pertinent part, Sec. 5 of RA 9700 provides:
"[T]hat after June 30, 2009, the modes of acquisition shall be limited to voluntary offer to sell and compulsory
acquisition." Thus, for all intents and purposes, the stock distribution scheme under Sec. 31 of RA 6657 is no longer an
available option under existing law. The question of whether or not it is unconstitutional should be a moot issue. (Citations
omitted; emphasis in the original.)

Based on the foregoing disquisitions, We maintain that this Court is NOT compelled to rule on the constitutionality of Sec.
31 of RA 6657. In this regard, We clarify that this Court, in its July 5, 2011 Decision, made no ruling in favor of the
constitutionality of Sec. 31 of RA 6657. There was, however, a determination of the existence of an apparent grave
violation of the Constitution that may justify the resolution of the issue of constitutionality, to which this Court ruled in the
negative. Having clarified this matter, all other points raised by both FARM and AMBALA concerning the constitutionality
of RA 6657 deserve scant consideration.

III. Coverage of Compulsory Acquisition

FARM argues that this Court ignored certain material facts when it limited the maximum area to be covered to 4,915.75
hectares, whereas the area that should, at the least, be covered is 6,443 hectares,26 which is the agricultural land
allegedly covered by RA 6657 and previously held by Tarlac Development Corporation (Tadeco).27

We cannot subscribe to this view. Since what is put in issue before the Court is the propriety of the revocation of the SDP,
which only involves 4,915.75 has. of agricultural land and not 6,443 has., then We are constrained to rule only as regards
the 4,915.75 has. of agricultural land.

Moreover, as admitted by FARM itself, this issue was raised for the first time by FARM in its Memorandum dated
September 24, 2010 filed before this Court.28 In this regard, it should be noted that "[a]s a legal recourse, the special civil
action of certiorari is a limited form of review."29 The certiorari jurisdiction of this Court is narrow in scope as it is restricted
to resolving errors of jurisdiction and grave abuse of discretion, and not errors of judgment.30 To allow additional issues at
this stage of the proceedings is violative of fair play, justice and due process.31

Nonetheless, it should be taken into account that this should not prevent the DAR, under its mandate under the agrarian
reform law, from subsequently subjecting to agrarian reform other agricultural lands originally held by Tadeco that were
allegedly not transferred to HLI but were supposedly covered by RA 6657.

DAR, however, contends that the declaration of the area32 to be awarded to each FWB is too restrictive. It stresses that in
agricultural landholdings like Hacienda Luisita, there are roads, irrigation canals, and other portions of the land that are
considered commonly-owned by farmworkers, and this may necessarily result in the decrease of the area size that may
be awarded per FWB.33 DAR also argues that the July 5, 2011 Decision of this Court does not give it any leeway in
adjusting the area that may be awarded per FWB in case the number of actual qualified FWBs decreases.34

The argument is meritorious. In order to ensure the proper distribution of the agricultural lands of Hacienda Luisita per
qualified FWB, and considering that matters involving strictly the administrative implementation and enforcement of
agrarian reform laws are within the jurisdiction of the DAR,35 it is the latter which shall determine the area with which each
qualified FWB will be awarded.

(a) Conversion of Agricultural Lands

AMBALA insists that the conversion of the agricultural lands violated the conditions of RA 6657 and DAO 10, stating that
"keeping the land intact and unfragmented is one of the essential conditions of [the] SD[P], RA 6657 and DAO 10."36 It
asserts that "this provision or conditionality is not mere decoration and is intended to ensure that the farmers can continue
with the tillage of the soil especially since it is the only occupation that majority of them knows."37

We disagree. As We amply discussed in Our July 5, 2011 Decision:

Contrary to the almost parallel stance of the respondents, keeping Hacienda Luisita unfragmented is also not among the
imperative impositions by the SDP, RA 6657, and DAO 10.

The Terminal Report states that the proposed distribution plan submitted in 1989 to the PARC effectively assured the
intended stock beneficiaries that the physical integrity of the farm shall remain inviolate. Accordingly, the Terminal Report
and the PARC-assailed resolution would take HLI to task for securing approval of the conversion to non-agricultural uses
of 500 hectares of the hacienda. In not too many words, the Report and the resolution view the conversion as an
infringement of Sec. 5(a) of DAO 10 which reads: "a. that the continued operation of the corporation with its agricultural
land intact and unfragmented is viable with potential for growth and increased profitability."

The PARC is wrong.

In the first place, Sec. 5(a)––just like the succeeding Sec. 5(b) of DAO 10 on increased income and greater benefits to
qualified beneficiaries––is but one of the stated criteria to guide PARC in deciding on whether or not to accept an SDP.
Said Sec. 5(a) does not exact from the corporate landowner-applicant the undertaking to keep the farm intact and
unfragmented ad infinitum. And there is logic to HLI’s stated observation that the key phrase in the provision of Sec. 5(a)
is "viability of corporate operations": "[w]hat is thus required is not the agricultural land remaining intact x x x but the
viability of the corporate operations with its agricultural land being intact and unfragmented. Corporate operation may be
viable even if the corporate agricultural land does not remain intact or [un]fragmented."38

It is, of course, anti-climactic to mention that DAR viewed the conversion as not violative of any issuance, let alone
undermining the viability of Hacienda Luisita’s operation, as the DAR Secretary approved the land conversion applied for
and its disposition via his Conversion Order dated August 14, 1996 pursuant to Sec. 65 of RA 6657 which reads:

Sec. 65. Conversion of Lands.¾After the lapse of five years from its award when the land ceases to be economically
feasible and sound for agricultural purposes, or the locality has become urbanized and the land will have a greater
economic value for residential, commercial or industrial purposes, the DAR upon application of the beneficiary or
landowner with due notice to the affected parties, and subject to existing laws, may authorize the x x x conversion of the
land and its dispositions. x x x

Moreover, it is worth noting that the application for conversion had the backing of 5,000 or so FWBs, including
respondents Rene Galang, and Jose Julio Suniga, then leaders of the AMBALA and the Supervisory Group, respectively,
as evidenced by the Manifesto of Support they signed and which was submitted to the DAR.39 If at all, this means that
AMBALA should be estopped from questioning the conversion of a portion of Hacienda Luisita, which its leader has fully
supported.

(b) LIPCO and RCBC as Innocent Purchasers for Value

The AMBALA, Rene Galang and the FARM are in accord that Rizal Commercial Banking Corporation (RCBC) and Luisita
Industrial Park Corporation (LIPCO) are not innocent purchasers for value. The AMBALA, in particular, argues that
LIPCO, being a wholly-owned subsidiary of HLI, is conclusively presumed to have knowledge of the agrarian dispute on
the subject land and could not feign ignorance of this fact, especially since they have the same directors and
stockholders.40 This is seconded by Rene Galang and AMBALA, through the PILC, which intimate that a look at the
General Information Sheets of the companies involved in the transfers of the 300-hectare portion of Hacienda Luisita,
specifically, Centennary Holdings, Inc. (Centennary), LIPCO and RCBC, would readily reveal that their directors are
interlocked and connected to Tadeco and HLI.41 Rene Galang and AMBALA, through the PILC, also allege that "with the
clear-cut involvement of the leadership of all the corporations concerned, LIPCO and RCBC cannot feign ignorance that
the parcels of land they bought are under the coverage of the comprehensive agrarian reform program [CARP] and that
the conditions of the respective sales are imbued with public interest where normal property relations in the Civil Law
sense do not apply."42

Avowing that the land subject of conversion still remains undeveloped, Rene Galang and AMBALA, through the PILC,
further insist that the condition that "[t]he development of the land should be completed within the period of five [5] years
from the issuance of this Order" was not complied with. AMBALA also argues that since RCBC and LIPCO merely
stepped into the shoes of HLI, then they must comply with the conditions imposed in the conversion order.43

In addition, FARM avers that among the conditions attached to the conversion order, which RCBC and LIPCO necessarily
have knowledge of, are (a) that its approval shall in no way amend, diminish, or alter the undertaking and obligations of
HLI as contained in the [SDP] approved on November 21, 1989; and (b) that the benefits, wages and the like, received by
the FWBs shall not in any way be reduced or adversely affected, among others.44

The contentions of respondents are wanting. In the first place, there is no denying that RCBC and LIPCO knew that the
converted lands they bought were under the coverage of CARP. Nevertheless, as We have mentioned in Our July 5, 2011
Decision, this does not necessarily mean that both LIPCO and RCBC already acted in bad faith in purchasing the
converted lands. As this Court explained:

It cannot be claimed that RCBC and LIPCO acted in bad faith in acquiring the lots that were previously covered by the
SDP. Good faith "consists in the possessor’s belief that the person from whom he received it was the owner of the same
and could convey his title. Good faith requires a well-founded belief that the person from whom title was received was
himself the owner of the land, with the right to convey it. There is good faith where there is an honest intention to abstain
from taking any unconscientious advantage from another." It is the opposite of fraud.

To be sure, intervenor RCBC and LIPCO knew that the lots they bought were subjected to CARP coverage by means of a
stock distribution plan, as the DAR conversion order was annotated at the back of the titles of the lots they acquired.
However, they are of the honest belief that the subject lots were validly converted to commercial or industrial purposes
and for which said lots were taken out of the CARP coverage subject of PARC Resolution No. 89-12-2 and, hence, can be
legally and validly acquired by them. After all, Sec. 65 of RA 6657 explicitly allows conversion and disposition of
agricultural lands previously covered by CARP land acquisition "after the lapse of five (5) years from its award when the
land ceases to be economically feasible and sound for agricultural purposes or the locality has become urbanized and the
land will have a greater economic value for residential, commercial or industrial purposes." Moreover, DAR notified all the
affected parties, more particularly the FWBs, and gave them the opportunity to comment or oppose the proposed
conversion. DAR, after going through the necessary processes, granted the conversion of 500 hectares of Hacienda
Luisita pursuant to its primary jurisdiction under Sec. 50 of RA 6657 to determine and adjudicate agrarian reform matters
and its original exclusive jurisdiction over all matters involving the implementation of agrarian reform. The DAR conversion
order became final and executory after none of the FWBs interposed an appeal to the CA. In this factual setting, RCBC
and LIPCO purchased the lots in question on their honest and well-founded belief that the previous registered owners
could legally sell and convey the lots though these were previously subject of CARP coverage. Ergo, RCBC and LIPCO
acted in good faith in acquiring the subject lots. (Emphasis supplied.)

In the second place, the allegation that the converted lands remain undeveloped is contradicted by the evidence on
record, particularly, Annex "X" of LIPCO’s Memorandum dated September 23, 2010,45 which has photographs showing
that the land has been partly developed.46 Certainly, it is a general rule that the factual findings of administrative agencies
are conclusive and binding on the Court when supported by substantial evidence.47 However, this rule admits of certain
exceptions, one of which is when the findings of fact are premised on the supposed absence of evidence and contradicted
by the evidence on record.48

In the third place, by arguing that the companies involved in the transfers of the 300-hectare portion of Hacienda Luisita
have interlocking directors and, thus, knowledge of one may already be imputed upon all the other companies, AMBALA
and Rene Galang, in effect, want this Court to pierce the veil of corporate fiction. However, piercing the veil of corporate
fiction is warranted "only in cases when the separate legal entity is used to defeat public convenience, justify wrong,
protect fraud, or defend crime, such that in the case of two corporations, the law will regard the corporations as merged
into one."49 As succinctly discussed by the Court in Velarde v. Lopez, Inc.:50

Petitioner argues nevertheless that jurisdiction over the subsidiary is justified by piercing the veil of corporate fiction.
Piercing the veil of corporate fiction is warranted, however, only in cases when the separate legal entity is used to defeat
public convenience, justify wrong, protect fraud, or defend crime, such that in the case of two corporations, the law will
regard the corporations as merged into one. The rationale behind piercing a corporation’s identity is to remove the barrier
between the corporation from the persons comprising it to thwart the fraudulent and illegal schemes of those who use the
corporate personality as a shield for undertaking certain proscribed activities.

In applying the doctrine of piercing the veil of corporate fiction, the following requisites must be established: (1) control,
not merely majority or complete stock control; (2) such control must have been used by the defendant to commit fraud or
wrong, to perpetuate the violation of a statutory or other positive legal duty, or dishonest acts in contravention of plaintiff’s
legal rights; and (3) the aforesaid control and breach of duty must proximately cause the injury or unjust loss complained
of. (Citations omitted.)

Nowhere, however, in the pleadings and other records of the case can it be gathered that respondent has complete
control over Sky Vision, not only of finances but of policy and business practice in respect to the transaction attacked, so
that Sky Vision had at the time of the transaction no separate mind, will or existence of its own. The existence of
interlocking directors, corporate officers and shareholders is not enough justification to pierce the veil of corporate fiction
in the absence of fraud or other public policy considerations.

Absent any allegation or proof of fraud or other public policy considerations, the existence of interlocking directors, officers
and stockholders is not enough justification to pierce the veil of corporate fiction as in the instant case.

And in the fourth place, the fact that this Court, in its July 5, 2011 Decision, ordered the payment of the proceeds of the
sale of the converted land, and even of the 80.51-hectare land sold to the government, through the Bases Conversion
Development Authority, to the qualified FWBs, effectively fulfils the conditions in the conversion order, to wit: (1) that its
approval shall in no way amend, diminish, or alter the undertaking and obligations of HLI as contained in the SDP
approved on November 21, 1989; and (2) that the benefits, wages and the like, received by the FWBs shall not in any way
be reduced or adversely affected, among others.

A view has also been advanced that the 200-hectare lot transferred to Luisita Realty Corporation (LRC) should be
included in the compulsory coverage because the corporation did not intervene.
We disagree. Since the 200-hectare lot formed part of the SDP that was nullified by PARC Resolution 2005-32-01, this
Court is constrained to make a ruling on the rights of LRC over the said lot. Moreover, the 500-hectare portion of
Hacienda Luisita, of which the 200-hectare portion sold to LRC and the 300-hectare portion subsequently acquired by
LIPCO and RCBC were part of, was already the subject of the August 14, 1996 DAR Conversion Order. By virtue of the
said conversion order, the land was already reclassified as industrial/commercial land not subject to compulsory
coverage. Thus, if We place the 200-hectare lot sold to LRC under compulsory coverage, this Court would, in effect, be
disregarding the DAR Conversion Order, which has long attained its finality. And as this Court held in Berboso v.
CA,51 "Once final and executory, the Conversion Order can no longer be questioned." Besides, to disregard the
Conversion Order through the revocation of the approval of the SDP would create undue prejudice to LRC, which is not
even a party to the proceedings below, and would be tantamount to deprivation of property without due process of law.

Nonethess, the minority is of the adamant view that since LRC failed to intervene in the instant case and was, therefore,
unable to present evidence supporting its good faith purchase of the 200-hectare converted land, then LRC should be
given full opportunity to present its case before the DAR. This minority view is a contradiction in itself. Given that LRC did
not intervene and is, therefore, not a party to the instant case, then it would be incongruous to order them to present
evidence before the DAR. Such an order, if issued by this Court, would not be binding upon the LRC.

Moreover, LRC may be considered to have waived its right to participate in the instant petition since it did not intervene in
the DAR proceedings for the nullification of the PARC Resolution No. 89-12-2 which approved the SDP.

(c) Proceeds of the sale of the 500-hectare converted land

and of the 80.51-hectare land used for the SCTEX

As previously mentioned, We ruled in Our July 5, 2011 Decision that since the Court excluded the 500-hectare lot subject
of the August 14, 1996 Conversion Order and the 80.51-hectare SCTEX lot acquired by the government from compulsory
coverage, then HLI and its subsidiary, Centennary, should be liable to the FWBs for the price received for said lots. Thus:

There is a claim that, since the sale and transfer of the 500 hectares of land subject of the August 14, 1996 Conversion
Order and the 80.51-hectare SCTEX lot came after compulsory coverage has taken place, the FWBs should have their
corresponding share of the land’s value. There is merit in the claim. Since the SDP approved by PARC Resolution No. 89-
12-2 has been nullified, then all the lands subject of the SDP will automatically be subject of compulsory coverage under
Sec. 31 of RA 6657. Since the Court excluded the 500-hectare lot subject of the August 14, 1996 Conversion Order and
the 80.51-hectare SCTEX lot acquired by the government from the area covered by SDP, then HLI and its subsidiary,
Centennary, shall be liable to the FWBs for the price received for said lots. HLI shall be liable for the value received for the
sale of the 200-hectare land to LRC in the amount of PhP 500,000,000 and the equivalent value of the 12,000,000 shares
of its subsidiary, Centennary, for the 300-hectare lot sold to LIPCO for the consideration of PhP 750,000,000. Likewise,
HLI shall be liable for PhP 80,511,500 as consideration for the sale of the 80.51-hectare SCTEX lot.

We, however, note that HLI has allegedly paid 3% of the proceeds of the sale of the 500-hectare land and 80.51-hectare
SCTEX lot to the FWBs. We also take into account the payment of taxes and expenses relating to the transfer of the land
and HLI’s statement that most, if not all, of the proceeds were used for legitimate corporate purposes. In order to
determine once and for all whether or not all the proceeds were properly utilized by HLI and its subsidiary, Centennary,
DAR will engage the services of a reputable accounting firm to be approved by the parties to audit the books of HLI to
determine if the proceeds of the sale of the 500-hectare land and the 80.51-hectare SCTEX lot were actually used for
legitimate corporate purposes, titling expenses and in compliance with the August 14, 1996 Conversion Order. The cost of
the audit will be shouldered by HLI. If after such audit, it is determined that there remains a balance from the proceeds of
the sale, then the balance shall be distributed to the qualified FWBs.

HLI, however, takes exception to the above-mentioned ruling and contends that it is not proper to distribute the unspent or
unused balance of the proceeds of the sale of the 500-hectare converted land and 80.51-hectare SCTEX lot to the
qualified FWBs for the following reasons: (1) the proceeds of the sale belong to the corporation, HLI, as corporate capital
and assets in substitution for the portions of its land asset which were sold to third parties; (2) to distribute the cash sales
proceeds of the portions of the land asset to the FWBs, who are stockholders of HLI, is to dissolve the corporation and
distribute the proceeds as liquidating dividends without even paying the creditors of the corporation; and (3) the doing of
said acts would violate the stringent provisions of the Corporation Code and corporate practice.52

Apparently, HLI seeks recourse to the Corporation Code in order to avoid its liability to the FWBs for the price received for
the 500-hectare converted lot and the 80.51-hectare SCTEX lot. However, as We have established in Our July 5, 2011
Decision, the rights, obligations and remedies of the parties in the instant case are primarily governed by RA 6657 and
HLI cannot shield itself from the CARP coverage merely under the convenience of being a corporate entity. In this regard,
it should be underscored that the agricultural lands held by HLI by virtue of the SDP are no ordinary assets. These are
special assets, because, originally, these should have been distributed to the FWBs were it not for the approval of the
SDP by PARC. Thus, the government cannot renege on its responsibility over these assets. Likewise, HLI is no ordinary
corporation as it was formed and organized precisely to make use of these agricultural lands actually intended for
distribution to the FWBs. Thus, it cannot shield itself from the coverage of CARP by invoking the Corporation Code. As
explained by the Court:

HLI also parlays the notion that the parties to the SDOA should now look to the Corporation Code, instead of to RA 6657,
in determining their rights, obligations and remedies. The Code, it adds, should be the applicable law on the disposition of
the agricultural land of HLI.

Contrary to the view of HLI, the rights, obligations and remedies of the parties to the SDOA embodying the SDP
are primarily governed by RA 6657. It should abundantly be made clear that HLI was precisely created in order to
comply with RA 6657, which the OSG aptly described as the "mother law" of the SDOA and the SDP.53 It is, thus,
paradoxical for HLI to shield itself from the coverage of CARP by invoking exclusive applicability of the
Corporation Code under the guise of being a corporate entity.

Without in any way minimizing the relevance of the Corporation Code since the FWBs of HLI are also
stockholders, its applicability is limited as the rights of the parties arising from the SDP should not be made to
supplant or circumvent the agrarian reform program.

Without doubt, the Corporation Code is the general law providing for the formation, organization and regulation of private
corporations. On the other hand, RA 6657 is the special law on agrarian reform. As between a general and special law,
the latter shall prevail—generalia specialibus non derogant.54 Besides, the present impasse between HLI and the private
respondents is not an intra-corporate dispute which necessitates the application of the Corporation Code. What private
respondents questioned before the DAR is the proper implementation of the SDP and HLI’s compliance with RA 6657.
Evidently, RA 6657 should be the applicable law to the instant case. (Emphasis supplied.)

Considering that the 500-hectare converted land, as well as the 80.51-hectare SCTEX lot, should have been included in
the compulsory coverage were it not for their conversion and valid transfers, then it is only but proper that the price
received for the sale of these lots should be given to the qualified FWBs. In effect, the proceeds from the sale shall take
the place of the lots.

The Court, in its July 5, 2011 Decision, however, takes into account, inter alia, the payment of taxes and expenses
relating to the transfer of the land, as well as HLI’s statement that most, if not all, of the proceeds were used for legitimate
corporate purposes. Accordingly, We ordered the deduction of the taxes and expenses relating to the transfer of titles to
the transferees, and the expenditures incurred by HLI and Centennary for legitimate corporate purposes, among others.

On this note, DAR claims that the "[l]egitimate corporate expenses should not be deducted as there is no basis for it,
especially since only the auditing to be conducted on the financial records of HLI will reveal the amounts to be offset
between HLI and the FWBs."55

The contention is unmeritorious. The possibility of an offsetting should not prevent Us from deducting the legitimate
corporate expenses incurred by HLI and Centennary. After all, the Court has ordered for a proper auditing "[i]n order to
determine once and for all whether or not all the proceeds were properly utilized by HLI and its subsidiary, Centennary." In
this regard, DAR is tasked to "engage the services of a reputable accounting firm to be approved by the parties to audit
the books of HLI to determine if the proceeds of the sale of the 500-hectare land and the 80.51-hectare SCTEX lot were
actually used for legitimate corporate purposes, titling expenses and in compliance with the August 14, 1996 Conversion
Order." Also, it should be noted that it is HLI which shall shoulder the cost of audit to reduce the burden on the part of the
FWBs. Concomitantly, the legitimate corporate expenses incurred by HLI and Centennary, as will be determined by a
reputable accounting firm to be engaged by DAR, shall be among the allowable deductions from the proceeds of the sale
of the 500-hectare land and the 80.51-hectare SCTEX lot.

We, however, find that the 3% production share should not be deducted from the proceeds of the sale of the 500-hectare
converted land and the 80.51-hectare SCTEX lot. The 3% production share, like the homelots, was among the benefits
received by the FWBs as farmhands in the agricultural enterprise of HLI and, thus, should not be taken away from the
FWBs.
Contrarily, the minority is of the view that as a consequence of the revocation of the SDP, the parties should be restored
to their respective conditions prior to its execution and approval, subject to the application of the principle of set-off or
compensation. Such view is patently misplaced.

The law on contracts, i.e. mutual restitution, does not apply to the case at bar. To reiterate, what was actually revoked by
this Court, in its July 5, 2011 Decision, is PARC Resolution No. 89-12-2 approving the SDP. To elucidate, it was the SDP,
not the SDOA, which was presented for approval by Tadeco to DAR.56 The SDP explained the mechanics of the stock
distribution but did not make any reference nor correlation to the SDOA. The pertinent portions of the proposal read:

MECHANICS OF STOCK DISTRIBUTION PLAN

Under Section 31 of Republic Act No. 6657, a corporation owning agricultural land may distribute among the qualified
beneficiaries such proportion or percentage of its capital stock that the value of the agricultural land actually devoted to
agricultural activities, bears in relation to the corporation’s total assets. Conformably with this legal provision, Tarlac
Development Corporation hereby submits for approval a stock distribution plan that envisions the following:57 (Terms and
conditions omitted; emphasis supplied)

xxxx

The above stock distribution plan is hereby submitted on the basis of all these benefits that the farmworker-beneficiaries
of Hacienda Luisita will receive under its provisions in addition to their regular compensation as farmhands in the
agricultural enterprise and the fringe benefits granted to them by their collective bargaining agreement with
management.58

Also, PARC Resolution No. 89-12-2 reads as follows:

RESOLUTION APPROVING THE STOCK DISTRIBUTION PLAN OF TARLAC DEVELOPMENT COMPANY/HACIENDA

LUISITA INCORPORATED (TDC/HLI)

NOW THEREFORE, on motion duly seconded,

RESOLVED, as it is hereby resolved, to approve the stock distribution plan of TDC/HLI.

UNANIMOUSLY APPROVED.59 (Emphasis supplied)

Clearly, what was approved by PARC is the SDP and not the SDOA. There is, therefore, no basis for this Court to apply
the law on contracts to the revocation of the said PARC Resolution.

IV. Just Compensation

In Our July 5, 2011 Decision, We stated that "HLI shall be paid just compensation for the remaining agricultural land that
will be transferred to DAR for land distribution to the FWBs." We also ruled that the date of the "taking" is November 21,
1989, when PARC approved HLI’s SDP per PARC Resolution No. 89-12-2.

In its Motion for Clarification and Partial Reconsideration, HLI disagrees with the foregoing ruling and contends that the
"taking" should be reckoned from finality of the Decision of this Court, or at the very least, the reckoning period may be
tacked to January 2, 2006, the date when the Notice of Coverage was issued by the DAR pursuant to PARC Resolution
No. 2006-34-01 recalling/revoking the approval of the SDP.60

For their part, Mallari, et al. argue that the valuation of the land cannot be based on November 21, 1989, the date of
approval of the SDP. Instead, they aver that the date of "taking" for valuation purposes is a factual issue best left to the
determination of the trial courts.61

At the other end of the spectrum, AMBALA alleges that HLI should no longer be paid just compensation for the agricultural
land that will be distributed to the FWBs, since the Manila Regional Trial Court (RTC) already rendered a decision
ordering "the Cojuangcos to transfer the control of Hacienda Luisita to the Ministry of Agrarian Reform, which will
distribute the land to small farmers after compensating the landowners P3.988 million."62 In the event, however, that this
Court will rule that HLI is indeed entitled to compensation, AMBALA contends that it should be pegged at forty thousand
pesos (PhP 40,000) per hectare, since this was the same value that Tadeco declared in 1989 to make sure that the
farmers will not own the majority of its stocks.63

Despite the above propositions, We maintain that the date of "taking" is November 21, 1989, the date when PARC
approved HLI’s SDP per PARC Resolution No. 89-12-2, in view of the fact that this is the time that the FWBs were
considered to own and possess the agricultural lands in Hacienda Luisita. To be precise, these lands became subject of
the agrarian reform coverage through the stock distribution scheme only upon the approval of the SDP, that is, November
21, 1989. Thus, such approval is akin to a notice of coverage ordinarily issued under compulsory acquisition. Further, any
doubt should be resolved in favor of the FWBs. As this Court held in Perez-Rosario v. CA:64

It is an established social and economic fact that the escalation of poverty is the driving force behind the political
disturbances that have in the past compromised the peace and security of the people as well as the continuity of the
national order. To subdue these acute disturbances, the legislature over the course of the history of the nation passed a
series of laws calculated to accelerate agrarian reform, ultimately to raise the material standards of living and eliminate
discontent. Agrarian reform is a perceived solution to social instability. The edicts of social justice found in the Constitution
and the public policies that underwrite them, the extraordinary national experience, and the prevailing national
consciousness, all command the great departments of government to tilt the balance in favor of the poor and
underprivileged whenever reasonable doubt arises in the interpretation of the law. But annexed to the great and sacred
charge of protecting the weak is the diametric function to put every effort to arrive at an equitable solution for all parties
concerned: the jural postulates of social justice cannot shield illegal acts, nor do they sanction false sympathy towards a
certain class, nor yet should they deny justice to the landowner whenever truth and justice happen to be on her side. In
the occupation of the legal questions in all agrarian disputes whose outcomes can significantly affect societal harmony,
the considerations of social advantage must be weighed, an inquiry into the prevailing social interests is necessary in the
adjustment of conflicting demands and expectations of the people, and the social interdependence of these interests,
recognized. (Emphasis supplied.)

The minority contends that it is the date of the notice of coverage, that is, January 2, 2006, which is determinative of the
just compensation HLI is entitled to for its expropriated lands. To support its contention, it cited numerous cases where the
time of the taking was reckoned on the date of the issuance of the notice of coverage.

However, a perusal of the cases cited by the minority would reveal that none of them involved the stock distribution
scheme. Thus, said cases do not squarely apply to the instant case. Moreover, it should be noted that it is precisely
because the stock distribution option is a distinctive mechanism under RA 6657 that it cannot be treated similarly with that
of compulsory land acquisition as these are two (2) different modalities under the agrarian reform program. As We have
stated in Our July 5, 2011 Decision, RA 6657 "provides two (2) alternative modalities, i.e., land or stock transfer, pursuant
to either of which the corporate landowner can comply with CARP."

In this regard, it should be noted that when HLI submitted the SDP to DAR for approval, it cannot be gainsaid that the
stock distribution scheme is clearly HLI’s preferred modality in order to comply with CARP. And when the SDP was
approved, stocks were given to the FWBs in lieu of land distribution. As aptly observed by the minority itself, "[i]nstead of
expropriating lands, what the government took and distributed to the FWBs were shares of stock of petitioner HLI in
proportion to the value of the agricultural lands that should have been expropriated and turned over to the FWBs." It
cannot, therefore, be denied that upon the approval of the SDP submitted by HLI, the agricultural lands of Hacienda
Luisita became subject of CARP coverage. Evidently, the approval of the SDP took the place of a notice of coverage
issued under compulsory acquisition.

Also, it is surprising that while the minority opines that under the stock distribution option, "title to the property remains
with the corporate landowner, which should presumably be dominated by farmers with majority stockholdings in the
corporation," it still insists that the just compensation that should be given to HLI is to be reckoned on January 2, 2006, the
date of the issuance of the notice of coverage, even after it found that the FWBs did not have the majority stockholdings in
HLI contrary to the supposed avowed policy of the law. In effect, what the minority wants is to prejudice the FWBs twice.
Given that the FWBs should have had majority stockholdings in HLI but did not, the minority still wants the government to
pay higher just compensation to HLI. Even if it is the government which will pay the just compensation to HLI, this will also
affect the FWBs as they will be paying higher amortizations to the government if the "taking" will be considered to have
taken place only on January 2, 2006.

The foregoing notwithstanding, it bears stressing that the DAR's land valuation is only preliminary and is not, by any
means, final and conclusive upon the landowner. The landowner can file an original action with the RTC acting as a
special agrarian court to determine just compensation. The court has the right to review with finality the determination in
the exercise of what is admittedly a judicial function.65
A view has also been advanced that HLI should pay the qualified FWBs rental for the use and possession of the land up
to the time it surrenders possession and control over these lands. What this view fails to consider is the fact that the
FWBs are also stockholders of HLI prior to the revocation of PARC Resolution No. 89-12-2. Also, the income earned by
the corporation from its possession and use of the land ultimately redounded to the benefit of the FWBs based on its
business operations in the form of salaries, benefits voluntarily granted by HLI and other fringe benefits under their
Collective Bargaining Agreement. That being so, there would be unjust enrichment on the part of the FWBs if HLI will still
be required to pay rent for the use of the land in question.

V. Sale to Third Parties

There is a view that since the agricultural lands in Hacienda Luisita were placed under CARP coverage through the SDOA
scheme on May 11, 1989, then the 10-year period prohibition on the transfer of awarded lands under RA 6657 lapsed on
May 10, 1999, and, consequently, the qualified FWBs should already be allowed to sell these lands with respect to their
land interests to third parties, including HLI, regardless of whether they have fully paid for the lands or not.

The proposition is erroneous. Sec. 27 of RA 6657 states:

SEC. 27. Transferability of Awarded Lands. - Lands acquired by beneficiaries under this Act may not be sold, transferred
or conveyed except through hereditary succession, or to the government, or to the LBP, or to other qualified beneficiaries
for a period of ten (10) years: Provided, however, That the children or the spouse of the transferor shall have a right to
repurchase the land from the government or LBP within a period of two (2) years. Due notice of the availability of the land
shall be given by the LBP to the Barangay Agrarian Reform Committee (BARC) of the barangay where the land is
situated. The Provincial Agrarian Coordinating Committee (PARCCOM), as herein provided, shall, in turn, be given due
notice thereof by the BARC.

If the land has not yet been fully paid by the beneficiary, the right to the land may be transferred or conveyed, with prior
approval of the DAR, to any heir of the beneficiary or to any other beneficiary who, as a condition for such transfer or
conveyance, shall cultivate the land himself. Failing compliance herewith, the land shall be transferred to the LBP which
shall give due notice of the availability of the land in the manner specified in the immediately preceding paragraph.

In the event of such transfer to the LBP, the latter shall compensate the beneficiary in one lump sum for the amounts the
latter has already paid, together with the value of improvements he has made on the land. (Emphasis supplied.)

To implement the above-quoted provision, inter alia, DAR issued Administrative Order No. 1, Series of 1989 (DAO 1)
entitled Rules and Procedures Governing Land Transactions. Said Rules set forth the rules on validity of land
transactions, to wit:

II. RULES ON VALIDITY OF LAND TRANSACTIONS

A. The following transactions are valid:

1. Those executed by the original landowner in favor of the qualified beneficiary from among those certified by
DAR.

2. Those in favor of the government, DAR or the Land Bank of the Philippines.

3. Those covering lands retained by the landowner under Section 6 of R.A. 6657 duly certified by the designated
DAR Provincial Agrarian Reform Officer (PARO) as a retention area, executed in favor of transferees whose total
landholdings inclusive of the land to be acquired do not exceed five (5) hectares; subject, however, to the right of
pre-emption and/or redemption of tenant/lessee under Section 11 and 12 of R.A. 3844, as amended.

xxxx

4. Those executed by beneficiaries covering lands acquired under any agrarian reform law in favor of the
government, DAR, LBP or other qualified beneficiaries certified by DAR.

5. Those executed after ten (10) years from the issuance and registration of the Emancipation Patent or
Certificate of Land Ownership Award.
B. The following transactions are not valid:

1. Sale, disposition, lease management contract or transfer of possession of private lands executed by the original
landowner prior to June 15, 1988, which are registered on or before September 13, 1988, or those executed after
June 15, 1988, covering an area in excess of the five-hectare retention limit in violation of R.A. 6657.

2. Those covering lands acquired by the beneficiary under R.A. 6657 and executed within ten (10) years from the
issuance and registration of an Emancipation Patent or Certificate of Land Ownership Award.

3. Those executed in favor of a person or persons not qualified to acquire land under R.A. 6657.

4. Sale, transfer, conveyance or change of nature of the land outside of urban centers and city limits either in
whole or in part as of June 15, 1988, when R.A. 6657 took effect, except as provided for under DAR
Administrative Order No. 15, series of 1988.

5. Sale, transfer or conveyance by beneficiary of the right to use or any other usufructuary right over the land he
acquired by virtue of being a beneficiary, in order to circumvent the law.

x x x x (Emphasis supplied.)

Without a doubt, under RA 6657 and DAO 1, the awarded lands may only be transferred or conveyed after ten (10) years
from the issuance and registration of the emancipation patent (EP) or certificate of land ownership award (CLOA).
Considering that the EPs or CLOAs have not yet been issued to the qualified FWBs in the instant case, the 10-year
prohibitive period has not even started. Significantly, the reckoning point is the issuance of the EP or CLOA, and not the
placing of the agricultural lands under CARP coverage.

Moreover, if We maintain the position that the qualified FWBs should be immediately allowed the option to sell or convey
the agricultural lands in Hacienda Luisita, then all efforts at agrarian reform would be rendered nugatory by this Court,
since, at the end of the day, these lands will just be transferred to persons not entitled to land distribution under CARP. As
aptly noted by the late Senator Neptali Gonzales during the Joint Congressional Conference Committee on the
Comprehensive Agrarian Reform Program Bills:

SEN. GONZALES. My point is, as much as possible let the said lands be distributed under CARP remain with the
beneficiaries and their heirs because that is the lesson that we have to learn from PD No. 27. If you will talk with the
Congressmen representing Nueva Ecija, Pampanga and Central Luzon provinces, law or no law, you will find out that
more than one-third of the original, of the lands distributed under PD 27 are no longer owned, possessed or being worked
by the grantees or the awardees of the same, something which we ought to avoid under the CARP bill that we are going
to enact.66 (Emphasis supplied.)

Worse, by raising that the qualified beneficiaries may sell their interest back to HLI, this smacks of outright indifference to
the provision on retention limits67 under RA 6657, as this Court, in effect, would be allowing HLI, the previous landowner,
to own more than five (5) hectares of agricultural land, which We cannot countenance. There is a big difference between
the ownership of agricultural lands by HLI under the stock distribution scheme and its eventual acquisition of the
agricultural lands from the qualified FWBs under the proposed buy-back scheme. The rule on retention limits does not
apply to the former but only to the latter in view of the fact that the stock distribution scheme is sanctioned by Sec. 31 of
RA 6657, which specifically allows corporations to divest a proportion of their capital stock that "the agricultural land,
actually devoted to agricultural activities, bears in relation to the company’s total assets." On the other hand, no special
rules exist under RA 6657 concerning the proposed buy-back scheme; hence, the general rules on retention limits should
apply.

Further, the position that the qualified FWBs are now free to transact with third parties concerning their land interests,
regardless of whether they have fully paid for the lands or not, also transgresses the second paragraph of Sec. 27 of RA
6657, which plainly states that "[i]f the land has not yet been fully paid by the beneficiary, the right to the land may be
transferred or conveyed, with prior approval of the DAR, to any heir of the beneficiary or to any other beneficiary who, as a
condition for such transfer or conveyance, shall cultivate the land himself. Failing compliance herewith, the land shall be
transferred to the LBP x x x." When the words and phrases in the statute are clear and unequivocal, the law is applied
according to its express terms.68 Verba legis non est recedendum, or from the words of a statute there should be no
departure.69
The minority, however, posits that "[t]o insist that the FWBs’ rights sleep for a period of ten years is unrealistic, and may
seriously deprive them of real opportunities to capitalize and maximize the victory of direct land distribution." By insisting
that We disregard the ten-year restriction under the law in the case at bar, the minority, in effect, wants this Court to
engage in judicial legislation, which is violative of the principle of separation of powers.70 The discourse by Ruben E.
Agpalo, in his book on statutory construction, is enlightening:

Where the law is clear and unambiguous, it must be taken to mean exactly what it says and the court has no choice but to
see to it that its mandate is obeyed. Where the law is clear and free from doubt or ambiguity, there is no room for
construction or interpretation. Thus, where what is not clearly provided in the law is read into the law by construction
because it is more logical and wise, it would be to encroach upon legislative prerogative to define the wisdom of the law,
which is judicial legislation. For whether a statute is wise or expedient is not for the courts to determine. Courts must
administer the law, not as they think it ought to be but as they find it and without regard to consequences.71 (Emphasis
supplied.)

And as aptly stated by Chief Justice Renato Corona in his Dissenting Opinion in Ang Ladlad LGBT Party v. COMELEC:72

Regardless of the personal beliefs and biases of its individual members, this Court can only apply and interpret the
Constitution and the laws. Its power is not to create policy but to recognize, review or reverse the policy crafted by the
political departments if and when a proper case is brought before it. Otherwise, it will tread on the dangerous grounds of
judicial legislation.

Considerably, this Court is left with no other recourse but to respect and apply the law.

VI. Grounds for Revocation of the SDP

AMBALA and FARM reiterate that improving the economic status of the FWBs is among the legal obligations of HLI under
the SDP and is an imperative imposition by RA 6657 and DAO 10.73 FARM further asserts that "[i]f that minimum
threshold is not met, why allow [stock distribution option] at all, unless the purpose is not social justice but a political
accommodation to the powerful."74

Contrary to the assertions of AMBALA and FARM, nowhere in the SDP, RA 6657 and DAO 10 can it be inferred that
improving the economic status of the FWBs is among the legal obligations of HLI under the SDP or is an imperative
imposition by RA 6657 and DAO 10, a violation of which would justify discarding the stock distribution option. As We have
painstakingly explained in Our July 5, 2011 Decision:

In the Terminal Report adopted by PARC, it is stated that the SDP violates the agrarian reform policy under Sec. 2 of RA
6657, as the said plan failed to enhance the dignity and improve the quality of lives of the FWBs through greater
productivity of agricultural lands. We disagree.

Sec. 2 of RA 6657 states:

SECTION 2. Declaration of Principles and Policies.¾It is the policy of the State to pursue a Comprehensive Agrarian
Reform Program (CARP). The welfare of the landless farmers and farm workers will receive the highest consideration to
promote social justice and to move the nation towards sound rural development and industrialization, and the
establishment of owner cultivatorship of economic-sized farms as the basis of Philippine agriculture.

To this end, a more equitable distribution and ownership of land, with due regard to the rights of landowners to just
compensation and to the ecological needs of the nation, shall be undertaken to provide farmers and farm workers with the
opportunity to enhance their dignity and improve the quality of their lives through greater productivity of agricultural lands.

The agrarian reform program is founded on the right of farmers and regular farm workers, who are landless, to own
directly or collectively the lands they till or, in the case of other farm workers, to receive a share of the fruits thereof. To
this end, the State shall encourage the just distribution of all agricultural lands, subject to the priorities and retention limits
set forth in this Act, having taken into account ecological, developmental, and equity considerations, and subject to the
payment of just compensation. The State shall respect the right of small landowners and shall provide incentives for
voluntary land-sharing.

Paragraph 2 of the above-quoted provision specifically mentions that "a more equitable distribution and ownership of land
x x x shall be undertaken to provide farmers and farm workers with the opportunity to enhance their dignity and improve
the quality of their lives through greater productivity of agricultural lands." Of note is the term "opportunity" which is
defined as a favorable chance or opening offered by circumstances. Considering this, by no stretch of imagination can
said provision be construed as a guarantee in improving the lives of the FWBs. At best, it merely provides for a possibility
or favorable chance of uplifting the economic status of the FWBs, which may or may not be attained.

Pertinently, improving the economic status of the FWBs is neither among the legal obligations of HLI under the SDP nor
an imperative imposition by RA 6657 and DAO 10, a violation of which would justify discarding the stock distribution
option. Nothing in that option agreement, law or department order indicates otherwise.

Significantly, HLI draws particular attention to its having paid its FWBs, during the regime of the SDP (1989-2005), some
PhP 3 billion by way of salaries/wages and higher benefits exclusive of free hospital and medical benefits to their
immediate family. And attached as Annex "G" to HLI’s Memorandum is the certified true report of the finance manager of
Jose Cojuangco & Sons Organizations-Tarlac Operations, captioned as "HACIENDA LUISITA, INC. Salaries, Benefits
and Credit Privileges (in Thousand Pesos) Since the Stock Option was Approved by PARC/CARP," detailing what HLI
gave their workers from 1989 to 2005. The sum total, as added up by the Court, yields the following numbers: Total Direct
Cash Out (Salaries/Wages & Cash Benefits) = PhP 2,927,848; Total Non-Direct Cash Out (Hospital/Medical Benefits) =
PhP 303,040. The cash out figures, as stated in the report, include the cost of homelots; the PhP 150 million or so
representing 3% of the gross produce of the hacienda; and the PhP 37.5 million representing 3% from the proceeds of the
sale of the 500-hectare converted lands. While not included in the report, HLI manifests having given the FWBs 3% of the
PhP 80 million paid for the 80 hectares of land traversed by the SCTEX. On top of these, it is worth remembering that the
shares of stocks were given by HLI to the FWBs for free. Verily, the FWBs have benefited from the SDP.

To address urgings that the FWBs be allowed to disengage from the SDP as HLI has not anyway earned profits through
the years, it cannot be over-emphasized that, as a matter of common business sense, no corporation could guarantee a
profitable run all the time. As has been suggested, one of the key features of an SDP of a corporate landowner is the
likelihood of the corporate vehicle not earning, or, worse still, losing money.

The Court is fully aware that one of the criteria under DAO 10 for the PARC to consider the advisability of approving a
stock distribution plan is the likelihood that the plan "would result in increased income and greater benefits to [qualified
beneficiaries] than if the lands were divided and distributed to them individually." But as aptly noted during the oral
arguments, DAO 10 ought to have not, as it cannot, actually exact assurance of success on something that is subject to
the will of man, the forces of nature or the inherent risky nature of business.75 Just like in actual land distribution, an SDP
cannot guarantee, as indeed the SDOA does not guarantee, a comfortable life for the FWBs. The Court can take judicial
notice of the fact that there were many instances wherein after a farmworker beneficiary has been awarded with an
agricultural land, he just subsequently sells it and is eventually left with nothing in the end.

In all then, the onerous condition of the FWBs’ economic status, their life of hardship, if that really be the case, can hardly
be attributed to HLI and its SDP and provide a valid ground for the plan’s revocation. (Citations omitted; emphasis in the
original.)

This Court, despite the above holding, still affirmed the revocation by PARC of its approval of the SDP based on the
following grounds: (1) failure of HLI to fully comply with its undertaking to distribute homelots to the FWBs under the SDP;
(2) distribution of shares of stock to the FWBs based on the number of "man days" or "number of days worked" by the
FWB in a year’s time; and (3) 30-year timeframe for the implementation or distribution of the shares of stock to the FWBs.

Just the same, Mallari, et al. posit that the homelots required to be distributed have all been distributed pursuant to the
SDOA, and that what merely remains to be done is the release of title from the Register of Deeds.76 They further assert
that there has been no dilution of shares as the corporate records would show that if ever not all of the 18,804.32 shares
were given to the actual original FWB, the recipient of the difference is the next of kin or children of said original
FWB.77 Thus, they submit that since the shares were given to the same "family beneficiary," this should be deemed as
substantial compliance with the provisions of Sec. 4 of DAO 10.78 Also, they argue that there has been no violation of the
three-month period to implement the SDP as mandated by Sec. 11 of DAO, since this provision must be read in light of
Sec. 10 of Executive Order No. 229, the pertinent portion of which reads, "The approval by the PARC of a plan for such
stock distribution, and its initial implementation, shall be deemed compliance with the land distribution requirement of the
CARP."79

Again, the matters raised by Mallari, et al. have been extensively discussed by the Court in its July 5, 2011 Decision. As
stated:

On Titles to Homelots
Under RA 6657, the distribution of homelots is required only for corporations or business associations owning or operating
farms which opted for land distribution. Sec. 30 of RA 6657 states:

SEC. 30. Homelots and Farmlots for Members of Cooperatives.¾The individual members of the cooperatives or
corporations mentioned in the preceding section shall be provided with homelots and small farmlots for their family use, to
be taken from the land owned by the cooperative or corporation.

The "preceding section" referred to in the above-quoted provision is as follows:

SEC. 29. Farms Owned or Operated by Corporations or Other Business Associations.¾In the case of farms owned or
operated by corporations or other business associations, the following rules shall be observed by the PARC.

In general, lands shall be distributed directly to the individual worker-beneficiaries.

In case it is not economically feasible and sound to divide the land, then it shall be owned collectively by the worker-
beneficiaries who shall form a workers’ cooperative or association which will deal with the corporation or business
association. Until a new agreement is entered into by and between the workers’ cooperative or association and the
corporation or business association, any agreement existing at the time this Act takes effect between the former and the
previous landowner shall be respected by both the workers’ cooperative or association and the corporation or business
association.

Noticeably, the foregoing provisions do not make reference to corporations which opted for stock distribution under Sec.
31 of RA 6657. Concomitantly, said corporations are not obliged to provide for it except by stipulation, as in this case.

Under the SDP, HLI undertook to "subdivide and allocate for free and without charge among the qualified family-
beneficiaries x x x residential or homelots of not more than 240 sq. m. each, with each family beneficiary being assured of
receiving and owning a homelot in the barrio or barangay where it actually resides," "within a reasonable time."

More than sixteen (16) years have elapsed from the time the SDP was approved by PARC, and yet, it is still the
contention of the FWBs that not all was given the 240-square meter homelots and, of those who were already given,
some still do not have the corresponding titles.

During the oral arguments, HLI was afforded the chance to refute the foregoing allegation by submitting proof that the
FWBs were already given the said homelots:

Justice Velasco: x x x There is also an allegation that the farmer beneficiaries, the qualified family beneficiaries were not
given the 240 square meters each. So, can you also [prove] that the qualified family beneficiaries were already provided
the 240 square meter homelots.

Atty. Asuncion: We will, your Honor please.

Other than the financial report, however, no other substantial proof showing that all the qualified beneficiaries have
received homelots was submitted by HLI. Hence, this Court is constrained to rule that HLI has not yet fully complied with
its undertaking to distribute homelots to the FWBs under the SDP.

On "Man Days" and the Mechanics of Stock Distribution

In our review and analysis of par. 3 of the SDOA on the mechanics and timelines of stock distribution, We find that
it violates two (2) provisions of DAO 10. Par. 3 of the SDOA states:

3. At the end of each fiscal year, for a period of 30 years, the SECOND PARTY [HLI] shall arrange with the FIRST PARTY
[TDC] the acquisition and distribution to the THIRD PARTY [FWBs] on the basis of number of days worked and at no cost
to them of one-thirtieth (1/30) of 118,391,976.85 shares of the capital stock of the SECOND PARTY that are presently
owned and held by the FIRST PARTY, until such time as the entire block of 118,391,976.85 shares shall have been
completely acquired and distributed to the THIRD PARTY.

Based on the above-quoted provision, the distribution of the shares of stock to the FWBs, albeit not entailing a cash out
from them, is contingent on the number of "man days," that is, the number of days that the FWBs have worked during the
year. This formula deviates from Sec. 1 of DAO 10, which decrees the distribution of equal number of shares to the FWBs
as the minimum ratio of shares of stock for purposes of compliance with Sec. 31 of RA 6657. As stated in Sec. 4 of DAO
10:

Section 4. Stock Distribution Plan.¾The [SDP] submitted by the corporate landowner-applicant shall provide for the
distribution of an equal number of shares of the same class and value, with the same rights and features as all other
shares, to each of the qualified beneficiaries. This distribution plan in all cases, shall be at least the minimum ratio for
purposes of compliance with Section 31 of R.A. No. 6657.

On top of the minimum ratio provided under Section 3 of this Implementing Guideline, the corporate landowner-applicant
may adopt additional stock distribution schemes taking into account factors such as rank, seniority, salary, position and
other circumstances which may be deemed desirable as a matter of sound company policy.

The above proviso gives two (2) sets or categories of shares of stock which a qualified beneficiary can acquire from the
corporation under the SDP. The first pertains, as earlier explained, to the mandatory minimum ratio of shares of stock to
be distributed to the FWBs in compliance with Sec. 31 of RA 6657. This minimum ratio contemplates of that "proportion of
the capital stock of the corporation that the agricultural land, actually devoted to agricultural activities, bears in relation to
the company’s total assets." It is this set of shares of stock which, in line with Sec. 4 of DAO 10, is supposed to be
allocated "for the distribution of an equal number of shares of stock of the same class and value, with the same rights and
features as all other shares, to each of the qualified beneficiaries."

On the other hand, the second set or category of shares partakes of a gratuitous extra grant, meaning that this set or
category constitutes an augmentation share/s that the corporate landowner may give under an additional stock distribution
scheme, taking into account such variables as rank, seniority, salary, position and like factors which the management, in
the exercise of its sound discretion, may deem desirable.

Before anything else, it should be stressed that, at the time PARC approved HLI’s SDP, HLI recognized 6,296 individuals
as qualified FWBs. And under the 30-year stock distribution program envisaged under the plan, FWBs who came in after
1989, new FWBs in fine, may be accommodated, as they appear to have in fact been accommodated as evidenced by
their receipt of HLI shares.

Now then, by providing that the number of shares of the original 1989 FWBs shall depend on the number of "man days,"
HLI violated the afore-quoted rule on stock distribution and effectively deprived the FWBs of equal shares of stock in the
corporation, for, in net effect, these 6,296 qualified FWBs, who theoretically had given up their rights to the land that could
have been distributed to them, suffered a dilution of their due share entitlement. As has been observed during the oral
arguments, HLI has chosen to use the shares earmarked for farmworkers as reward system chips to water down the
shares of the original 6,296 FWBs. Particularly:

Justice Abad: If the SDOA did not take place, the other thing that would have happened is that there would be CARP?

Atty. Dela Merced: Yes, Your Honor.

Justice Abad: That’s the only point I want to know x x x. Now, but they chose to enter SDOA instead of placing the land
under CARP. And for that reason those who would have gotten their shares of the land actually gave up their rights to this
land in place of the shares of the stock, is that correct?

Atty. Dela Merced: It would be that way, Your Honor.

Justice Abad: Right now, also the government, in a way, gave up its right to own the land because that way the
government takes own [sic] the land and distribute it to the farmers and pay for the land, is that correct?

Atty. Dela Merced: Yes, Your Honor.

Justice Abad: And then you gave thirty-three percent (33%) of the shares of HLI to the farmers at that time that numbered
x x x those who signed five thousand four hundred ninety eight (5,498) beneficiaries, is that correct?

Atty. Dela Merced: Yes, Your Honor.

Justice Abad: But later on, after assigning them their shares, some workers came in from 1989, 1990, 1991, 1992 and the
rest of the years that you gave additional shares who were not in the original list of owners?
Atty. Dela Merced: Yes, Your Honor.

Justice Abad: Did those new workers give up any right that would have belong to them in 1989 when the land was
supposed to have been placed under CARP?

Atty. Dela Merced: If you are talking or referring… (interrupted)

Justice Abad: None! You tell me. None. They gave up no rights to land?

Atty. Dela Merced: They did not do the same thing as we did in 1989, Your Honor.

Justice Abad: No, if they were not workers in 1989 what land did they give up? None, if they become workers later on.

Atty. Dela Merced: None, Your Honor, I was referring, Your Honor, to the original… (interrupted)

Justice Abad: So why is it that the rights of those who gave up their lands would be diluted, because the company has
chosen to use the shares as reward system for new workers who come in? It is not that the new workers, in effect,
become just workers of the corporation whose stockholders were already fixed. The TADECO who has shares there
about sixty six percent (66%) and the five thousand four hundred ninety eight (5,498) farmers at the time of the SDOA?
Explain to me. Why, why will you x x x what right or where did you get that right to use this shares, to water down the
shares of those who should have been benefited, and to use it as a reward system decided by the company?

From the above discourse, it is clear as day that the original 6,296 FWBs, who were qualified beneficiaries at the time of
the approval of the SDP, suffered from watering down of shares. As determined earlier, each original FWB is entitled to
18,804.32 HLI shares. The original FWBs got less than the guaranteed 18,804.32 HLI shares per beneficiary, because the
acquisition and distribution of the HLI shares were based on "man days" or "number of days worked" by the FWB in a
year’s time. As explained by HLI, a beneficiary needs to work for at least 37 days in a fiscal year before he or she
becomes entitled to HLI shares. If it falls below 37 days, the FWB, unfortunately, does not get any share at year end. The
number of HLI shares distributed varies depending on the number of days the FWBs were allowed to work in one year.
Worse, HLI hired farmworkers in addition to the original 6,296 FWBs, such that, as indicated in the Compliance dated
August 2, 2010 submitted by HLI to the Court, the total number of farmworkers of HLI as of said date stood at 10,502. All
these farmworkers, which include the original 6,296 FWBs, were given shares out of the 118,931,976.85 HLI shares
representing the 33.296% of the total outstanding capital stock of HLI. Clearly, the minimum individual allocation of each
original FWB of 18,804.32 shares was diluted as a result of the use of "man days" and the hiring of additional
farmworkers.

Going into another but related matter, par. 3 of the SDOA expressly providing for a 30-year timeframe for HLI-to-FWBs
stock transfer is an arrangement contrary to what Sec. 11 of DAO 10 prescribes. Said Sec. 11 provides for the
implementation of the approved stock distribution plan within three (3) months from receipt by the corporate landowner of
the approval of the plan by PARC. In fact, based on the said provision, the transfer of the shares of stock in the names of
the qualified FWBs should be recorded in the stock and transfer books and must be submitted to the SEC within sixty (60)
days from implementation. As stated:

Section 11. Implementation/Monitoring of Plan.¾The approved stock distribution plan shall be implemented within three
(3) months from receipt by the corporate landowner-applicant of the approval thereof by the PARC, and the transfer of the
shares of stocks in the names of the qualified beneficiaries shall be recorded in stock and transfer books and submitted to
the Securities and Exchange Commission (SEC) within sixty (60) days from the said implementation of the stock
distribution plan.

It is evident from the foregoing provision that the implementation, that is, the distribution of the shares of stock to the
FWBs, must be made within three (3) months from receipt by HLI of the approval of the stock distribution plan by PARC.
While neither of the clashing parties has made a compelling case of the thrust of this provision, the Court is of the view
and so holds that the intent is to compel the corporate landowner to complete, not merely initiate, the transfer process of
shares within that three-month timeframe. Reinforcing this conclusion is the 60-day stock transfer recording (with the
SEC) requirement reckoned from the implementation of the SDP.

To the Court, there is a purpose, which is at once discernible as it is practical, for the three-month threshold. Remove this
timeline and the corporate landowner can veritably evade compliance with agrarian reform by simply deferring to absurd
limits the implementation of the stock distribution scheme.
The argument is urged that the thirty (30)-year distribution program is justified by the fact that, under Sec. 26 of RA 6657,
payment by beneficiaries of land distribution under CARP shall be made in thirty (30) annual amortizations. To HLI, said
section provides a justifying dimension to its 30-year stock distribution program.

HLI’s reliance on Sec. 26 of RA 6657, quoted in part below, is obviously misplaced as the said provision clearly deals with
land distribution.

SEC. 26. Payment by Beneficiaries.¾Lands awarded pursuant to this Act shall be paid for by the beneficiaries to the LBP
in thirty (30) annual amortizations x x x.

Then, too, the ones obliged to pay the LBP under the said provision are the beneficiaries. On the other hand, in the instant
case, aside from the fact that what is involved is stock distribution, it is the corporate landowner who has the obligation to
distribute the shares of stock among the FWBs.

Evidently, the land transfer beneficiaries are given thirty (30) years within which to pay the cost of the land thus awarded
them to make it less cumbersome for them to pay the government. To be sure, the reason underpinning the 30-year
accommodation does not apply to corporate landowners in distributing shares of stock to the qualified beneficiaries, as the
shares may be issued in a much shorter period of time.

Taking into account the above discussion, the revocation of the SDP by PARC should be upheld for violating DAO 10. It
bears stressing that under Sec. 49 of RA 6657, the PARC and the DAR have the power to issue rules and regulations,
substantive or procedural. Being a product of such rule-making power, DAO 10 has the force and effect of law and must
be duly complied with. The PARC is, therefore, correct in revoking the SDP. Consequently, the PARC Resolution No. 89-
12-2 dated November 21, l989 approving the HLI’s SDP is nullified and voided. (Citations omitted; emphasis in the
original.)

Based on the foregoing ruling, the contentions of Mallari, et al. are either not supported by the evidence on record or are
utterly misplaced. There is, therefore, no basis for the Court to reverse its ruling affirming PARC Resolution No. 2005-32-
01 and PARC Resolution No. 2006-34-01, revoking the previous approval of the SDP by PARC.

VII. Control over Agricultural Lands

After having discussed and considered the different contentions raised by the parties in their respective motions, We are
now left to contend with one crucial issue in the case at bar, that is, control over the agricultural lands by the qualified
FWBs.

Upon a review of the facts and circumstances, We realize that the FWBs will never have control over these agricultural
lands for as long as they remain as stockholders of HLI. In Our July 5, 2011 Decision, this Court made the following
observations:

There is, thus, nothing unconstitutional in the formula prescribed by RA 6657. The policy on agrarian reform is that control
over the agricultural land must always be in the hands of the farmers. Then it falls on the shoulders of DAR and PARC to
see to it the farmers should always own majority of the common shares entitled to elect the members of the board of
directors to ensure that the farmers will have a clear majority in the board. Before the SDP is approved, strict scrutiny of
the proposed SDP must always be undertaken by the DAR and PARC, such that the value of the agricultural land
contributed to the corporation must always be more than 50% of the total assets of the corporation to ensure that the
majority of the members of the board of directors are composed of the farmers. The PARC composed of the President of
the Philippines and cabinet secretaries must see to it that control over the board of directors rests with the farmers by
rejecting the inclusion of non-agricultural assets which will yield the majority in the board of directors to non-farmers. Any
deviation, however, by PARC or DAR from the correct application of the formula prescribed by the second paragraph of
Sec. 31 of RA 6675 does not make said provision constitutionally infirm. Rather, it is the application of said provision that
can be challenged. Ergo, Sec. 31 of RA 6657 does not trench on the constitutional policy of ensuring control by the
farmers. (Emphasis supplied.)

In line with Our finding that control over agricultural lands must always be in the hands of the farmers, We reconsider our
ruling that the qualified FWBs should be given an option to remain as stockholders of HLI, inasmuch as these qualified
FWBs will never gain control given the present proportion of shareholdings in HLI.

A revisit of HLI’s Proposal for Stock Distribution under CARP and the Stock Distribution Option Agreement (SDOA) upon
which the proposal was based reveals that the total assets of HLI is PhP 590,554,220, while the value of the 4,915.7466
hectares is PhP 196,630,000. Consequently, the share of the farmer-beneficiaries in the HLI capital stock is 33.296%
(196,630,000 divided by 590,554.220); 118,391,976.85 HLI shares represent 33.296%. Thus, even if all the holders of the
118,391,976.85 HLI shares unanimously vote to remain as HLI stockholders, which is unlikely, control will never be placed
in the hands of the farmer-beneficiaries.1awp++i1 Control, of course, means the majority of 50% plus at least one share of
the common shares and other voting shares. Applying the formula to the HLI stockholdings, the number of shares that will
constitute the majority is 295,112,101 shares (590,554,220 divided by 2 plus one [1] HLI share). The 118,391,976.85
shares subject to the SDP approved by PARC substantially fall short of the 295,112,101 shares needed by the FWBs to
acquire control over HLI. Hence, control can NEVER be attained by the FWBs. There is even no assurance that 100% of
the 118,391,976.85 shares issued to the FWBs will all be voted in favor of staying in HLI, taking into account the previous
referendum among the farmers where said shares were not voted unanimously in favor of retaining the SDP. In light of the
foregoing consideration, the option to remain in HLI granted to the individual FWBs will have to be recalled and revoked.

Moreover, bearing in mind that with the revocation of the approval of the SDP, HLI will no longer be operating under SDP
and will only be treated as an ordinary private corporation; the FWBs who remain as stockholders of HLI will be treated as
ordinary stockholders and will no longer be under the protective mantle of RA 6657.

In addition to the foregoing, in view of the operative fact doctrine, all the benefits and homelots80 received by all the FWBs
shall be respected with no obligation to refund or return them, since, as We have mentioned in our July 5, 2011 Decision,
"the benefits x x x were received by the FWBs as farmhands in the agricultural enterprise of HLI and other fringe benefits
were granted to them pursuant to the existing collective bargaining agreement with Tadeco."

One last point, the HLI land shall be distributed only to the 6,296 original FWBs. The remaining 4,206 FWBs are not
entitled to any portion of the HLI land, because the rights to said land were vested only in the 6,296 original FWBs
pursuant to Sec. 22 of RA 6657.

In this regard, DAR shall verify the identities of the 6,296 original FWBs, consistent with its administrative prerogative to
identify and select the agrarian reform beneficiaries under RA 6657.81

WHEREFORE, the Motion for Partial Reconsideration dated July 20, 2011 filed by public respondents Presidential
Agrarian Reform Council and Department of Agrarian Reform, the Motion for Reconsideration dated July 19, 2011 filed by
private respondent Alyansa ng mga Manggagawang Bukid sa Hacienda Luisita, the Motion for Reconsideration dated July
21, 2011 filed by respondent-intervenor Farmworkers Agrarian Reform Movement, Inc., and the Motion for
Reconsideration dated July 22, 2011 filed by private respondents Rene Galang and AMBALA are PARTIALLY GRANTED
with respect to the option granted to the original farmworker-beneficiaries of Hacienda Luisita to remain with Hacienda
Luisita, Inc., which is hereby RECALLED and SET ASIDE. The Motion for Clarification and Partial Reconsideration dated
July 21, 2011 filed by petitioner HLI and the Motion for Reconsideration dated July 21, 2011 filed by private respondents
Noel Mallari, Julio Suniga, Supervisory Group of Hacienda Luisita, Inc. and Windsor Andaya are DENIED.

The fallo of the Court’s July 5, 2011 Decision is hereby amended and shall read:

PARC Resolution No. 2005-32-01 dated December 22, 2005 and Resolution No. 2006-34-01 dated May 3, 2006, placing
the lands subject of HLI’s SDP under compulsory coverage on mandated land acquisition scheme of the CARP, are
hereby AFFIRMED with the following modifications:

All salaries, benefits, the 3% of the gross sales of the production of the agricultural lands, the 3% share in the proceeds of
the sale of the 500-hectare converted land and the 80.51-hectare SCTEX lot and the homelots already received by the
10,502 FWBs composed of 6,296 original FWBs and the 4,206 non-qualified FWBs shall be respected with no obligation
to refund or return them. The 6,296 original FWBs shall forfeit and relinquish their rights over the HLI shares of stock
issued to them in favor of HLI. The HLI Corporate Secretary shall cancel the shares issued to the said FWBs and transfer
them to HLI in the stocks and transfer book, which transfers shall be exempt from taxes, fees and charges. The 4,206
non-qualified FWBs shall remain as stockholders of HLI.

DAR shall segregate from the HLI agricultural land with an area of 4,915.75 hectares subject of PARC’s SDP-approving
Resolution No. 89-12-2 the 500-hectare lot subject of the August 14, l996 Conversion Order and the 80.51-hectare lot
sold to, or acquired by, the government as part of the SCTEX complex. After the segregation process, as indicated, is
done, the remaining area shall be turned over to DAR for immediate land distribution to the original 6,296 FWBs or their
successors-in-interest which will be identified by the DAR. The 4,206 non-qualified FWBs are not entitled to any share in
the land to be distributed by DAR.1âwphi1
HLI is directed to pay the original 6,296 FWBs the consideration of PhP 500,000,000 received by it from Luisita Realty,
Inc. for the sale to the latter of 200 hectares out of the 500 hectares covered by the August 14, 1996 Conversion Order,
the consideration of PhP 750,000,000 received by its owned subsidiary, Centennary Holdings, Inc., for the sale of the
remaining 300 hectares of the aforementioned 500-hectare lot to Luisita Industrial Park Corporation, and the price of PhP
80,511,500 paid by the government through the Bases Conversion Development Authority for the sale of the 80.51-
hectare lot used for the construction of the SCTEX road network. From the total amount of PhP 1,330,511,500 (PhP
500,000,000 + PhP 750,000,000 + PhP 80,511,500 = PhP 1,330,511,500) shall be deducted the 3% of the proceeds of
said transfers that were paid to the FWBs, the taxes and expenses relating to the transfer of titles to the transferees, and
the expenditures incurred by HLI and Centennary Holdings, Inc. for legitimate corporate purposes. For this purpose, DAR
is ordered to engage the services of a reputable accounting firm approved by the parties to audit the books of HLI and
Centennary Holdings, Inc. to determine if the PhP 1,330,511,500 proceeds of the sale of the three (3) aforementioned lots
were actually used or spent for legitimate corporate purposes. Any unspent or unused balance and any disallowed
expenditures as determined by the audit shall be distributed to the 6,296 original FWBs.

HLI is entitled to just compensation for the agricultural land that will be transferred to DAR to be reckoned from November
21, 1989 which is the date of issuance of PARC Resolution No. 89-12-2. DAR and LBP are ordered to determine the
compensation due to HLI.

DAR shall submit a compliance report after six (6) months from finality of this judgment. It shall also submit, after
submission of the compliance report, quarterly reports on the execution of this judgment within the first 15 days after the
end of each quarter, until fully implemented.

The temporary restraining order is lifted.

SO ORDERED.

G.R. No. 148777               October 18, 2007

ESTATE OF THE LATE ENCARNACION VDA. DE PANLILIO, represented by GEORGE LIZARES, Petitioner,

vs.
GONZALO DIZON, RICARDO GUINTU, ROGELIO MUNOZ, ELISEO GUINTU, ROBERTO DIZON, EDILBERTO CATU,
HERMINIGILDO FLORES, CIPRIANO DIZON, JUANARIO MANIAGO, GORGONIO CANLAS, ANTONIO LISING,
CARLOS PINEDA, RENATO GOZUN, ALFREDO MERCADO, BIENVENIDO MACHADA, and the REGIONAL
DIRECTOR of the DEPARTMENT OF AGRARIAN REFORM, REGION III, Respondents.

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

G.R. No. 157598

REYNALDO VILLANUEVA, CENON GUINTO, CELESTINO DIZON, CARMELITA VDA. DE DAVID, FORTUNATO
TIMBANG, OSCAR SANTIAGO, CELESTINO ESGUERRA, ANTONIO DIZON, and TEODULO DIZON, Petitioners,
vs.
COURT OF APPEALS and GEORGE LIZARES, Respondents.

DECISION

VELASCO, JR., J.:

Did the owner of two (2) lots by a subsequent affidavit validly and legally revoke the first affidavit voluntarily surrendering
said lots for land acquisition under the Comprehensive Agrarian Reform Law? The answer will determine the rights of the
parties in the instant petitions––the heirs of the lot owner vis-à-vis the tenants declared to be beneficiaries of the
Operation Land Transfer (OLT) under Presidential Decree No. (PD) 27.1

The Case

Before us are two petitions. The first is a Petition for Review on Certiorari2 under Rule 45 docketed as G.R. No. 148777,
which seeks to set aside the November 29, 2000 Amended Decision3 of the Court of Appeals (CA) in CA-G.R. SP No.
47502, which affirmed the August 7, 1997 Decision4 of the Department of Agrarian Reform Adjudication Board (DARAB)
in DARAB Case Nos. 4558-4561; and the June 26, 2001 Resolution5 disregarding the Motion for Reconsideration6 of said
Amended Decision. The other is a Petition for Certiorari and Mandamus7 under Rule 65 docketed as G.R. No. 157598,
which seeks to set aside the November 14, 2002 CA Resolution8 which denied petitioners’ Motion for Entry of
Judgment,9 and the January 24, 2003 CA Resolution10 likewise denying petitioners’ Motion for Reconsideration.11

Through our August 27, 2003 Resolution,12 these cases were consolidated as they arose out of the same factual milieu.

The Facts

Encarnacion Vda. De Panlilio is the owner of the disputed landholdings over a vast tract of land, with an aggregate area of
115.41 hectares called Hacienda Masamat located in Masamat, Mexico, Pampanga covered by Transfer Certificates of
Title (TCT) Nos. 3510, 3513, 3514, 3515, 3522, 3523, 3524, 3525, 3526, 3528, 3530, 3531, 3532, 3533, RT-499 (9191),
and RT-500 (11670),13 all of the Pampanga Registry of Deeds.

On April 19, 1961, Panlilio entered into a contract of lease over the said landholdings with Paulina Mercado, wife of
Panlilio’s nephew. The contract of lease was subsequently renewed on October 13, 196414 and September 18,
1974,15 covering agricultural years from 1961 to 1979.

Sometime in 1973, pursuant to the OLT under PD 27, the Department of Agrarian Reform (DAR) issued thirty eight (38)
Certificates of Land Transfer (CLTs) to Panlilio’s tenants. The tenant-awardees were made defendants in the instant
consolidated complaints filed by petitioner Lizares.

On November 26, 1973, lessee Paulina Mercado filed a letter-complaint with the DAR questioning the issuance of CLTs to
Panlilio’s tenants, alleging, among others, that the DAR should not have issued the CLTs since the land involved was
principally being planted with sugar and was outside the coverage of PD 27. She claimed that respondents surreptitiously
planted palay (rice plant) instead of sugar in order to bring the land within the purview of the law. After proper
investigation, the DAR concluded that the CLTs were "properly and regularly issued."

Paulina Mercado likewise filed a similar complaint with the Court of Agrarian Relations (CAR) at San Fernando,
Pampanga, docketed as CAR Case No. 1649-P’74.

On December 4, 1976, the tenants of the portion of the land planted with sugar cane petitioned the DAR to cause the
reversion of their sugarland to riceland so that it may be covered by the Agrarian Reform Law. The petition was with the
conformity of Panlilio.

Thus, on January 12, 1977, Panlilio executed an Affidavit, partly quoted as follows:

1. That I am the owner of an agricultural landholding situated [in] Mexico, Pampanga, with an area of 115.4
hectares, more or less, dedicated at present to the production of palay and sugarcane crops;

2. That I have been informed that 50.22 hectares comprising the portion dedicated to palay crop have been
placed under the provisions and coverage of P.D. No. 27 and that Certificates of Land Transfer have been issued
to the tenant-farmers thereon;

3. That as owner of the abovementioned property, I interpose no objection to the action taken by the Department
of Agrarian Reform in placing the aforesaid portion dedicated to palay crop within the coverage of P.D. No. 27;

4. That lately, all the tenants of my said property including those in the sugarcane portions, have filed a petition
dated December 4, 1976 with the Honorable Secretary Conrado F. Estrella, Secretary of Agrarian Reform,
requesting for the reversion of the sugarcane portion of my property adverted to [the] palay land which is the
original classification of my entire subject property;

5. That the aforesaid petition dated December 4, 1976 of the tenants of my property which was filed with the DAR
carries my written conformity;

6. That it is my desire that my entire subject property which is referred to as Hacienda Masamat be placed under
the coverage of P.D. 27 without exception and that thereafter the same be sold to tenant-petitioners.16 (Emphasis
supplied.)
On January 20, 1977, by virtue of the said Affidavit, the DAR Secretary, through Director Gaudencio Besa, ordered
Director Severino Santiago, Regional Director of Region III, San Fernando, Pampanga, "to distribute all land transfer
certificates, in view of the desire of Encarnacion Vda. de Panlilio to place her property under the Land Transfer Program
of the government."

On the basis of the action of the DAR Secretary, the CAR, on March 17, 1978, issued an Order dismissing the complaint
of Paulina Mercado (lessee) in CAR Case No. 1649-P’74, thus:

With this development, the resolution of the principal issue in the instant case has become moot and academic, it being
already settled in the DAR proceedings the placement of the land in question under the land transfer program of the
government. Therefore, the instant case should be dismissed. Necessarily, all pending incidents should be deemed
disposed of. 17

On December 29, 1986, Panlilio died.

Thereafter, sometime in 1993, the DAR issued Emancipation Patents (EPs) to the following tenants of Panlilio:

EP Nos.
Hermenegildo Flores 690774
143627
Celestino Dizon 690960
683355
45390
Gonzalo Dizon 680524
Roberto Dizon 690758
Cipriano Dizon 45260
45256
Antonio Dizon 681072
Teodulo Dizon 45326
Juanario Maniago 143207
Celestino Esguerra 45265
45219
Florentino Lapuz 690759
45259
Gorgonio Canlas 143508
Carlos Pineda 197097
45254
Renato Gozun 143208
Romeo Pangilinan 475341
Jose Serrano 475340
Wenceslao Pangilinan 476572
Guillermo del Rosario 475339
Candido Timbang 143931
45262
45257
Arsenio Legaspi 4526618

Subsequently, in June 1994, the Bacolod City Regional Trial Court (RTC), Branch 49 appointed petitioner George Lizares
as executor of the estate of Panlilio.19 Records show that petitioner Lizares is the son of the late Jesus Lizares, Panlilio’s
administrator of Hacienda Masamat during her lifetime.
On February 28, 1994, petitioner Lizares filed his first complaint with the Provincial Agrarian Reform Adjudicator (PARAD),
Region III, San Fernando, Pampanga, docketed as DARAB Case No. 638 P’94,20 for annulment of coverage of
landholdings under PD 27 and ejectment against Reynaldo Villanueva, et al. who filed their Answer with Counterclaim21 on
April 12, 1994.

On April 10, 1995, petitioner filed with the PARAD three more complaints for cancellation of EPs, docketed as DARAB
Case Nos. 933-P’95,22 934-P’95,23 and 935-P’95,24 against the rest of respondents who filed their motions to dismiss25 on
grounds of lack of cause of action and lack of jurisdiction. On July 13, 1995, the PARAD denied the
motions.26 Respondents then filed their Answer with Counterclaim.27

Upon petitioner’s motion, all the cases were consolidated. The PARAD then directed the parties to submit their respective
position papers,28 and, thereafter, considered the cases submitted for decision.

The three (3) complaints filed in 1995 for cancellation of EPs have the following defendants: (1) in DARAB Case No. 933-
P’95, Herminigildo Flores and the Regional Director, DAR, Region III; (2) in DARAB Case No. 934-P’95, Celestino Dizon,
Gonzalo Dizon, Roberto Dizon, and the Regional Director, DAR, Region III; and (3) in DARAB Case No. 935-P’95,
Cipriano Dizon, Antonio Dizon, Teodulo Dizon, Juanario Maniago, Celestino Esguerra, Florentino Lapuz, Gorgonio
Canlas, Antonio Lising, Carlos Pineda, Renato Gozun, Alfredo Mercado, Romeo Pangilinan, Jose Serrano, Wenceslao
Pangilinan, Guillermo del Rosario, Candido Timbang, Bienvenido Mechada, and Arsenio Legaspi, and the Regional
Director, DAR, Region III.

Thus, aside from public respondent DAR Regional Director, Region III, DARAB Case No. 638-P’94 had 15 defendants,
DARAB Case No. 933-P’95 had a sole defendant, DARAB Case No. 934-P’95 had three defendants, and DARAB Case
No. 935-P’95 had 18 defendants. All the four (4) consolidated cases were against 37 defendants.

The Ruling of the PARAD in DARAB Case

Nos. 638-P’94, 933-P’95, 934-P’95 and 935-P’95

On November 14, 1995, the PARAD rendered a Joint Decision29 dismissing petitioner Lizares’ complaint on the ground
that the subject landholdings have been properly placed under the coverage of PD 27 through the January 12, 1977
Affidavit30 of Panlilio, unequivocally placing her entire property within the coverage of the OLT. In addition, the PARAD
relied on the report of the DAR and the Bureau of Lands personnel that the subject landholding is devoted to palay. And,
finally, the PARAD applied the equitable remedy of laches, in that Panlilio failed during her lifetime to bring to the attention
of the DAR and CAR her February 3, 1977 Affidavit31 ostensibly revoking her previous January 12, 1977 Affidavit.

The Ruling of the DARAB in DARAB Case Nos. 4558-4561

(DARAB Case Nos. 638-P’94, 933-P’95, 934-P’95 and 935-P’95)

Aggrieved, petitioner Lizares appealed the PARAD decision before the DARAB, which, on August 7, 1997, rendered a
Decision32 affirming the PARAD decision.

The DARAB likewise disregarded petitioner Lizares’ Motion for Reconsideration33 of the August 7, 1997 Decision.

Prior to the issuance of the August 7, 1997 DARAB Decision, petitioner Lizares and defendant-appellees Wenceslao
Pangilinan, Romeo Pangilinan, Jose Serrano, and Guillermo del Rosario filed their February 10, 1997 Joint Partial Motion
to Dismiss34 with the DARAB, seeking dismissal of their respective claims in DARAB Case No. 4561 (DARAB Case No.
935-P’95) based on an Affidavit of Cancellation of Lis Pendens Annotation of TCT Nos. 14321, 14322, 14323, and 14324,
all of the Pampanga Register of Deeds,35 which was executed by petitioner Lizares. Apparently, petitioner Lizares
received from a certain Ms. Petronila Catap the amount of PhP 1,356,619 for the settlement of DARAB Case No. 4561
(DARAB Case No. 935-P’95) against the abovementioned defendant-appellees.36

Earlier on, petitioner Lizares filed his April 19, 1996 Motion to Withdraw Appeal in favor of defendant-appellees Reynaldo
Villanueva, Cenon Guinto, Carmelita Vda. de David, Oscar Santiago, Celestino Dizon, Fortunato Timbang, and Florentino
Lapuz in DARAB Case No. 4558 (DARAB Case No. 638-P’94); defendant-appellee Celestino Dizon in DARAB Case No.
4559 (DARAB Case No. 933-P’95); and defendant-appellees Antonio Dizon, Teodulo Dizon, Celestino Esguerra,
Florentino Lapuz, and Candido Timbang in DARAB Case No. 4561 (DARAB Case No. 935-P’95), as said defendant-
appellees agreed to settle and compromise with petitioner Lizares. The motion was however resisted by other defendant-
appellees through a May 27, 1996 Counter-Motion to the Plaintiff-Appellant Motion to Withdraw Appeal,37 on the ground
that a piece-meal withdrawal is not proper as the matter in controversy is common and the same to all.
Unfortunately, the Motion to Withdraw Appeal was not resolved as petitioner Lizares did not attend the DARAB scheduled
hearings. Thus, the August 7, 1997 Decision was subsequently promulgated in favor of all defendant-appellees.

Petitioner Lizares elevated the DARAB consolidated cases to the CA for review in CA-G.R. SP No. 47502 under Rule 43
of the Rules of Court.

The Ruling of the Court of Appeals

The April 11, 2000 CA Decision

At the outset, the CA saw it differently.

On April 11, 2000, the CA rendered a Decision sustaining petitioner’s position and granted relief, thus:

WHEREFORE, the petition is GRANTED. The decision of the Department of Agrarian Reform Adjudication Board
affirming the decision of the Provincial Agrarian Reform Adjudication Board, Region III, San Fernando, Pampanga is
REVERSED and SET ASIDE. The Certificates of Land Transfer issued to private respondents insofar as they pertain to
sugarlands are hereby declared NULL and VOID.38

The CA primarily anchored its ruling on Panlilio’s February 3, 1977 Affidavit ostensibly revoking her January 12, 1977
Affidavit and ascribed error to both the PARAD and DARAB in ignoring Panlilio’s second affidavit. Moreover, it relied on
the November 26, 1973 letter-complaint of Paulina Mercado to the DAR Secretary and the CAR Resolution in CAR Case
No. 1649-P’74, that the subject landholding in question is principally devoted to the production of sugar cane as
buttressed by the report and findings of Atty. Gregorio D. Sapera, Legal Officer III of the DAR Central Office.

The November 29, 2000 CA Amended Decision

Unconvinced, Reynaldo Villanueva, et al. interposed a Motion for Reconsideration or in the alternative, Motion to Remand
for New Trial39 of said Decision, where they contended that:

1. Petitioner’s complaints should have been dismissed for his failure to implead therein indispensable parties,
namely the Land Bank of the Philippines which paid Panlilio the amortizations on the land and the third persons
who purchased the landholdings from the tenants;

2. [The CA] disturbed and reversed the findings of fact by the PARAD and the DARAB supported by substantial
evidence. x x x

3. It is not the job of the appellate court to sieve through the evidence considered by the administrative agency in
adjudicating the case before it, following the doctrine of primary jurisdiction. x x x

4. [The CA] violated the principle of res judicata in reversing the CAR resolution dismissing the complaint in Case
No. 1649-P’74 rendered twenty-two years ago. Likewise, estoppel and laches bar the instant actions. x x x

5. Lastly, the petition should be dismissed in favor of Romeo Pangilinan, Wenceslao Pangilinan, Jose Serrano
and Guillermo del Rosario in view of the compromise agreement in DARAB Case No. 4561 between them and
petitioner herein. They submitted, as proof, their joint motion to dismiss the complaint executed on February 10,
1997 and petitioner Lizares’ receipt from them of P1,356,619.00 as consideration for the dismissal of his
complaints against them.40

After considering the above contentions together with petitioner Lizares’ Comment on the Motion for Reconsideration
dated May 2, 2000 with Motion for Correction of the Dispositive Portion of the Decision,41 respondents’ Reply42 to said
comment, and petitioner’s Rejoinder,43 the appellate court rendered on November 29, 2000 the assailed Amended
Decision on a vote of 3-2, the dispositive portion of which reads:

WHEREFORE, respondents’ motion for reconsideration of Our Decision is hereby GRANTED. The petition is ordered
DISMISSED and the challenged DARAB decision is AFFIRMED. Costs against petitioner.44

In reversing its earlier April 11, 2000 Decision, the CA concluded that the February 3, 1977 Affidavit was not executed by
Panlilio, ratiocinating that if she indeed made the second affidavit which purportedly repudiated her earlier January 12,
1977 Affidavit, the natural course of action to take was for her to submit the second affidavit to the DAR to exclude the
majority of her landholdings planted with sugar cane from the coverage of the OLT under PD 27. Her failure to effectuate
the removal of her land from the Comprehensive Agrarian Reform Program (CARP) coverage for nine (9) years until her
death on December 29, 1986 led the court a quo to believe that the second affidavit was not genuine. Moreover, Jesus
Lizares, Panlilio’s administrator and father of petitioner Lizares, likewise did not take any action, in accordance with the
second affidavit showing that he was not aware of such affidavit of revocation. The CA even doubted petitioner Lizares’
contention that the second affidavit was submitted to the DAR and CAR but was not acted upon for such averment was
not substantiated.

The appellate court also found Panlilio and her successors-in-interest guilty of laches, pointing out that aside from the
alleged second affidavit of revocation, there was no indication of Panlilio’s intention to recover the disputed landholdings.

On the issue of fraud and collusion on the part of the DAR personnel, the CA found that no preponderance of evidence
was evinced to prove the accusation.

In fine, the CA recognized and applied the principle of res judicata to the March 17, 1978 CAR Order rendered more than
20 years ago, holding that the resolution of said court placing the entire landholdings in question under the coverage of
PD 27 had long become final and executory.

Petitioner Lizares’ plea for recall of the assailed Amended Decision was rejected through the assailed June 26, 2001 CA
Resolution.45

Petition for review on certiorari under G.R. No. 148777

Thus, we have this Petition for Review on Certiorari against only 15 private respondents from the original defendants
below, namely: Gonzalo Dizon, Ricardo Guintu, Rogelio Munoz, Eliseo Guintu, Roberto Dizon, Edilberto Catu,
Herminigildo Flores, Cipriano Dizon, Juanario Maniago, Gorgonio Canlas, Antonio Lising, Carlos Pineda, Renato Gozun,
Alfredo Mercado, and Bienvenido Machada.

Petition for certiorari under G.R. No. 157598

Consequent to the filing of the Petition for Review on Certiorari by petitioner Lizares, on January 28, 2002, the other
original defendants in the consolidated cases before the PARAD and DARAB, who were not made respondents in G.R.
No. 148777, namely: Reynaldo Villanueva, Cenon Guinto, Celestino Dizon, Carmelita Vda. de David, Florentino Lapuz,
Fortunato Timbang, Oscar Santiago, Candido Timbang, Celestino Esguerra, Antonio Dizon, and Teodulo Dizon, filed
before the CA a Motion for Entry of Judgment46 of the November 29, 2000 Amended Decision in CA-G.R. SP No. 47502
based on the out-of-court settlement during the pendency of the case. On July 4, 2002, a second Motion for Entry of
Judgment47 with the same averments was filed reiterating their plea for execution.

The November 14, 2002 CA Resolution48 denied their motions for entry of judgment. A Motion for
Reconsideration49 having been turned down through the January 24, 2003 CA Resolution,50 petitioners now register the
instant Petition for Certiorari and Mandamus in G.R. No. 157598, assailing the aforesaid Resolutions for grave abuse of
discretion.

The Issues

In G.R. No. 148777, petitioner Lizares presents the following issues for our consideration:

1. Whether or not in its 29 November 2000 Amended Decision, the Court of Appeals erred gravely in reversing its
ruling in the 11 April 2000 Decision on the import and significance of the second affidavit executed by
Encarnacion L. Vda. de Panlilio revoking or repudiating her first affidavit (by which she purportedly agreed to have
her land at Hacienda Masamat, which was dedicated to sugarcane, placed under the coverage of P.D. No. 27);

2. Whether or not in its 29 November 2000 Amended Decision, the Court of Appeals erred gravely in setting aside
the 11 April 2000 Decision’s ruling that the land in question being planted with sugarcane is not covered by P.D.
No. 27, by instead declaring that "the fact that land is sugarland has become inconsequential to the coverage
under P.D. No. 27 in the light of the affidavit dated January 12, 1977";

3. Whether or not in its 29 November 2000 Amended Decision, the Court of Appeals erred gravely in finding
Encarnacion L. Vda. de Panlilio and petitioner guilty of laches or estoppel;
 4. Whether or not res judicata applies in the instant case;

5. Whether or not in its 29 November 2000 Amended Decision, the Court of Appeals erred gravely in failing to rule
that there was fraud and collusion on the part of the respondents in the coverage of the subject parcels of land;

6. Whether or not the Court of Appeals acted with grave abuse of discretion in declaring the transfer made by the
private respondents to third persons valid;

7. Whether or not forum-shopping or a false certification of non-forum shopping [is present] here; and

8. Whether or not the instant petition complies with the nature and requisites of an appeal by certiorari under Rule
45.51

In G.R. No. 157598, petitioners raise the sole issue of "whether the petitioners are entitled to an entry of judgment."52

The Court’s Ruling

G.R. No. 148777

Before we go to the substantial issues, we tackle first the procedural issues raised in the last two issues in G.R. No.
148777 on whether the instant petition complies with the requirements of Rule 45 and whether forum shopping is present.

Petition complied with requisites for review on certiorari

Private respondents contend that the grounds relied upon by petitioner are factual in nature and thus outside the purview
of a review on certiorari by this Court. Petitioner disagrees and posits that the petition raises issues of both fact and law
which are so intimately intertwined and that issues of law permeate the controversy between the parties.

We find for petitioner. The rule is clear––questions of facts are proscribed by Rule 45. A question of law exists when the
doubt or controversy concerns the correct application of law or jurisprudence to a certain set of facts; or when the issue
does not call for an examination of the probative value of the evidence presented, the truth or falsehood of facts being
admitted. A question of fact exists when the doubt or difference arises as to the truth or falsehood of facts or when the
query invites calibration of the whole evidence considering mainly the credibility of the witnesses, the existence and
relevancy of specific surrounding circumstances, as well as their relation to each other and to the whole, and the
probability of the situation.53

The rule is subject to exceptions. One such exception exists in this case. Mixed questions of law and facts are raised
pertaining to the applicability of PD 27 on a large portion of subject landholdings that were planted with sugar cane, which
would have been otherwise exempt, but were voluntary waived through an affidavit by the lot owner to be placed under
the OLT pursuant to said law; the import and significance of the purported affidavit of revocation; and, the interpretation of
Executive Order No. (EO) 22854 in relation to subsequent land transfer made by the farmer-beneficiaries.

At the very least, the instant petition complies with the requisites of Rule 45, particularly Section 6, as we have given the
instant petition due course.55

No forum shopping

Private respondents argue that petitioner Lizares is guilty of forum shopping for having pursued other civil cases allegedly
involving the same subject matter and on the same grounds raised in this petition. Petitioner Lizares counters that there is
no forum shopping, first, as the instant petition is a mere continuation of a pending action, that is, the consolidated cases
filed with the PARAD; second, the causes of action and issues raised in the other civil cases lodged with the RTC were
different.

Respondents’ postulation cannot be entertained.

Private respondents failed to furnish us copies of portions of the relevant records of the other civil cases instituted by
petitioner Lizares needed to determine the existence of forum shopping. Absent such necessary pleadings, we are
constrained to take petitioner’s assertion at face value that the other cases, particularly Civil Case Nos. 11342, 11344,
11345, 11346 and 11347, filed before the RTC differ from the instant case as to the issues raised, the reliefs prayed for,
and the parties impleaded.

Time and again, the court has reminded prospective petitioners and lawyers alike that it is necessary that they attach to
the petition under Rule 45 all the material portions of the case records of the lower courts or quasi-judicial bodies which at
one time or another had adjudicated the case or complaint. These documents are required to support the grounds
presented in the petition under Rule 45.56 Any decision, order, pleading, or document forming parts of the records that is
relevant or important to the petition should be appended to it so that the court, in reviewing the petition, will have easy
access to these papers. More importantly, the submission will obviate delay as the court can readily decide the petition
without need of the elevation of the records of the court or quasi-judicial body a quo.

Now we move on to the substantive issues.

Main Issue: Genuineness and authenticity

of the February 3, 1977 Affidavit

The pith of the dispute is whether or not the February 3, 1977 affidavit of the lot owner, the late Encarnacion Vda. de
Panlilio, is genuine or authentic.

We rule in the negative.

In a slew of cases, the principle is firmly entrenched in this jurisdiction that this Court is not a trier of facts, and is not
tasked to calibrate and assess the probative weight of evidence adduced by the parties during trial all over
again.57 However, in rare occasions, exceptions are allowed. One exception is when there are competing factual findings
by the different triers of fact, such as those made by the quasi-agencies on the one hand and the CA on the other, this
Court is compelled to go over the records of the case, as well as the submissions of the parties, and resolve the factual
issues.58 In this case, however, there is coalescence in the findings of the appellate court with that of the two quasi-judicial
agencies below––the PARAD and DARAB––on the issue of the authenticity of the second Panlilio Affidavit.

It being a question of fact, we find no reason to disturb the findings and conclusions of the court a quo in its questioned
November 29, 2000 Amended Decision holding that the challenged February 3, 1977 Panlilio Affidavit is not an authentic
document. We quote with approval the factual findings of the CA which completely gave full accord and affirmed the
findings of the PARAD and DARAB, viz:

After assessing the grounds raised by respondents in their motion for reconsideration and a meticulous review of the
records, We are now in serious doubts as to the correctness of Our Decision. Our reasons are:

First, according to petitioner Lizares, Panlilio’s second affidavit (revoking her first affidavit) upon which this Court anchors
its assailed Decision, was executed as early as February 2, 1977. If it were true, Panlilio’s natural reaction was to submit
her second affidavit or affidavit of revocation to the DAR in order to exclude her landholdings from the coverage of the
Operation Land Transfer under P.D. 27. Significantly, Panlilio died on December 29, 1986. She had therefore, nine (9)
years from the date of execution of her second affidavit, within which to have her land excluded by the DAR from such
coverage considering that it was principally planted [with] sugar and that she was misled by DAR lawyer, Atty. Pepito
Sanchez, into signing her first affidavit. But she did not. Petitioner’s father, Jesus Lizares, was her administrator. Yet he
did not also take any action for apparently he was not aware of such affidavit of revocation.

Moreover, in her second affidavit, Panlilio specifically stated:

"That another reason for my desire not to place my entire property referred to as Hacienda Masamat in Mexico,
Pampanga, under P.D. 27 is the fact that the said Hacienda Masamat is leased to my nephew’s wife, Mrs. Paulina Y.
Mercado, and the lease contract I executed in her favor covering my said Hacienda Masamat is still subsisting and in
force and will expire only after the agricultural crop year 1978-1979;"

If Panlilio indeed signed her affidavit of revocation, why did she not inform her niece Paulina about it in order to protect her
right as a lessee? It must be remembered that at that time, the latter’s complaints (for cancellation of CLTs) against the
tenants of Panlilio were still pending in the DAR and the CAR. Had Panlilio given Paulina a copy of such second affidavit,
she could have brought it to the attention of the CAR and the DAR. Certainly, the subject landholdings could not have
been placed entirely under Operation Land Transfer. We need not emphasize here that being a lessee, Paulina would not
want to part with her Aunt’s landholdings.
Out of the blue, the second affidavit surfaced only in 1994 and 1995 when petitioner Lizares brought the instant actions
against Panlilio’s tenants or after eighteen (18) years from the date of its alleged execution. At this juncture, We can only
conclude without hesitation that Panlilio did not execute the second affidavit.

Petitioner alleged in his position paper that the same affidavit of revocation was submitted to the DAR and the CAR, but
they were not acted upon because of the dismissal of the cases for cancellation of CLTs filed by Paulina Mercado.
Petitioner’s claim is a mere allegation. It has not been substantiated. Again, if it were true, why did Panlilio and Paulina fail
to pursue any further action?59

We respect and accord finality to the aforequoted findings of facts of the CA, being the tribunal tasked to undertake a final
review of the facts of the case subject of course to certain tolerated exceptional situations. Once again we reiterate the
prevailing rule that the findings of fact of the trial court, particularly when affirmed by the Court of Appeals are binding
upon this Court.60

Second Issue: There is valid waiver through

the January 12, 1977 Affidavit

The CA likewise did not err in reversing its April 11, 2000 Decision that the subject land was properly covered by PD 27
since Panlilio surrendered said lot to the DAR for coverage under PD 27 pursuant to her January 12, 1977 Affidavit. The
non-existence of the February 3, 1977 Affidavit supports the inclusion of the entire lot in the CARP of the Government.

On the other hand, petitioner Lizares argues that there was no valid waiver under PD 27.

We are not convinced.

Considering the non-revocation of the January 12, 1977 Panlilio Affidavit,, the CA considered the land of Panlilio planted
with sugar cane as falling under the coverage of PD 27, thus:

[W]hile the proceedings in the CAR tend to establish the land as principally sugarland, hence outside the coverage of P.D.
27, still, Panlilio’s consent to have the entire land covered by the said law as alleged in her first affidavit, cannot be
construed as a violation of its provisions. In fact, in executing the said affidavit, she did not defeat, nor contravene the
express intent of the law to emancipate her tenants from the bondage of the soil. In doing so, she even supported its
implementation.

In Our challenged Decision We found that the subject land was principally planted [with] sugar and therefore outside the
pale of P.D. 27. But We overlooked the fact that Panlilio in her first affidavit, which was not validly revoked, expressed her
desire to have her entire landholdings placed within the coverage of Operation Land Transfer. To be sure, the fact that
Panlilio’s land is sugarland has become inconsequential in the light of her first affidavit.61

We agree with the CA.

While PD 27 clearly applies to private agricultural lands primarily devoted to rice and corn under a system of sharecrop or
lease-tenancy, whether classified as landed estate or not, it does not preclude nor prohibit the disposition of landholdings
planted with other crops to the tenants by express will of the landowner under PD 27.

In the instant case, a large portion of Hacienda Masamat with an aggregate area of 115.41 hectares was planted with
sugar cane. It is undisputed, as was duly shown in the January 12, 1977 Panlilio Affidavit, that only 50.22 hectares were
planted with palay. Thus, approximately 65.19 hectares of the subject landholdings were planted with sugar cane aside
from the portions used for the residences of the tenants and planted with crops for their daily sustenance. Needless to
say, with the January 12, 1977 Panlilio Affidavit, she expressed her intent to include the 65.19 hectares to be placed
under the OLT pursuant to PD 27 in favor of her tenants which otherwise would have been exempt. Indeed, waiver or an
intentional and voluntary surrender of a right can give rise to a valid title or ownership of a property in favor of another
under Article 6 of the Civil Code. Thus, such disposition through the OLT pursuant to PD 27 is indeed legal and proper
and no irregularity can be attributed to the DAR which merely relied on the January 12, 1977 Panlilio Affidavit.

Third Issue: Equitable remedy of laches

The court a quo correctly ruled that Panlilio and her successors-in-interest are bound by the coverage of the lot under PD
27 by reason of laches.
Even granting arguendo that the February 3, 1977 Affidavit of revocation is genuine and was furnished both the DAR and
the CAR, still, no relief can be accorded petitioner Lizares on account of laches.

Laches and its elements

Delay for a prolonged period of time can result in loss of rights and actions. The equitable defense of laches does not
even concern itself with the character of the defendant’s title, but only with plaintiff’s long inaction or inexcusable neglect
to bar the latter’s action as it would be inequitable and unjust to the defendant.

According to settled jurisprudence, "laches" means "the failure or neglect, for an unreasonable and unexplained length of
time, to do that which—by the exercise of due diligence—could or should have been done earlier."62 Verily, laches serves
to deprive a party guilty of it of any judicial remedies. Its elements are: (1) conduct on the part of the defendant, or of one
under whom the defendant claims, giving rise to the situation which the complaint seeks a remedy; (2) delay in asserting
the complainant’s rights, the complainant having had knowledge or notice of the defendant’s conduct as having been
afforded an opportunity to institute a suit; (3) lack of knowledge or notice on the part of the defendant that the complainant
would assert the right in which the defendant bases the suit; and (4) injury or prejudice to the defendant in the event relief
is accorded to the complainant, or the suit is not held barred.63

In Santiago v. Court of Appeals, we explained that there is "no absolute rule as to what constitutes laches or staleness of
demand; each case is to be determined according to its particular circumstances."64

Laches has set in

The records demonstrate clear signs of laches. The first element is undisputed. Panlilio’s erstwhile tenants were issued
CLTs sometime in 1973 and subsequently EPs in 1993. CAR Case No. 1649-P’74 filed by Panlilio’s lessee, Paulina
Mercado, was dismissed with finality on March 17, 1978 as no appeal was pursued. Since then, Panlilio and her
administrator for the subject landholdings in Hacienda Masamat, Jesus Lizares, did not take any action to revoke the
CLTs. With the dismissal of the land case in 1978, with finality, the possession of the tenants of Panlilio was fully
recognized by her and her successors-in-interest.

It cannot be disputed that Panlilio’s tenants, the private respondents, occupied portions of the subject landholdings in an
open, continuous, and adverse manner in the concept of owners from 1978 until 1994 and 1995 when the subject cases
were instituted by petitioner Lizares or for more than sixteen (16) years. Private respondents’ possession of said portions
for a lengthy period of time gave cause to petitioner to complain and take legal steps to protect Panlilio’s rights of
ownership and title over the disputed lot. No such action was taken.

Likewise, the second element of laches is amply shown. Panlilio and her successors-in-interest did not take any
administrative or judicial action to protect her rights for more than 16 years.

As it is, if Panlilio indeed executed the affidavit of revocation in February 3, 1977, why did she not pursue any action to
implement her affidavit disregarding her January 12, 1977 Affidavit? Indeed, Panlilio, during her lifetime, did not lift a
finger to regain her land. After she died on December 29, 1986, Jesus Lizares, her administrator for Hacienda Masamat,
likewise did not initiate any legal action to effectuate her alleged wish. Unfortunately for petitioner Lizares, the cases
initiated by him in 1994 and 1995 were belatedly filed and much delay had transpired which proved to be prejudicial to his
interests.

Anent the third element, private respondents did not know nor anticipate that their possession, occupancy, and ownership
of the subject landholdings after 16 years would still be questioned. In fact, private respondents did not only continue
tilling the land, but later on had conveyed their lots to innocent third parties for value. Moreover, we take judicial notice
that numerous commercial buildings, residential houses, and a large mall stand on major portions of former Hacienda
Masamat. In fact, the subject landholdings are now much different from what they were more than two decades ago.
Thus, after more than sixteen (16) years of unquestioned, peaceful, and uninterrupted possession, private respondents
did not expect that petitioner Lizares would still assert any right over the landholdings after the lapse of such a long period
of occupation.

Finally, grave prejudice and serious damage would befall private respondents, in general, who relied on their CLTs and
EPs, and subsequent purchasers for value of the lots forming parts of the former hacienda who relied on private
respondents’ titles if the complaints of petitioner were not barred. As a matter of fact, some buyers not impleaded in the
instant case opted to settle out-of-court with petitioner Lizares rather than be disturbed in their possession and their right
of ownership.
Considering the foregoing discussion, we uphold the finding of laches. Verily, it would be a grave injustice if private
respondents and the subsequent purchasers for value would now be made to suffer after petitioner Lizares and his
predecessors-in-interest had slept on their rights for more than 16 years.

Fourth Issue: Principle of res judicata inapplicable

Private respondents contend that the dismissal in CAR Case No. 1649-P’74 constitutes res judicata over the instant case.
CAR Case No. 1649-P’74 involved Panlilio’s lessee against private respondents with the issue of the crops being planted
on subject landholdings, while the instant case involves Panlilio’s successor-in-interest petitioner Lizares against private
respondents involving the issue of the alleged affidavit of revocation.

The reliance on res judicata is misplaced.

Res judicata, either in the concept of bar by former judgment or conclusiveness of judgment, cannot be applied to the
present case.

In Vda. de Cruzo v. Carriaga, Jr., we discussed the doctrine of res judicata, as follows:

The doctrine of res judicata thus lays down two main rules which may be stated as follows: 1) The judgment or decree of
a court of competent jurisdiction on the merits concludes the parties and their privies to the litigation and constitutes a bar
to a new action or suit involving the same cause of action either before the same or any other tribunal; and 2) Any right,
fact, or matter in issue directly adjudicated or necessarily involved in the determination of an action before a competent
court in which a judgment or decree is rendered on the merits is conclusively settled by the judgment therein and cannot
again be litigated between the parties and their privies whether or not the claim or demand, purpose or subject matter of
the two suits is the same. These two main rules mark the distinction between the principles governing the two typical
cases in which a judgment may operate as evidence. In speaking of these cases, the first general rule above stated, and
which corresponds to the aforequoted paragraph (b) of Section 49, is referred to as "bar by former judgment" while the
second general rule, which is embodied in paragraph (c) of the same section, is known as "conclusiveness of judgment."

Stated otherwise, when we speak of res judicata in its concept as a "bar by former judgment," the judgment rendered in
the first case is an absolute bar to the subsequent action since said judgment is conclusive not only as to the matters
offered and received to sustain that judgment but also as to any other matter which might have been offered for that
purpose and which could have been adjudged therein. This is the concept in which the term res judicata is more
commonly and generally used and in which it is understood as the bar by prior judgment constituting a ground for a
motion to dismiss in civil cases.

On the other hand, the less familiar concept or less terminological usage of res judicata as a rule on conclusiveness of
judgment refers to the situation where the judgment in the prior action operates as an estoppel only as to the matters
actually determined therein or which were necessarily included therein. Consequently, since other admissible and relevant
matters which the parties in the second action could properly offer are not concluded by the said judgment, the same is
not a bar to or a ground for dismissal of the second action.

At bottom, the other elements being virtually the same, the fundamental difference between the rule of res judicata as a
bar by former judgment and as merely a rule on the conclusiveness of judgment is that, in the first, there is an identity in
the cause of action in both cases involved whereas, in the second, the cause of action in the first case is different from
that in the second case.65

Premised on the foregoing disquisition, the principle of res judicata requires the concurrence of the following requisites:

a) The former judgment or order must be final;

b) It must be a judgment or order on the merits, that is, it was rendered after a consideration of the evidence or
stipulations submitted by the parties at the trial of the case;

c) It must have been rendered by a court having jurisdiction over the subject matter and the parties; and

d) There must be, between the first and second actions, identity of parties, of subject matter and of cause of
action. This requisite is satisfied if the two actions are substantially between the same parties.66
For want of the fourth requisite that there must be, between the first and second actions, identity of parties, subject matter,
and cause of action, the instant case is thus removed from the operation of the principle of res judicata. Stated differently,
there is no identity of parties and issues in CAR Case No. 1649-P’74 and the instant case.

Nevertheless, while res judicata is not applicable in the instant case, still, it will not accord legal relief to petitioner with
respect to his claim of ownership over the lots in dispute.

Fifth Issue: Fraud and collusion not proven

Petitioner Lizares accuses the DAR personnel and private respondents of fraud and collusion. Absent any proof, such
allegation falls flat.

In the recent case of Heirs of Cipriano Reyes v. Calumpang, we elucidated on this same issue of the required evidential
proof, thus:

Basic is the rule of actori incumbit onus probandi, or the burden of proof lies with the plaintiff. Differently stated, upon the
plaintiff in a civil case, the burden of proof never parts. In the case at bar, petitioners must therefore establish their case
by a preponderance of evidence, that is, evidence that has greater weight, or is more convincing than that which is offered
in opposition to it––which petitioners utterly failed to do so. Besides, it is an age-old rule in civil cases that one who
alleges a fact has the burden of proving it and a mere allegation is not evidence. Fraud is never presumed, but must be
established by clear and convincing evidence. Thus, by admitting that Victorino, Luis, and Jovito, all surnamed Reyes,
indeed executed the Deed of Quitclaim coupled with the absence of evidence substantiating fraud and mistake in its
execution, we are constrained to uphold the appellate court’s conclusion that the execution of the Deed of Quitclaim was
valid.67

Hence, we uphold the CA’s pronouncement that there was no collusion and fraud especially considering that no clear and
convincing evidence was presented to overwhelm and rebut the presumption that official duty has been regularly
performed68 by the DAR personnel.

Sixth Issue: Subsequent transfers valid only

to qualified farmer-beneficiaries

Petitioner Lizares asseverates that ownership of lands granted to tenant-farmers under PD 27 may not be transferred or
conveyed to third parties except by hereditary succession or to the Government. He contends that the CA committed
grave abuse of discretion in declaring the sale of the land by private respondents Gonzalo Dizon, et al. to third persons
valid. The CA ratiocinated that EO 228 was enacted after PD 27 and since EO 228 is a later law, it will prevail over PD 27.
Thus, the ownership of the lot may now be transferred to persons other than the heirs of the beneficiary or the
Government.

Petitioner is correct.

EO 228 not inconsistent with PD 27 on prohibition of transfers

The prohibition in PD 27, the Tenants Emancipation Decree, which took effect on October 21, 1972, states that "[t]itle to
land acquired pursuant to this Decree or the Land Reform Program of the Government shall not be transferable except by
hereditary succession or to the Government in accordance with the provisions of this Decree, the Code of Agrarian
Reforms and other existing laws and regulations (emphasis supplied)."

Hereditary succession means succession by intestate succession or by will to the compulsory heirs under the Civil Code,
but does not pertain to testamentary succession to other persons. "Government" means the DAR through the Land Bank
of the Philippines which has superior lien by virtue of mortgages in its favor.

Thus, PD 27 is clear that after full payment and title to the land is acquired, the land shall not be transferred except to the
heirs of the beneficiary or the Government. If the amortizations for the land have not yet been paid, then there can be no
transfer to anybody since the lot is still owned by the Government. The prohibition against transfers to persons other than
the heirs of other qualified beneficiaries stems from the policy of the Government to develop generations of farmers to
attain its avowed goal to have an adequate and sustained agricultural production. With certitude, such objective will not
see the light of day if lands covered by agrarian reform can easily be converted for non-agricultural purposes.
On the other hand, Sec. 6 of EO 228 provides, thus:

Sec. 6 The total cost of the land including interest at the rate of six percent (6%) per annum with a two percent (2%)
interest rebate for amortizations paid on times, shall be paid by the farmer-beneficiary or his heirs to the Land Bank over a
period of up to twenty (20) years in twenty (20) equal annual amortizations. Lands already valued and financed by Land
Bank are likewise extended a 20-year period of payment of twenty (20) equal annual amortizations. However, the farmer-
beneficiary if he so elects, may pay in full before the twentieth year or may request the Land Bank to structure a
repayment period of less than twenty (20) years if the amount to amount to be financed and the corresponding annual
obligations are well within the farmer’s capacity to meet. Ownership of lands acquired by farmer-beneficiary may be
transferred after full payment of amortizations. (Emphasis supplied.)

The CA highlighted and made much of the last sentence of Sec. 6 which authorizes the transfer of the ownership of the
lands acquired by the farmer-beneficiary after full payment of amortizations. It construed said provision to mean that the
farmer-beneficiary can sell the land even to a non-qualified person.

This is incorrect.

First of all, the provision in question is silent as to who can be the transferees of the land acquired through the CARP. The
rule in statutory construction is that statutes in pari materia should be construed together and harmonized.69 Since there
appears to be no irreconcilable conflict between PD 27 and Sec. 6 of EO 228, then the two (2) provisions can be made
compatible by maintaining the rule in PD 27 that lands acquired under said decree can only be transferred to the heirs of
the original beneficiary or to the Government. Second, PD 27 is the specific law on agrarian reform while EO 228 was
issued principally to implement PD 27. This can easily be inferred from EO 228 which provided for the mode of valuation
of lands subject of PD 27 and the manner of payment by the farmer-beneficiary and mode of compensation to the land
owner. Third, implied repeals are not favored. A perusal of the aforequoted Sec. 6 of EO 228 readily reveals that it confers
upon the beneficiary the privilege of paying the value of the land on a twenty (20)-year annual amortization plan at six
percent (6%) interest per annum. He may elect to pay in full the installments or have the payment plan restructured. Said
provision concludes by saying that after full payment, ownership of the land may already be transferred. Thus, it is plain to
see that Sec. 6 principally deals with payment of amortization and not on who qualify as legal transferees of lands
acquired under PD 27. Since there is no incompatibility between PD 27 and EO 228 on the qualified transferees of land
acquired under PD 27, ergo, the lands acquired under said law can only be transferred to the heirs of the beneficiary or to
the Government for eventual transfer to qualified beneficiaries by the DAR pursuant to the explicit proscription in PD 27.

Thus, the alleged transfers made by private respondents in G.R. No. 148777 of lands acquired under PD 27 to non-
qualified persons are illegal and null and void.70

The ruling in Victorino Torres v. Leon Ventura sheds light on the policy behind the prohibition, thus:

The law is clear and leaves no room for doubt. Upon the promulgation of Presidential Decree No. 27 on October 21, 1972,
petitioner was DEEMED OWNER of the land in question. As of that date, he was declared emancipated from the bondage
of the soil. As such, he gained the rights to possess, cultivate, and enjoy the landholding for himself. Those rights over
that particular property were granted by the government to him and to no other. To insure his continued possession and
enjoyment of the property, he could not, under the law, make any valid form of transfer except to the government or by
hereditary succession, to his successors.71

In addition, the prohibition was expanded not only to cover the title issued to the tenant-farmer but also the rights and
interests of the farmer in the land while he is still paying the amortizations on it. A contrary ruling would make the farmer
an "easy prey to those who would like to tempt [him/her] with cash in exchange for inchoate title over the same," and PD
27 could be easily circumvented and the title shall eventually be acquired by non-tillers of the soil.72

Anent the contravention of the prohibition under PD 27, we ruled in Siacor v. Gigantana73 and more recently in Caliwag-
Carmona v. Court of Appeals,74 that sales or transfers of lands made in violation of PD 27 and EO 228 in favor of persons
other than the Government by other legal means or to the farmer’s successor by hereditary succession are null and void.
The prohibition even extends to the surrender of the land to the former landowner. The sales or transfers are void ab
initio, being contrary to law and public policy under Art. 5 of the Civil Code that "acts executed against the provisions of
mandatory or prohibiting laws shall be void x x x." In this regard, the DAR is duty-bound to take appropriate measures to
annul the illegal transfers and recover the land unlawfully conveyed to non-qualified persons for disposition to qualified
beneficiaries. In the case at bar, the alleged transfers made by some if not all of respondents Gonzalo Dizon, et al. (G.R.
No. 148777) of lands covered by PD 27 to non-qualified persons are illegal and null and void.
G.R. No. 157598

Finally, we resolve the sole issue raised in G.R. No. 157598 on whether petitioners Reynaldo Villanueva, et al. are entitled
to a partial entry of judgment of the Amended Decision in CA-G.R. SP No. 47502.

Petitioners in G.R. No. 157598 are not entitled to a partial entry of judgment in CA-G.R. SP No. 47502

Petitioners contend that they are entitled to a partial entry of judgment in CA-G.R. SP No. 47502 as respondent George
Lizares in G.R. No. 148777 deliberately excluded them on account of the amicable settlement concluded between them.
Thus, they contend that any judgment rendered by the Court in G.R. No. 148777 will not affect them. In gist, petitioners
strongly assert that the Amended Decision in CA-G.R. SP No. 47502 is already final and executory with respect to them.

Respondent Lizares, on the other hand, has continually affirmed that he deliberately excluded petitioners in his petition for
review under G.R. No. 148777 as they had amicably settled with him; and that he has released, discharged, and waived
any and all claims against petitioners on account of the petition. Thus, respondent Lizares interposes no objection for the
issuance of a partial entry of judgment in CA-G.R. SP No. 47502 insofar as petitioners are concerned, as the issues and
reliefs he is seeking in G.R. No. 148777 do not concern nor prejudice petitioners.

We disagree.

It is clear that petitioners, though they settled with respondent Lizares out-of-court, were not able to get a favorable ruling
from the DARAB approving the motion to withdraw appeal filed by respondent Lizares in DARAB Case Nos. 4558, 4559,
and 4561. This motion for the recall of the appeal remained unacted upon until the August 7, 1997 DARAB Decision was
rendered in favor of all the defendants and appellees.

Subsequently, the DARAB cases were elevated for review to the CA and docketed as CA-G.R. SP No. 47502.

In its November 29, 2000 Amended Decision, the CA upheld the DARAB Decision.

On January 28, 2002, petitioners Reynaldo Villanueva, et al. filed a Motion for Entry of Judgment based on their out-of-
court settlement with petitioner Lizares while the DARAB case was pending. On July 4, 2002, a second motion for entry of
judgment was filed which was denied together with the first motion by the CA on November 14, 2002.

The reason for the denial by the CA of the aforementioned prayers for entry of judgment is as follows:

Our Amended Decision in this case had long been elevated to the Supreme Court by a petition for review on certiorari
under Rule 45. As held by the Supreme Court in Heirs of the Late Justice Jose B. L. Reyes vs. Court of Appeals, by the
mere fact of the filing of the petition, the finality of the Court of Appeals’ decision was stayed, and there could be no entry
of judgment therein, and hence, no premature execution could be had. In that case, the High Court emphatically declared
that when this Court adopted a resolution granting execution pending appeal after the petition for review was already filed
in the Supreme Court, the Court of Appeals encroached on the hallowed grounds of the Supreme Court. Thus, We find no
legal basis or justification to allow [the] motions for partial entry of judgment even on the ground that private [respondent]-
movants were not impleaded in G.R. No. 148777 and in the absence of opposition from herein petitioner who had
allegedly concluded an out-of-court settlement with private [respondent]-movants.75

We fully agree with the CA that there should be no partial entry of judgment for petitioners Reynaldo Villanueva, et al.
since their motion to withdraw was not acted upon by the DARAB nor by the CA. Thus, there is nothing to record in the
Book of Entry of Judgments.

More importantly, it appears that the transfers made by some or all of petitioners Reynaldo Villanueva, et al. (G.R. No.
157598) to non-qualified persons are proscribed under PD 27. Such finding necessarily preludes the entry of judgment in
favor of said petitioners. Consequently, the alleged transfers made by petitioners Villanueva, et al., being in contravention
of a prohibitory provision of PD 27, are null and void, and the titles issued to non-qualified individuals have to be cancelled
and new ones issued to the Government.1âwphi1

WHEREFORE, the petition in G.R. No. 148777 is partly granted. The November 29, 2000 Amended Decision of the CA in
CA-G.R. SP No. 47502 is affirmed with the modification that the transfers made by private respondents to non-qualified
persons, if any, under PD 27 are illegal and declared NULL and VOID, and the titles issued based on the transfers are
likewise NULL and VOID. The DAR is ORDERED to investigate the transfers covering the subject landholdings and,
based on the findings of illegal transfers for violations of PD 27 and EO 228, to coordinate with the Register of Deeds of
Pampanga for the cancellation of the titles registered in the names of the transferees or to their subsequent transferees
and to issue new titles to the Government for disposition to qualified beneficiaries. The November 14, 1995 PARAD Joint
Decision in DARAB Cases Nos. 638-P’94, 933-P’95, 934-P’95, and 935-P’95, as affirmed by the August 7, 1997 DARAB
Decision in DARAB Case Nos. 4558, 4559, 4560, and 4561, is accordingly MODIFIED.

The petition in G.R. No. 157598 is DISMISSED for lack of merit. The transfers made by petitioners Reynaldo, et al. to
non-qualified persons, if any, under PD 27 are likewise declared NULL and VOID. Similarly, the DAR is ORDERED to
investigate the transfers covering the subject landholdings and, based on the findings of illegal transfers for violations of
PD 27 and EO 228, to coordinate with the Register of Deeds of Pampanga for the cancellation of the titles concerned
registered in the names of the transferees or to their subsequent transferees and to issue new titles to the Government for
disposition to qualified beneficiaries.

SO ORDERED.

G.R. No. 139285               December 21, 2007

ROMAN CATHOLIC ARCHBISHOP OF CACERES, Petitioner,

vs.
SECRETARY OF AGRARIAN REFORM and DAR REGIONAL DIRECTOR (Region V), Respondents.

DECISION

VELASCO, JR., J.:

The Comprehensive Agrarian Reform Law (CARL) has truly noble goals, and these noble goals should not be stymied by
the creation of exemptions or exceptions not contemplated by the law.

The Case

In this Petition for Review on Certiorari under Rule 45, petitioner Roman Catholic Archbishop of Caceres (Archbishop)
questions the February 4, 1999 Decision1 of the Court of Appeals (CA) in CA-G.R. SP No. 48282, which upheld the
December 8, 1997 and June 10, 1998 Orders of the Department of Agrarian Reform (DAR).

The Facts

Archbishop is the registered owner of several properties in Camarines Sur, with a total area of 268.5668 hectares. Of that
land, 249.0236 hectares are planted with rice and corn, while the remaining 19.5432 hectares are planted with coconut
trees.

In 1985, Archbishop filed with the Municipal Agrarian Reform District Office No. 19, Naga City, Camarines Sur several
petitions for exemption of certain properties located in various towns of Camarines Sur from the coverage of Operation
Land Transfer (OLT) under Presidential Decree No. (PD) 27.2 Two of these petitions were denied in an Order dated
November 6, 1986, issued by the Regional Director of DAR, Region V, Juanito L. Lorena.3

Archbishop appealed from the order of the Regional Director, and sought exemption from OLT coverage of all lands
planted with rice and corn which were registered in the name of the Roman Catholic Archdiocese of Caceres. In his
appeal, Archbishop cited the following grounds:

a) That said properties are all covered by conditional donations subject to the prohibitions of the donors to SELL,
EXCHANGE, LEASE, TRANSFER, ENCUMBER OR MORTGAGE the properties;

b) That they are used for charitable and religious purposes;

c) That the parishes located in depressed areas badly need them for the furtherance of their mission work,
propagation of the faith, maintenance and support of their chapels, churches and educational religious institutions
like the Holy Rosary Major and Minor Seminaries for the promotion of the priesthood vocation;
 d) For the preservation of good relationship between church and state thru non-infringement of the right to
exercise religious profession and worship;

e) For the maintenance of the Cathedral and Peñafrancia Shrine, which now include the Basilica Minore Housing
our venerable image of Our Lady of Peñafrancia and the venerable portrait of Divine Rostro;

f) That the petitioner (church) is amenable to continue the leasehold system with the present cultivators or
tenants.4

This appeal was denied by then DAR Secretary Ernesto D. Garilao in an Order dated December 8, 1997.5 A subsequent
motion for reconsideration was denied in an Order dated June 10, 1998.6

The matter was then raised to the CA via Petition for Review on Certiorari. Archbishop argued that even if the lands in
question are registered in his name, he holds the lands in trust for the benefit of his followers as cestui que trust.
Archbishop further argued that the deeds of donation by which the lands were transferred to him imposed numerous
fiduciary obligations, such that he cannot sell, exchange, lease, transfer, encumber, or mortgage the subject lands. By this
reasoning, Archbishop concluded that he is not the "landowner" contemplated by PD 27 and Republic Act No. (RA) 6657,
the CARL of 1988. He then prayed that the assailed orders of the DAR be reversed, or in the alternative, that the alleged
beneficiaries of the trust be each allowed to exercise rights of retention over the landholdings.7

The petition was dismissed by the CA in its February 4, 1999 Decision.8 Archbishop filed a motion for reconsideration, but
was denied in the June 18, 1999 CA Resolution.9

Archbishop now brings the matter before us through this petition.

The Issues

Archbishop raises issues he had raised previously, which, he contends, the CA failed to properly address. He claims that
the CA erred in holding that he is only entitled to assert one right of retention as the subject properties are registered in his
name. He further claims that an express trust had been created wherein he only held naked title to the subject properties
on behalf of the beneficiaries. He argues that it is not the "landowner" contemplated by the law, but merely a trustee, and
as such is entitled to as many rights of retention on behalf of the beneficiaries of each particular property. He then raises
the question of the applicability of the ruling in The Roman Catholic Apostolic Administrator of Davao, Inc. v. The Land
Registration Commission and the Register of Deeds of Davao City,10 which, he cites, ruled that properties held by the
Church are held by it as a mere administrator for the benefit of the members of that particular religion. As Archbishop
claims to be merely an administrator of the subject properties, he argues that these subject properties should have been
exempt from the OLT.

The Court’s Ruling

The petition has no merit.

Archbishop’s arguments, while novel, must fail in the face of the law and the dictates of the 1987 Constitution.

The laws simply speak of the "landowner" without qualification as to under what title the land is held or what rights to the
land the landowner may exercise. There is no distinction made whether the landowner holds "naked title" only or can
exercise all the rights of ownership. Archbishop would have us read deeper into the law, to create exceptions that are not
stated in PD 27 and RA 6657, and to do so would be to frustrate the revolutionary intent of the law, which is the
redistribution of agricultural land for the benefit of landless farmers and farmworkers.

Archbishop was found to be the registered owner of the lands in question, and does not contest that fact. For the
purposes of the law, this makes him the landowner, without the necessity of going beyond the registered titles. He cannot
demand a deeper examination of the registered titles and demand further that the intent of the original owners be
ascertained and followed. To adopt his reasoning would create means of sidestepping the law, wherein the mere act of
donation places lands beyond the reach of agrarian reform.

There can be no claim of more than one right of retention per landowner. Neither PD 27 nor RA 6657 has a provision for a
landowner to exercise more than one right of retention. The law is simple and clear as to the retention limits per
landowner. PD 27 states, "In all cases, the landowner may retain an area of not more than seven (7) hectares if such
landowner is cultivating such area or will now cultivate it"; while RA 6657 states:

SEC. 6. Retention Limits.––Except as otherwise provided in this Act, no person may own or retain, directly, any public or
private agricultural land, the size of which shall vary according to factors governing a viable family-sized farm, such as
commodity produced, terrain, infrastructure, and soil fertility as determined by the Presidential Agrarian Reform Council
(PARC) created hereunder, but in no case shall the retention by the landowner exceed five (5) hectares. Three (3)
hectares may be awarded to each child of the landowner, subject to the following qualifications: (1) that he is at least
fifteen (15) years of age; and (2) that he is actually tilling the land or directly managing the farm: Provided,  That
landowners whose lands have been covered by Presidential Decree No. 27 shall be allowed to keep the area originally
retained by them thereunder; Provided, 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.

Nothing in either law supports Archbishop’s claim to more than one right of retention on behalf of each cestui que trust.
The provisions of PD 27 and RA 6657 are plain and require no further interpretation––there is only one right of retention
per landowner, and no multiple rights of retention can be held by a single party. Furthermore, the scheme proposed by
Archbishop would create as many rights of retention as there are beneficiaries, which could in effect protect the entire
available land area from agrarian reform. Under Archbishop’s reasoning, there is not even a definite landowner to claim
separate rights of retention, and no specific number of rights of retention to be claimed by the landowners. There is simply
no basis in the law or jurisprudence for his argument that it is the "beneficial ownership" that should be used to determine
which party would have the right of retention.

Archbishop makes much of the conditional donation, that he does not have the power to sell, exchange, lease, transfer,
encumber or mortgage the transferred properties. He claims that these conditions do not make him the landowner as
contemplated by the law. This matter has already been answered in Hospicio de San Jose de Barili, Cebu City (Hospicio)
v. Department of Agrarian Reform.11 In that case, wherein Act No. 3239 prohibited the sale under any consideration of
lands donated to the Hospicio, a charitable organization, the Court found that the lands of the Hospicio were not exempt
from the coverage of agrarian reform. In characterizing the sale of land under agrarian reform, we stated:

Generally, sale arises out of contractual obligation. Thus, it must meet the first essential requisite of every contract that is
the presence of consent. Consent implies an act of volition in entering into the agreement. The absence or vitiation of
consent renders the sale either void or voidable.

In this case, the deprivation of the Hospicio’s property did not arise as a consequence of the Hospicio’s consent to the
transfer. There was no meeting of minds between the Hospicio, on one hand, and the DAR or the tenants, on the other,
on the properties and the cause which are to constitute the contract that is to serve ultimately as the basis for the transfer
of ownership of the subject lands. Instead, the obligation to transfer arises by compulsion of law, particularly P.D. No. 27.12

We discussed further:

The twin process of expropriation under agrarian reform and the payment of just compensation is akin to a forced sale,
which has been aptly described in common law jurisdictions as "sale made under the process of the court and in the mode
prescribed by law," and "which is not the voluntary act of the owner, such as to satisfy a debt, whether of a mortgage,
judgment, tax lien, etc." The term has not been precisely defined in this jurisdiction, but reference to the phrase itself is
made in Articles 223, 242, 237 and 243 of the Civil Code, which uniformly exempt the family home "from execution, forced
sale, or attachment." Yet a forced sale is clearly different from the sales described under Book V of the Civil Code which
are conventional sales, as it does not arise from the consensual agreement of the vendor and vendee, but by compulsion
of law. Still, since law is recognized as one of the sources of obligation, there can be no dispute on the efficacy of a forced
sale, so long as it is authorized by law.13

Archbishop’s claim that he does not have jus disponendi over the subject properties is unavailing. The very nature of the
compulsory sale under PD 27 and RA 6657 defeats such a claim. Other less scrupulous parties may even attempt
creating trusts to prevent their lands from coming under agrarian reform, and say that the trustee has no power to dispose
of the properties. The disposition under PD 27 and RA 6657 is of a different character than what is contemplated by jus
disponendi, wherein under these laws, voluntariness is not an issue, and the disposition is necessary for the laws to be
effective.

Under PD 27 and RA 6657, Archbishop cannot claim that the alleged conditions of the donations would have primacy over
the application of the law. This forced sale is not even a violation of the conditions of the donation, since it is by
application of law and beyond Archbishop’s control. The application of the law cannot and should not be defeated by the
conditions laid down by the donors of the land. If such were allowed, it would be a simple matter for other landowners to
place their lands without limit under the protection of religious organizations or create trusts by the mere act of donation,
rendering agrarian reform but a pipe dream.

Archbishop’s contention that he is merely an administrator of the donated properties will not serve to remove these lands
from the coverage of agrarian reform. Under PD 27, the coverage is lands devoted to rice and corn. Section 4 of RA 6657
states, "The Comprehensive Agrarian Reform Law of 1988 shall cover, regardless of tenurial arrangement and commodity
produced, all public and private agricultural lands as provided in Proclamation No. 131 and Executive Order No. 229,
including other lands of the public domain suitable for agriculture." The lands in Archbishop’s name are agricultural lands
that fall within the scope of the law, and do not fall under the exemptions.

The exemptions under RA 6657 form an exclusive list, as follows:

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)

Archbishop would claim exemption from the coverage of agrarian reform by stating that he is a mere administrator, but his
position does not appear under the list of exemptions under RA 6657. His claimed status as administrator does not create
another class of lands exempt from the coverage of PD 27 or RA 6657, and The Roman Catholic Apostolic Administrator
of Davao, Inc.14 does not create another definition for the term "landowner."

We explained in Hospicio:

It is axiomatic that where a general rule is established by a statute with exceptions, the Court will not curtail nor add to the
latter by implication, and it is a rule that an express exception excludes all others. We cannot simply impute into a statute
an exception which the Congress did not incorporate. Moreover general welfare legislation such as land reform laws is to
be construed in favor of the promotion of social justice to ensure the well-being and economic security of the people.
Since a broad construction of the provision listing the properties exempted under the CARL would tend to denigrate the
aims of agrarian reform, a strict application of these exceptions is in order.15

Archbishop cannot claim exemption in behalf of the millions of Filipino faithful, as the lands are clearly not exempt under
the law. He should not fear that his followers are simply being deprived of land, as under both PD 27 and RA 6657, he is
entitled to just compensation, which he may then use for the benefit of his followers. His situation is no different from other
landowners affected by agrarian reform––they are somewhat deprived of their land, but it is all for a greater good.
As Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform16 recognized the revolutionary
character of the expropriation under the agrarian reform law, we follow such lofty ideal for the resolution of this case. This
grand purpose under the CARL must not be hindered by the simple expedient of appending conditions to a donation of
land, or by donating land to a church. This is not to cast aspersions on religious organizations, but it is not fitting for them
to be used as vehicles for keeping land out of the hands of the landless. The law is indubitably in line with the charitable
ideals of religious organizations to ensure that the land they own falls into the hands of able caretakers and owners. As a
religious leader, Archbishop can take solace in the fact that his lands are going to be awarded to those who need and can
utilize them to the fullest.

WHEREFORE, we DENY the petition, and AFFIRM the February 4, 1999 Decision in CA-G.R. SP No. 48282.

SO ORDERED.

[G.R. No. 133507. February 17, 2000.]

EUDOSIA DAEZ AND/OR HER HEIRS, REP. BY ADRIANO D. DAEZ, Petitioners, v. THE HON. COURT OF
APPEALS, MACARIO SORIENTES, APOLONIO MEDIANA, ROGELIO MACATULAD and MANUEL
UMALI, Respondents.

DECISION

DE LEON, JR., J.:

Before us is a petition for review on certiorari of the Decision 1 of the Court of Appeals 2 dated January 28, 1998 which
denied the application of petitioner heirs of Eudosia Daez for the retention of a 4.1685-hectare riceland pursuant to
Republic Act (R.A.) No. 6657, otherwise known as the Comprehensive Agrarian Reform Law 3 , thereby reversing the
Decision 4 of then Executive Secretary Ruben D. Torres and the Order 5 of then Deputy Executive Secretary Renato C.
Corona, both of which had earlier set aside the Resolution 6 and Order 7 of then Department of Agrarian Reform (DAR)
Secretary Ernesto D. Garilao denying exemption of the same riceland from coverage under Presidential Decree (P.D.) No.
27.chanrobles virtua| |aw |ibrary

The pertinent facts are:chanrob1es virtual 1aw library

Eudosia Daez, now deceased, was the owner of a 4.1685-hectare riceland in Barangay Lawa, Meycauayan, Bulacan
which was being cultivated by respondents Macario Soriente, Rogelio Macatulad, Apolonio Mediana and Manuel Umali
under a system of share-tenancy. The said land was subjected to the Operation Land Transfer (OLT) Program under
Presidential Decree (P.D.) No. 27 8 as amended by Letter of Instruction (LOI) No. 474 9 . Thus, the then Ministry of
Agrarian Reform acquired the subject land and issued Certificates of Land Transfer (CLT) on December 9, 1980 to private
respondents as beneficiaries.

However, on May 31, 1981, private respondents signed an affidavit, allegedly under duress, stating that they are not
share tenants but hired laborers 10 . Armed with such document, Eudosia Daez applied for the exemption of said riceland
from coverage of P.D. No. 27 due to non-tenancy as well as for the cancellation of the CLTs issued to private
respondents.chanrobles.com : virtuallawlibrary

In their Affidavit dated October 2, 1983, Eudosia Daez and her husband, Lope, declared ownership over 41.8064 hectares
of agricultural lands located in Meycauayan, Bulacan and fourteen (14) hectares of riceland, sixteen (16) hectares of
forestland, ten (10) hectares of "batuhan" and 1.8064 hectares of residential lands 11 in Peñaranda, Nueva Ecija.
Included in their 41.8064-hectare landholding in Bulacan, was the subject 4.1685-hectare riceland in Meycauayan.

On July 27, 1987, DAR Undersecretary Jose C. Medina issued an Order denying Eudosia Daez’s application for
exemption upon finding that her subject land is covered under LOI No. 474, petitioner being owner of the aforesaid
agricultural lands exceeding seven (7) hectares. 12

On June 29, 1989, Eudosia Daez wrote a letter to DAR Secretary Benjamin T. Leong requesting for reconsideration of
Undersecretary Medina’s order. But on January 16, 1992 13 Secretary Leong affirmed the assailed order upon finding
private respondents to be bona fide tenants of the subject land. Secretary Leong disregarded private respondents’ May
31, 1981 affidavit for having been executed under duress because he found that Eudosia’s son, Adriano, who was then
the incumbent Vice-Mayor of Meycauayan, pressured private respondents into signing the same.chanrobles
virtuallawlibrary

Undaunted, Eudosia Daez brought her case on February 20, 1992 to the Court of Appeals via a petition for certiorari. The
Court of Appeals, however, sustained the order of Secretary Leong in a decision dated April 29, 1992. Eudosia pursued
her petition before this court but we denied it in a minute resolution dated September 18, 1992. We also denied her
motion for reconsideration on November 9, 1992.

Meantime, on August 6 and 12, 1992, the DAR issued Emancipation Patents (EPs) to private respondents. Thereafter, the
Register of Deeds of Bulacan issued the corresponding Transfer Certificates of Title (TCTs).

Exemption of the 4.1685 riceland from coverage by P.D. No. 27 having been finally denied her, Eudosia Daez next filed
an application for retention of the same riceland, this time under R.A. No. 6657.

In an order dated March 22, 1994, DAR Region III OIC-Director Eugenio B. Bernardo allowed Eudosia Daez to retain the
subject riceland but he denied the application of her eight (8) children to retain three (3) hectares each for their failure to
prove actual tillage of the land or direct management thereof as required by law 14 . Aggrieved, they appealed to the
DAR.chanrobles.com : red

On August 26, 1994, then DAR Secretary Ernesto D. Garilao, set aside the order of Regional Director Bernardo in a
Resolution, 15 the decretal portion of which reads, viz.:jgc:chanrobles.com.ph

"WHEREFORE, premises considered, this Resolution is hereby issued setting aside with FINALITY the Order dated
March 22, 1994 of the Regional Director of DAR Region III.

The records of this case is remanded to the Regional Office for immediate implementation of the Order dated January 16,
1992 of this office as affirmed by the Court of Appeals and the Supreme Court.

SO ORDERED."cralaw virtua1aw library

Eudosia Daez filed a Motion for Reconsideration but it was denied on January 19, 1995 16 .

She appealed Secretary Garilao’s decision to the Office of the President which ruled in her favor. The dispositive portion
of the Decision 17 of then Executive Secretary reads:jgc:chanrobles.com.ph

"WHEREFORE, the resolution and order appealed from are hereby SET ASIDE and judgment is rendered authorizing the
retention by Eudosia Daez or her heirs of the 4.1685-hectare landholding subject thereof.

SO ORDERED." 18

Aggrieved, private respondents sought from the Court of Appeals, a review of the decision of the Office of the President.

On January 28, 1999, the said Decision of the Office of the President was reversed. The Court of Appeals ordered,
thus:jgc:chanrobles.com.ph

"WHEREFORE, the assailed decision of July 5, 1996 and Order dated October 23, 1996 of the public respondents are
REVERSED AND SET ASIDE, and the Resolution and Order of DAR Secretary Ernesto D. Garilao respectively dated
August 26, 1994 and January 19, 1995 are REINSTATED.

SO ORDERED."cralaw virtua1aw library

Hence, this petition which assigns the following errors:jgc:chanrobles.com.ph

"I. THE HONORABLE COURT OF APPEALS ERRED WHEN IT RULED THAT DISTINCTION BETWEEN EXEMPTION
FROM AGRARIAN REFORM COVERAGE AND THE RIGHT OF RETENTION OF LANDOWNERS IS ONLY A MATTER
OF SEMANTICS THAT AN ADVERSE DECISION IN THE FORMER WILL FORECLOSE FURTHER ACTION TO
ENFORCE THE LATTER CONSIDERING THAT THEY CONSTITUTE SEPARATE AND DISTINCT CAUSES OF
ACTION AND, THEREFORE, ENFORCEABLE SEPARATELY AND IN SEQUEL.

II. THE HONORABLE COURT OF APPEALS ERRED WHEN IT APPLIED THE PRINCIPLE OF RES JUDICATA
DESPITE THE FACT THAT THE PREVIOUS CASE CITED (EXEMPTION FROM COVERAGE DUE TO NON-TENANCY)
AND THE PRESENT CASE (RETENTION RIGHT) ARE OF DIFFERENT CAUSES OF ACTION.chanrobles.com : virtual
law library
III. THE HONORABLE COURT OF APPEALS ERRED WHEN IT RULED/OPINED THAT THERE WAS A CUT-OFF DATE
(AUGUST 27, 1985) FOR LANDOWNERS TO APPLY FOR EXEMPTION OR RETENTION UNDER P.D. 27 AND THOSE
WHO FAILED TO FILE THEIR APPLICATIONS/PETITIONS ARE DEEMED TO HAVE WAIVED THEIR RIGHTS.

IV. THE HONORABLE COURT OF APPEALS ERRED IN DECLARING THAT PETITIONERS (RESPONDENTS
THEREIN) ARE GUILTY OF ESTOPPEL.

V. THE HONORABLE COURT OF APPEALS ERRED WHEN IT RULED THAT THE LAND SUBJECT OF THIS CASE IS
NO LONGER OWNED BY PETITIONERS SINCE PRIVATE RESPONDENTS HAVE ALREADY BEEN ISSUED NOT
ONLY THEIR RESPECTIVE CERTIFICATES OF LAND TRANSFER BUT ALSO THEIR INDIVIDUAL CERTIFICATES OF
TITLE OVER THE DISPUTED AREA." 19

We grant the petition.

First. Exemption and retention in agrarian reform are two (2) distinct concepts.

P.D. No. 27, which implemented the Operation Land Transfer (OLT) Program, covers tenanted rice or corn lands. The
requisites for coverage under the OLT program are the following: (1) the land must be devoted to rice or corn crops; and
(2) there must be a system of share-crop or lease-tenancy obtaining therein. If either requisite is absent, a landowner may
apply for exemption. If either of these requisites is absent, the land is not covered under OLT. Hence, a landowner need
not apply for retention where his ownership over the entire landholding is intact and undisturbed.

P.D. No. 27 grants each tenant of covered lands a five (5)-hectare lot, or in case the land is irrigated, a three (3)-hectare
lot constituting a family size farm. However, said law allows a covered landowner to retain not more than seven (7)
hectares of his land if his aggregate landholding does not exceed twenty-four (24) hectares. Otherwise, his entire
landholding is covered without him being entitled to any retention right 20 .

Consequently, a landowner may keep his entire covered landholding if its aggregate size does not exceed the retention
limit of seven (7) hectares. In effect, his land will not be covered at all by the OLT program although all requisites for
coverage are present. LOI No. 474 clarified the effective coverage of OLT to include tenanted rice or corn lands of seven
(7) hectares or less, if the landowner owns other agricultural lands of more than seven (7) hectares. The term "other
agricultural lands" refers to lands other than tenanted rice or corn lands from which the landowner derives adequate
income to support his family.chanrobles virtuallawlibrary

Thus, on one hand, exemption from coverage of OLT lies if: (1) the land is not devoted to rice or corn crops even if it is
tenanted; or (2) the land is untenanted even though it is devoted to rice or corn crops.

On the other hand, the requisites for the exercise by the landowner of his right of retention are the following: (1) the land
must be devoted to rice or corn crops; (2) there must be a system of share-crop or lease-tenancy obtaining therein; and
(3) the size of the landholding must not exceed twenty-four (24) hectares, or it could be more than twenty-four (24)
hectares provided that at least seven (7) hectares thereof are covered lands and more than seven (7) hectares of it
consist of "other agricultural lands" .

Clearly, then, the requisites for the grant of an application for exemption from coverage of OLT and those for the grant of
an application for the exercise of a landowner’s right of retention, are different.

Hence, it is incorrect to posit that an application for exemption and an application for retention are one and the same
thing. Being distinct remedies, finality of judgment in one does not preclude the subsequent institution of the other. There
was, thus, no procedural impediment to the application filed by Eudosia Daez for the retention of the subject 4.1865-
hectare riceland, even after her appeal for exemption of the same land was denied in a decision that became final and
executory.

Second. Petitioner heirs of Eudosia Daez may exercise their right of retention over the subject 4.1685 riceland.

The right of retention is a constitutionally guaranteed right, which is subject to qualification by the legislature 21 . It serves
to mitigate the effects of compulsory land acquisition by balancing the rights of the landowner and the tenant and by
implementing the doctrine that social justice was not meant to perpetrate an injustice against the landowner 22 . A
retained area, as its name denotes, is land which is not supposed to anymore leave the landowner’s dominion, thus
sparing the government from the inconvenience of taking land only to return it to the landowner afterwards, which would
be a pointless process.chanrobles.com : virtuallawlibrary
In the landmark case of Association of Small Landowners in the Phil., Inc. v. Secretary of Agrarian Reform 23 , we held
that landowners who have not yet exercised their retention rights under P.D. No. 27 are entitled to the new retention rights
under R.A. No. 6657 24 . We disregarded the August 27, 1985 deadline imposed by DAR Administrative Order No. 1,
series of 1985 on landowners covered by OLT. However, if a landowner filed his application for retention after August 27,
1985 but he had previously filed the sworn statements required by LOI Nos. 41, 45 and 52, he is still entitled to the
retention limit of seven (7) hectares under P.D. No. 27. 25 Otherwise, he is only entitled to retain five (5) hectares under
R.A. No. 6657.

Sec. 6 of R.A. No. 6657, which provides, viz.:chanrob1es virtual 1aw library

SECTION 6. Retention Limits — Except as otherwise provided in this Act, no person may own or retain, directly or
indirectly, any public or private agricultural land, the size of which shall vary according to factors governing a viable family-
size, such as commodity produced, terrain, infrastructure, and soil fertility as determined by the Presidential Agrarian
Reform Council (PARC) created hereunder, but in no case shall retention by the landowner exceed five (5) hectares.
Three (3) hectares may be awarded to each child of the landowner, subject to the following qualifications: (1) that he is at
least fifteen (15) years of age; and (2) that he is actually tilling the land or directly managing the farm; Provided, That
landowners whose land 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.

The right to choose the area to be retained, which shall be compact or contiguous, shall pertain to the landowner.
Provided, however, That in case the area selected for retention by the landowner is tenanted, the tenant shall have the
option to choose whether to remain therein or be a beneficiary in the same or another agricultural land with similar or
comparable features. In case the tenant chooses to remain in the retained area, he shall be considered a lease holder
and shall lose his right to be a beneficiary under this Act. In case the tenant chooses to be a beneficiary in another
agricultural land, he loses his right as a lease holder to the land retained by the landowner. The tenant must exercise this
option within a period of one (1) year from the time the landowner manifests his choice of the area for retention.

In all cases, the security of tenure of the farmers or farmworkers on the land prior to the approval of this Act shall be
respected.

Upon the effectivity of this Act, any sale, disposition, lease, management contract or transfer of possession of private
lands executed by the original landowner in violation of this Act shall be null and void; Provided, however, That those
executed prior to this Act shall be valid only when registered with the Register of Deeds within a period of three (3)
months after the effectivity of this Act. Thereafter, all Register of Deeds shall inform the DAR within thirty (30) days of any
transaction involving agricultural lands in excess of five (5) hectares" 26 .

defines the nature and incidents of a landowner’s right of retention. For as long as the area to be retained is compact or
contiguous and it does not exceed the retention ceiling of five (5) hectares, a landowner’s choice of the area to be
retained, must prevail. Moreover, Administrative Order No. 4, series of 1991, 27 which supplies the details for the exercise
of a landowner’s retention rights, likewise-recognizes no limit to the prerogative of the landowner, although he is
persuaded to retain other lands instead to avoid dislocation of farmers.

Without doubt, this right of retention may be exercised over tenanted land despite even the issuance of Certificate of Land
Transfer (CLT) to farmer-beneficiaries. 28 What must be protected, however, is the right of the tenants to opt to either stay
on the land chosen to be retained by the landowner or be a beneficiary in another agricultural land with similar or
comparable features. 29

Finally. Land awards made pursuant to the government’s agrarian reform program are subject to the exercise by a
landowner, who is so qualified, of his right of retention.chanrobles.com : chanrobles.com.ph

Under P.D. No. 27, beneficiaries are issued CLTs to entitle them to possess lands. Thereafter, they are issued
Emancipation Patents (EPs) after compliance with all necessary conditions. Such EPs, upon their presentation to the
Register of Deeds, result in the issuance of the corresponding transfer certificates of title (TCT) in favor of the
beneficiaries mentioned therein 30 .

Under R.A. No. 6657, the procedure has been simplified 31 . Only Certificates of Land Ownership Award (CLOAs) are
issued, in lieu of EPs, after compliance with all prerequisites. Thereafter, upon presentation of the CLOAs to the Register
of Deeds, TCTs are issued to the designated beneficiaries. CLTs are no longer issued.

The issuance of EPs or CLOAs to beneficiaries does not absolutely bar the landowner from retaining the area covered
thereby. Under Administrative Order No. 2, series of 1994 32 , an EP or CLOA may be cancelled if the land covered is
later found to be part of the landowner’s retained area.chanrobles.com : virtual law library

A certificate of title accumulates in one document a comprehensive statement of the status of the fee held by the owner of
a parcel of land. 33 As such, it is a mere evidence of ownership and it does not constitute the title to the land itself. It
cannot confer title where no title has been acquired by any of the means provided by law 34 .

Thus, we had, in the past, sustained the nullification of a certificate of title issued pursuant to a homestead patent because
the land covered was not part of the public domain and as a result, the government had no authority to issue such patent
in the first place 35 . Fraud in the issuance of the patent, is also a ground for impugning the validity of a certificate of title
36 . In other words, the invalidity of the patent or title is sufficient basis for nullifying the certificate of title since the latter is
merely an evidence of the former.

In the instant case, the CLTs of private respondents over the subject 4.1685-hectare riceland were issued without Eudosia
Daez having been accorded her right of choice as to what to retain among her landholdings. The transfer certificates of
title thus issued on the basis of those CLTs cannot operate to defeat the right of the heirs of deceased Eudosia Daez to
retain the said 4.1685 hectares of riceland.

WHEREFORE, the instant petition is hereby GRANTED. The Decision of the Court of Appeals, dated January 28, 1998, is
REVERSED and SET ASIDE and the Decision of the Office of the President, dated July 5, 1996, is hereby REINSTATED.
In the implementation of said decision, however, the Department of Agrarian Reform is hereby ORDERED to fully accord
to private respondents their rights under Section 6 of R.A. No. 6657.chanrobles.com : virtual law library

No costs.

SO ORDERED.

G.R. No. 165073             June 30, 2006

HEIRS OF JUAN GRIÑO, SR. REPRESENTED BY REMEDIOS C. GRIÑO, Petitioners,

vs.
DEPARTMENT OF AGRARIAN REFORM, Respondent.

DECISION

CARPIO MORALES, J.:

On challenge via petition for certiorari are the October 17, 2003 Decision and the June 21, 2004 Resolution of the Court of
Appeals in CA-GR SP No. 73368, "Heirs of Juan Griño, Sr. represented by Remedios C. Griño v. Department of Agrarian
Reform."1

Juan Griño, Sr. (Griño), now deceased, was the owner of a parcel of agricultural land, Lot 1505-B, covered by Transfer
Certificate of Title (TCT) No. T-533502 of the Register of Deeds of Iloilo containing an area of 9.35 hectares, located in
Barangay Gua-an, Leganes, Iloilo.

Griño was also the owner of a 50-hectare parcel of land located in Barangay Tad-y, Sara, Iloilo which he, on February 8,
1972, mortgaged to the Development Bank of the Philippines (DBP) to secure the payment of a loan.

On October 21, 1972, then President Ferdinand E. Marcos issued Presidential Decree No. 27 (PD 27), "decreeing the
emancipation of tenants from the bondage of the soil transferring to them the ownership of the land they till and providing
the instruments and mechanism therefor."

Griño’s 9.35 hectare land was placed under the coverage of PD 27 on account of which Certificates of Land Transfer
(CLTs) covering a portion thereof were issued in favor of his tenants Marianito Gulmatico, Ludovico Hubero, Rodolfo
Hubero, Placida Catahay and Roberto Gula.

Griño later filed in the early 80’s a letter-petition for the cancellation of the above-said CLTs, contending that they were
issued to the tenants without giving him an opportunity to be heard; the land was the only riceland he had in the
Municipality of Leganes; the area planted with palay was only a little over 6 hectares; the land had a very great
sentimental value to him; and several of his children and grandchildren who had no suitable residential lots might need the
land to build their homes.

In lieu of the land covered by the CLTs, Griño offered seven hectares for each of the tenants from his above-said 50-
hectare land.3

Griño, however, later ceded to the DBP his 50-hectare land via dacion en pago  to settle his obligation to it.

On July 10, 1985, Griño died.4 He was survived by his wife and seven children. On June 22, 1988, his wife also passed
away.5

On June 15, 1988, Republic Act 6657 or the COMPREHENSIVE AGRARIAN REFORM LAW (CARL) took effect.

DAR Regional Director Antonio S. Maraya, acting on the petition of Griño for the cancellation of the CLTs, dismissed the
same by Order6 of September 25, 1989 (Maraya Order), citing Letter of Instructions No. 474 (LOI 474),7 the pertinent
portions of which Order read:

Based from the foregoing, Atty. Rex Tupas, then Legal Officer III, Agrarian Reform Team, Leganes, Iloilo recommended in
his report dated April 5, 1982 the dismissal of herein petition of Juan Griño for lack of merit and the maintenance of the
Certificates of Land Transfer issued in favor of the above enumerated tenants covering the subject farmholdings, the
petitioner, Juan Griño, being an owner of fifty hectares untenanted other agricultural lands  which will not entitle
him for exemption/retention pursuant to LOI 474, as implemented by MAR Memorandum Circular No. 11 dated
April 21, 1978. This recommendation was concurred in by the Regional Director, Department of Agrarian Reform, Region
VI, Iloilo City.

WHEREFORE, premises considered, the instant petition filed by Juan Griño for the cancellation of the Certificates of Land
Transfer issued in favor of his tenants covering certain parcels of land situated at Brgy. Gua-an, Leganes, Iloilo, is
hereby DISMISSED for lack of merit, and accordingly, the Certificates of Land Transfer issued shall be
maintained.8 (Emphasis and underscoring supplied)

The Land Bank of the Philippines later advised Griño’s heirs, herein petitioners, by letter9 of June 6, 1996, of the DAR’s
submission of Griño’s 9.35 hectare land transfer claim for payment under PD 27, its approval on June 5, 1996, and the
requirements for the proceeds of the claim to be released.

Petitioners later filed with the DAR Regional Office an application for retention10 dated March 14, 1997 of the 9.35 hectare
land pursuant to Section 6 of the CARL which reads:

SECTION 6. Retention Limits. – Except as otherwise provided in this Act, no person may own or retain, directly or
indirectly, any public or private agricultural land, the size of which shall vary according to factors governing a viable family-
sized farm, such as commodity produced, terrain, infrastructure, and soil fertility as determined by the Presidential
Agrarian Reform Council (PARC) created hereunder, but in no case shall retention by the landowner exceed five (5)
hectares. Three (3) hectares may be awarded to each child of the landowner, subject to the following
qualifications: (1) that he is at least fifteen (15) years of age; and (2) that he is actually tilling the land or directly
managing the farm: Provided, that landowners whose lands have been covered by Presidential Decree No. 27
shall be allowed to keep the area originally retained by them thereunder, Provided, further, That original homestead
grantees or their direct compulsory heirs who still own the original homestead at the time of the approval of this Act shall
retain the same areas as long as they continue to cultivate said homestead.

x x x x (Emphasis and underscoring supplied)

Petitioners sought the exemption of the 9.35 hectare land from the coverage of either PD 27 or the CARL, contending that
Griño had seven children and if a landowner is entitled to five hectares as retention limit, the remaining land of Griño
would not be enough for his children, the 50-hectare land of Griño having already been ceded to the DBP.11

In the meantime or on June 5 and 25, 1997, Emancipation Patents were issued in favor of Griño’s above-named tenants.12

DAR Regional Director Dominador B. Andres subsequently dismissed petitioners’ application for retention, by
Order13 dated April 27, 1998, ratiocinating as follows:
xxxx

The reckoning date for the application of Operation Land Transfer is October 21, 1972, the date of effectivity of P.D. 27,
which is the law applicable in this case, and not the date of effectivity of R.A. 6657 (June 15, 1988), which is applicable
here only in suppletory manner. By operation of law, as of October 21, 1972, the subject landholdings were covered by
Operation Land Transfer under Presidential Decree No. 27 in view of the fact that the landholdings, subject of this case
are tenanted and Juan Griño, Sr. has other landholdings located at Sara, Iloilo with an area of 50.0000 hectares, more or
less. The conveyance of the 50.0000 hectares landholdings in favor of the Development Bank of the Philippines sometime
in 1985 has no legal effect of exempting the tenanted landholdings from Operation Land Transfer considering that the
conveyance happened only in 1985, several years after the subjecting of the said properties under the coverage of
Operation Land Transfer.

x x x x14 (Emphasis and underscoring supplied)

Petitioners moved to reconsider15 the April 27, 1998 Order of the DAR Regional Director but it was denied by Order16 of
August 18, 1998.

Petitioners appealed to the DAR Secretary, arguing that the Regional Director erred in:

I. . . . NOT CANCELING RESPONDENTS’ [CLTs] WHICH WERE NULL AND VOID FOR HAVING BEEN ISSUED
WITHOUT DUE PROCESS OF LAW AND WITHOUT PAYMENT OF JUST COMPENSATION.

II. . . . HOLDING THAT GRIÑO DID NOT HAVE A RIGHT OF RETENTION/EXEMPTION OVER HIS TENANTED
AGRICULTURAL LAND (LOT 1505-B) BECAUSE HE OWNED 50 HECTARES OF UNTENANTED OTHER
AGRICULTURAL LAND IN SARA WHEN PD NO. 27 TOOK EFFECT.

III. . . . HOLDING THAT THE REVERSION OF THE 50- HECTARE LAND IN SARA, ILOILO TO THE DBP IN PAYMENT
OF GRIÑO’S MORTGAGE DEBT, WAS CIRCUMVENTION OF PD 27.

IV. . . . NOT ALLOWING GRIÑO AND (LATER) HIS HEIRS THE RIGHT TO CHOOSE TO RETAIN HIS 9-HECTARE-
LOT 1505-B IN LEGANES, ILOILO, IN LIEU OF THE 50-HECTARE LAND IN SARA, ILOILO, AS PROVIDED IN
SECTION 6 O[F] RA 6657 WHICH WAS ALREADY THE LAW WHEN THE APPEALED ORDERS WERE ISSUED.17

By Order18 dated September 3, 2002, then DAR Secretary Hernani A. Braganza denied petitioners’ appeal:

xxxx

The fact that the 50-hectare property was mortgaged to the DBP in 1972 is of no moment in relation to PD 27. The naked
title of said property remained with Juan Griño, Sr. and he was still the owner thereof when PD 27 took effect.

However, we agree with herein applicants-appellants that the reversion of the 50-hectare property to the DBP by way
of dacion en pago in 1985 was not done in circumvention of PD 27. Said property was untenanted coconut land, hence,
beyond the coverage of PD 27. However, said transaction merely confirmed the fact that Juan Griño, Sr. was the owner of
the 50-hectare property when PD 27 took effect on 21 October 1972.

Since Juan Griño, Sr. cannot retain any portion of his tenanted riceland in Leganes, Iloilo, herein applicants-appellants,
who are his successors-in-interest, cannot also retain the same property under PD 27. Herein applicants-appellants
merely succeeded to the rights of their predecessor-in-interest by virtue of the Law on Succession under the New Civil
Code. It should be noted that under DAR AO 4 (1991), no retention rights are granted to the children of landowners.

Applicants-appellants next assert their right of retention and their right to choose the area to be retained as provided in
Section 6 of RA 6657.

The contention is likewise without merit.

xxx
The . . . statement of the Supreme Court clearly indicates that a landowner who failed to exercise his retention right of
land under PD 27 may do so under RA 6657 provided he is qualified to do so under the regime of PD 27. Stated
differently, where a landowner is not entitled to retain land under PD 27, he cannot avail of the right of retention over the
same land under RA 6657.

In the case at hand, it is established that Juan Griño, Sr. was not entitled to exercise his retention right over subject
property under PD 27. As such, he is also not entitled to exercise said right under RA 6657. If Juan Griño, Sr. had no
retention rights under PD 27 and RA 6657, it follows that his heirs, who are his successors-in-interest, cannot also
exercise the same right under PD 27 and RA 6657.

x x x x (Underscoring supplied)19

Before the Court of Appeals to which petitioners elevated the case via petition for review, it raised the following
arguments:

1. Griño had the right to retain subject land, because LOI 474 exempted from OLT landowners of ricelands who
owned other agricultural lands exceeding 7 hectares if they did not derive sufficient income from the latter.

2. Petitioners had each inherited a 1.33 hectare share of the subject land as of 1985, which was already way
below the retention limits of PD 27 and RA 6657.20

By Decision21 dated October 17, 2003, the appellate court affirmed the September 3, 2002 Order of the DAR Secretary,
the pertinent portions of which decision read:

x x x Juan Griño’s disputed land came within the coverage of P.D. 27 because it is tenanted riceland. Because P.D. 27
initially lacked implementing rules and regulations, there were a lot of uncertainties at the start on how the transfer of
ownership to tenant-framers would operate. As the above outline of the major post-P.D. 27 developments showed, the
government started with the landed estates and worked its way down to seven hectares of tenanted rice and corn land by
the time it came out with LOI 474. What was certain at that point was that from the combined application of P.D. 27
and LOI 474, Juan Griño, Sr. had no right of retention because he owned 9 hectares of tenanted riceland and 50
hectares of coconut land. Thus, his tenants were given – in 1981, during the lifetime of Juan Griño, Sr. – their
Certificates of Land Transfers preparatory to the Emancipation Patents they would receive if they can perfect their
payments of their portion of the covered riceland. Juan Griño, Sr. objected to the issuance of the CLTs soon after. This
was the status of Juan Griño, Sr.’s retention rights when he died in 1985.

xxxx

While Juan Griño seasonably objected to the CLTs, the objection was simply a pending remedial action passed on to the
heirs. This remedial action lost its efficacy for the heirs when the DAR dismissed the petition on September 25,
1989 and their heirs failed to appeal the dismissal. x x x

xxxx

Additionally, when the heirs of Juan Griño, Sr. filed their application for retention under RA 6657 in 1997 they had
to contend with an existing adverse ruling by the DAR – the order of September 25, 1989 and the CLTs the
ruling confirmed. In 1997, the estate of Juan Griño, Sr. could no longer file a petition that would question the
denial of Juan Griño, Sr.’s retention rights as res adjudicata had then set in. The DAR was the agency vested by
law with the authority to rule on retention issues and its ruling lapsed to finality fifteen (15) days after its
service. That the ruling has been duly served and has reached finality  appear to us to be uncontroverted. The
DAR ruling is a ruling on the merits of Juan Griño, Sr.’s petition for cancellation of the issued CLTs, and laid to rest any
issue of retention as between Juan Griño, Sr. and his successors, and the government. Thus, res adjudicata fully
applies.

The estate and the individual heirs are likewise estopped by laches from questioning the denial of Juan Griño,
Sr.’s claim for retention. The denial was made on September 25, 1989 and the heirs’ present petition, assuming
that it can be characterized as an attack on the denial of Juan Griño, Sr.’s retention rights, was made only on
March 17, 1997 or 7 ½ years later. At this point, laches has set in, laches being "the failure or neglect, for an
unreasonable and unexplained length of time, to do that which by exercising due diligence, could or should have
been done earlier. x x x
 xxxx

In our view, allowing the heirs to resurrect the long entombed issue of retention under the circumstances of this case
would not only be a major setback for the government’s agrarian reform program, but would be unjust as well to the
individual tenants-beneficiaries who are now full-pledged owners of the lands they till. Any adverse ruling against the new
owners would be doubly unjust since they were never heard in this present petition.

x x x x22 (Emphasis and underscoring supplied;

citations omitted)

Petitioners moved to reconsider the appellate court’s decision upon the following arguments:

1. The Order of DAR Regional Director Maraya dated September 1989 purportedly denying Juan Griño, Sr.’s
petition for cancellation of CLTs appeared only in 1998 – 6 months after the PARO had declared in the EPs
issued in 1997 that no CLTs had been issued. Hence, the supposed Maraya Order upholding said CLTs could not
be held against herein Petitioners, as even the PARO did not know of their existence (assuming they existed at
all).

2. There was no substitution of heirs in relation to the supposed Petition for Cancellations of CLTs, hence herein
Petitioners cannot be held bound by the DAR Regional Director’s Order dated September 1989.

3. Addressing the Order to a dead person, without showing that it was validly served upon any heir or
representative, does not constitute valid notice upon herein Petitioners.

4. A Petition for Cancellation of CLTs is not tantamount to an Application for Retention. The issuance of CLTs is
not a bar to the Petitioner’s exercise of their Constitutionally-guaranteed right of retention.

5. The case of Daez v. CA which also involves a denial of a petition for cancellation of CLTs, shows that the right
of retention can still be exercised under RA 6657 after such denial.23 (Underscoring supplied)

By Resolution24 dated June 21, 2004, the appellate court denied petitioners’ motion for reconsideration, holding that,
among other things, the issues raised therein "were never raised in the proceedings below nor in their petition for review";
and that "it is against all rules of procedural orderliness and fair play for the petitioners to claim that [its] [d]ecision is wrong
because the underlying facts – stated in the petitioners’ Statement of Facts and submissions – are incorrect or
incomplete" and "[p]etitioners are in fact estopped . . . . from making this claim after [it has] relied on their statements and
submissions in rendering [its] Decision."

The appellate court likewise held that the DAR could not be faulted if there was no substitution of parties, for although the
DARAB rules do not contain any provision bearing on the death of a party, the Rules of Court makes it the duty of counsel
to inform the tribunal the fact of death of the party and the name and address of his representative.

Furthermore, the appellate court held that even without above-stated rule, "ordinary common sense . . . dictate[s] that the
heirs of a deceased litigant cannot sleep on their duty to attend the estate of the deceased" and "[s]ince no notification
appears to have been undertaken by the heirs, [it] find[s] no merit in petitioners’ claim that there was no substitution of
heirs and the denial of Griño’s petition for cancellation of CLTs does not bind them."

Hence, the present petition for certiorari, petitioners faulting the appellate court to have committed grave abuse of
discretion:

In refusing to recognize [its] Constitutional right of retention – as embodied in RA 6657 – which the Association of Small
Landowners case had already acknowledged by the time the Maraya Order was supposedly issued[.]

In refusing to recognize these strange discoveries of glaring irregularities – of facts gleaned from the DAR’s records
submitted to the Court and made available to herein Petitioners only after the Petition for Review had been filed before the
Court of Appeals[.]
In insisting that [they] had already lost [their] right of retention because the Maraya Order had become final, despite the
PARO’s unequivocal certification at the back of each Emancipation Patent that there were no CLTs issued, and the
Maraya Order was conveniently "discovered" within the DAR itself only in 1998[.]25

The proper remedy for petitioners to challenge the appellate court’s decision and resolution was to file a petition for review
on certiorari under Rule 45 on or before July 20, 2004 or 15 days after they received a copy of the appellate court’s
resolution on July 5, 2004 denying their motion for reconsideration. They, however, filed the present petition for certiorari
under Rule 65 on September 20, 2004.

It is well settled, however, that certiorari cannot be used as a substitute for lost appeal. Certiorari lies only when there is
no appeal nor any plain, speedy, and adequate remedy in the ordinary course of law. Why the question being raised by
petitioners, i.e., whether the appellate court committed grave abuse of discretion could not have been raised on
appeal,26 no reason therefor has been advanced.

While this Court, in accordance with the liberal spirit pervading the Rules of Court and in the interest of justice, has the
discretion to treat a petition for certiorari as having been filed under Rule 45, especially if filed within the reglementary
period under said Rule, it finds nothing in the present case to warrant a liberal application of the Rules, no justification
having been proffered, as just stated, why the petition was filed beyond the reglementary period.27

Technicality aside, the petition just the same fails.

Petitioners fault the appellate court for ignoring the "evidence" they discovered when they had the opportunity to examine
the records forwarded by the DAR to the appellate court – "that Griño was misled into believing that [the] CLTs had been
issued, when there were none, or that the [September 25, 1989] Maraya Order denying Griño’s petition for cancellation of
[the] CLTs was without legal effect – because the (1) CLTs were inexistent, (2) he was dead by the time the Order was
rendered, and the property had long passed on to his heirs, and (3) the heirs were never notified of said order, and there
is no showing that it was sent even to Juan Griño, Sr.’s address of record either."

As the appellate court ruled, however, petitioners are guilty of laches in their attempt to "resurrect the retention issue
[seven and a half] years after its denial was decreed and came to finality."

As the appellate court ruled too, the DAR cannot be faulted if no substitution of parties took place when Griño died, it
being the duty of the heirs to attend to the estate of the deceased, which duty includes notification to adjudicating tribunals
the fact of death of the litigant.

At all events, these issues raised by petitioners, which substantially reiterate those raised in their motion for
reconsideration before the appellate court, were as the appellate court observed, never raised in the proceedings below
nor in petitioners’ petition for review before said court.

WHEREFORE, the petition is DISMISSED.

Costs against petitioners.

SO ORDERED.

G.R. No. 159674 June 30, 2006

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

DECISION

CHICO-NAZARIO, J.:
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, seeking the review and reversal of the
Resolutions1 of the Court of Appeals dated 27 January 2003 and 28 August 2003, respectively.

The factual and procedural antecedents are as follows:

The petitioners, with the exception of two, are the recipients of Emancipation Patents (EPs) over parcels of land located at
Barangay Angas, Sta. Josefa, Agusan del Sur, with their respective Transfer Certificate of Title (TCT) and EP numbers
presented below:

Areas
Petitioners TCT/EP Nos.
(has.)
1. SAMUEL ESTRIBILLO TCT No. T-287/EP No. A-037675 1.7833
2. CALIXTO P. ABAYATO, JR. TCT No. T-297/EP No. A-037814 2.0000
TCT No. T-829/EP No. A-027293 0.1565
3. RONGIE D. AGUILAR TCT No. T-913/EP No. A-027295 3.1441
4. TACIANA D. AGUILAR TCT No. T-944/EP No. A-027296 4.2405
5. ARTEMIO G. DE JUAN TCT No. T-302/EP No. A-037809 3.3082
6. ESTANISLAO DELA CRUZ, SR. TCT No. T-290/EP No. A-035676 3.1437
7. EDGAR DUENAS TCT No. T-949/EP No. A-037658 4.0128
8. MARIO P. ERIBAL TCT No. T-952/EP No. A-037836 2.3087
9. REYNALDO C. ESENCIA TCT No. T-950/EP No. A-037844 2.0950
10. RUBEN A. IBOJO TCT No. T-928/EP No. A-037873 1.5737
11. SAMUEL JAMANDRE TCT No. T-909/EP No. A-159348 2.2670
12. HILARION V. LANTIZA TCT No. T-288/EP No. A-037674 4.5526
TCT No. T-401/EP No. A-037825 0.4579
13. ANSELMO LOPEZ TCT No. T-973/EP No. A-037840 4.4939
14. TERESITA NACION TCT No. T-900/EP No. A-037849 2.2140
15. CHARIE E. NASTOR TCT No. T-825/EP No. A-037829 3.9291
16. NELSON L. NULLAS TCT No. T-396/EP No. A-037826 2.7491
17. CARLITO S. OLIA TCT No. T-910/EP No. A-037673 1.7954
18. ROBERTO T.PATIÑO TCT No. T-912/EP No. A-037860 6.4266
19. ANTONIO P. ROCHA TCT No. T-914/EP No. A-037830 2.2143
20. FERNANDO C. RUFINO TCT No. T-923/EP No. A-037848 4.5322
21. PATERNO P. SAIN TCT No. T-954/EP No. A-037813 4.3223
22. CLAUDIO S. SAYSON, and TCT No. T-891/EP No. A-037880 3.7151
23. JOEMARIE VIBO TCT No. T-893/EP No. A-037827 1.31852

The two other petitioners, Emma Gonzaga and Ana Patiño, are the surviving spouses of deceased recipients of EPs over
parcels of land also located at Barangay Angas, Sta. Josefa, Agusan del Sur, with their corresponding TCT and EP
numbers identified as follows:

Areas
(Deceased) Registered Owners TCT/EP Nos.
(has.)
1. MANUEL S. GONZAGA TCT No. T-920/EP No. A-037832 4.1953
 2. RAFAEL PATIÑO TCT No. T-929/EP No. A-037861 3.00783

The parcels of land described above, the subject matters in this Petition, were formerly part of a forested area which have
been denuded as a result of the logging operations of respondent Hacienda Maria, Inc. (HMI). Petitioners, together with
other persons, occupied and tilled these areas believing that the same were public lands. HMI never disturbed petitioners
and the other occupants in their peaceful cultivation thereof.

HMI acquired such forested area from the Republic of the Philippines through Sales Patent No. 2683 in 1956 by virtue of
which it was issued OCT No. P-3077-1661. The title covered three parcels of land with a total area of 527.8308 hectares,
to wit:

Area
Lot No.
(in hectares)
Lot No. 1620, Pls – 4 28.52
Lot No. 1621, Pls – 4 11.64
Lot No. 1622, Pls – 4 487.47
TOTAL 527.834

On 21 October 1972, Presidential Decree No. 275 was issued mandating that tenanted rice and corn lands be brought
under Operation Land Transfer and awarded to farmer-beneficiaries.

HMI, through a certain Joaquin Colmenares, requested that 527.8308 hectares of its landholdings be placed under the
coverage of Operation Land Transfer. Receiving compensation therefor, HMI allowed petitioners and other occupants to
cultivate the landholdings so that the same may be covered under said law.

In 1973, the Department of Agrarian Reform (DAR) conducted a parcellary mapping of the entire landholdings of
527.8308 hectares covered by OCT No. P-3077-1661. In 1975 and 1976, the DAR approved the Parcellary Map
Sketching (PMS) and the Amended PMS covering the entire landholdings.

HMI, through its representatives, actively participated in all relevant proceedings, including the determination of the
Average Gross Production per hectare at the Barangay Committee on Land Production, and was a signatory of an
undated Landowner and Tenant Production Agreement (LTPA), covering the 527.8308 hectares. The LTPA was
submitted to the Land Bank of the Philippines (LBP) in 1977.

Also in 1977, HMI executed a Deed of Assignment of Rights in favor of petitioners, among other persons, which was
registered with the Register of Deeds and annotated at the back of OCT No. P-3077-1661. The annotation in the OCT
showed that the entire 527.8308 hectares was the subject of the Deed of Assignment.

In 1982, a final survey over the entire area was conducted and approved. From 1984 to 1988, the corresponding TCTs
and EPs covering the entire 527.8308 hectares were issued to petitioners, among other persons.

In December 1997, HMI filed with the Regional Agrarian Reform Adjudicator (RARAD) of CARAGA, Region XIII, 17
petitions seeking the declaration of erroneous coverage under Presidential Decree No. 27 of 277.5008 hectares of its
former landholdings covered by OCT No. P-3077-1661. HMI claimed that said area was not devoted to either rice or corn,
that the area was untenanted, and that no compensation was paid therefor. The 17 petitions, which were later
consolidated, sought for the cancellation of the EPs covering the disputed 277.5008 hectares which had been awarded to
petitioners. HMI did not question the coverage of the other 250.3300 hectares under Presidential Decree No. 27 despite
claiming that the entire landholdings were untenanted and not devoted to rice and corn.

On 27 November 1998, after petitioners failed to submit a Position Paper, the RARAD rendered a Decision declaring as
void the TCTs and EPs awarded to petitioners because the land covered was not devoted to rice and corn, and neither
was there any established tenancy relations between HMI and petitioners when Presidential Decree No. 27 took effect on
21 October 1972. The Decision was based on a 26 March 1998 report submitted by the Hacienda Maria Action Team.
Petitioners’ TCTs and EPs were ordered cancelled. Petitioners filed a Motion for Reconsideration, but the same was
denied. Petitioners appealed to the Department of Agrarian Reform Adjudication Board (DARAB) which affirmed the
RARAD Decision.
After the DARAB denied petitioners’ Motion for Reconsideration, the latter proceeded to the Court of Appeals with their
Petition for Review on Certiorari. The Court of Appeals issued the following assailed Resolution:

A perusal of the petition reveals that the Verification and Certification of Non-Forum Shopping was executed by Samuel A.
Estribillo who is one of the petitioners, without the corresponding Special Power of Attorneys executed by the other
petitioners authorizing him to sign for their behalf in violation of Section 5, Rule 7 of the 1997 Rules of Civil Procedure, as
amended.

WHEREFORE, the petition is DENIED DUE COURSE and necessarily DISMISSED.6

Petitioners filed a "Motion for Reconsideration With Alternative Prayer with Leave of Court for the Admission of Special
Power of Attorney (SPA) Granted to Petitioner Samuel Estribillo by his Co-Petitioners." The Court of Appeals denied the
motion by issuing the following assailed Resolution:

Petitioners seek the reconsideration of Our Resolution promulgated on January 27, 2003 which dismissed the petition for
certiorari.

We find no reason to reverse, alter or modify the resolution sought to be reconsidered, since petitioners have failed to
show that their belated submission of the special power of attorney can be justified as against the unequivocal
requirements set forth by Sec. 5, Rule 7 of the 1997 Rules of Civil Procedure, as amended.

While it is true that the Supreme Court has recognized special circumstances that justify the relaxation of the rules on
non-forum shopping, such circumstances, however, are not present in the case at bar.

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

Since the Verification and Certification on Non-Forum shopping was executed without the proper authorization from all the
petitioners, such personal knowledge cannot be presumed to exist thereby rendering the petition fatally defective.

Par. 2, Sec. 5 of Rule 7 of the 1997 Rules of Civil Procedure, as amended states:

"Failure to comply with the foregoing requirements shall not be curable by mere amendment of the complaint or other
initiatory pleading but shall be cause for the dismissal of the case without prejudice x x x"

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

WHEREFORE, in view of the foregoing, the Motion for Reconsideration is hereby DENIED.7

Petitioners now file this present Petition contending that there had been compliance with Rule 7, Section 5 of the 1997
Rules of Civil Procedure. They further reiterate their argument that the EPs are ordinary titles which become indefeasible
one year after their registration.

The petition is impressed with merit.1awphil.net

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

Rule 7, Section 5 of the 1997 Rules of Civil Procedure was preceded by Revised Circular No. 28-91 and Administrative
Circular No. 04-94, which required a certification against forum shopping to avoid the filing of multiple petitions and
complaints involving the same issues in the Supreme Court, the Court of Appeals, and other tribunals and agencies.
Stated differently, the rule was designed to avoid a situation where said courts, tribunals and agencies would have to
resolve the same issues. Rule 7, Section 5, now provides:
Sec. 5. Certification against forum shopping. – The plaintiff or principal party shall certify under oath in the complaint or
other initiatory pleading asserting a claim for relief, or in a sworn certification annexed thereto and simultaneously filed
therewith: (a) that he has not theretofore commenced any action or filed any claim involving the same issues in any court,
tribunal or quasi-judicial agency and, to the best of his knowledge, no such other action or claim is pending therein; (b) if
there is such other pending action or claim, a complete statement of the present status thereof; and (c) if he should
thereafter learn that the same or similar action or claim has been filed or is pending, he shall report that fact within five (5)
days therefrom to the court wherein his aforesaid complaint or initiatory pleading has been filed.

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

Revised Circular No. 28-91 "was designed x x x to promote and facilitate the orderly administration of justice and should
not be interpreted with such absolute literalness as to subvert its own ultimate and legitimate objective or the goal of all
rules of procedure – which is to achieve substantial justice as expeditiously as possible."8 Technical rules of procedure
should be used to promote, not frustrate, justice.9 The same guidelines should still apply in interpreting what is now Rule
7, Section 5 of the 1997 Rules of Civil Procedure.

Petitioner Samuel A. Estribillo, in signing the Verification and Certification Against Forum Shopping, falls within the phrase
"plaintiff or principal party" who is required to certify under oath the matters mentioned in Rule 7, Section 5 of the 1997
Rules of Civil Procedure. Such was given emphasis by this Court when we held in Mendigorin v. Cabantog10 and
Escorpizo v. University of Baguio11 that the certification of non-forum shopping must be signed by the plaintiff or any of the
principal parties and not only by the legal counsel. In Condo Suite Club Travel, Inc. v. National Labor Relations
Commission,12 we likewise held that:

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

The Court of Appeals heavily relied on the seemingly conflicting case of Loquias v. Office of the Ombudsman,13 where this
Court ruled that:

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

Loquias, however, was a case involving only five petitioners seeking relief from the Resolution of the Ombudsman
charging them with violation of Republic Act No. 3019, where the above declaration "at the outset" was made together
with a determination on the lack of jurisdiction on our part to decide the Petition.14 There being only five petitioners in
Loquias, the unreasonableness of the failure to obtain the signatures of Antonio Din, Jr.’s four co-accused is immediately
apparent, hence the remark by this Court that "[p]etitioners must show reasonable cause for failure to personally sign the
certification." In the present petition, petitioners allege that they are farmer-beneficiaries who reside in a very remote
barangay in Agusan del Sur. While they reside in the same barangay, they allegedly have to walk for hours on rough
terrain to reach their neighbors due to the absence of convenient means of transportation. Their houses are located far
apart from each other and the mode of transportation, habal-habal, is scarce and difficult. Majority of them are also
nearing old age. On the other hand, their lawyers (who are members of a non-government organization engaged in
development work) are based in Quezon City who started assisting them at the latter part of the RARAD level litigation in
1998, and became their counsel of record only at the DARAB level. The petitioner who signed the initiatory pleading,
Samuel Estribillo, was the only petitioner who was able to travel to Manila at the time of the preparation of the Petition due
to very meager resources of their farmers’ organization, the Kahiusahan sa Malahutayong mga Mag-uugma Para sa
Ekonomikanhong Kalambuan (KAMMPE). When the Petition a quo was dismissed, petitioners’ counsel went to Agusan
del Sur and tried earnestly to secure all the signatures for the SPA. In fact, when the SPA was being circulated for their
signatures, 24 of the named petitioners therein failed to sign for various reasons – some could not be found within the
area and were said to be temporarily residing in other towns, while some already died because of old age.15 Be that as it
may, those who did not sign the SPA did not participate, and are not parties to this petition.

The Court of Appeals merely said that the special circumstances recognized by this Court that justify the relaxation of the
rules on the certification against forum shopping are not present in the case at bar,16 without discussing the circumstances
adduced by the petitioners in their Motion for Reconsideration. Thus, assuming for the sake of argument that the actuation
of petitioners was not strictly in consonance with Rule 7, Section 5 of the 1997 Rules of Civil Procedure, it should still be
determined whether there are special circumstances that would justify the suspension or relaxation of the rule concerning
verification and certification against forum shopping, such as those which we appreciated in the ensuing cases.

In General Milling Corporation v. National Labor Relations Commission,17 the appeal to the Court of Appeals had a
certificate against forum shopping, but was dismissed as it did not contain a board resolution authorizing the signatory of
the Certificate. Petitioners therein attached the board resolution in their Motion for Reconsideration but the Court of
Appeals, as in this case, denied the same. In granting the Petition therein, we explained that:

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

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

In Shipside Incorporated v. Court of Appeals,18 the authority of petitioner’s resident manager to sign the certification
against forum shopping was submitted to the Court of Appeals only after the latter dismissed the Petition. It turned out, in
the Motion for Reconsideration, that he already had board authority ten days before the filing of the Petition. We
ratiocinated therein that:

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

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

In the instant case, the merits of petitioner’s case should be considered special circumstances or compelling reasons that
justify tempering the requirement in regard to the certificate of non-forum shopping. Moreover, in Loyola, Roadway, and
Uy, the Court excused non-compliance with the requirement as to the certificate of non-forum shopping. With more reason
should we allow the instant petition since petitioner herein did submit a certification on non-forum shopping, failing only to
show proof that the signatory was authorized to do so. That petitioner subsequently submitted a secretary’s certificate
attesting that Balbin was authorized to file an action on behalf of petitioner likewise mitigates this oversight.
It must also be kept in mind that while the requirement of the certificate of non-forum shopping is mandatory, nonetheless
the requirements must not be interpreted too literally and thus defeat the objective of preventing the undesirable practice
of forum-shopping. Lastly, technical rules of procedure should be used to promote, not frustrate justice. While the swift
unclogging of court dockets is a laudable objective, the granting of substantial justice is an even more urgent ideal.

In Uy v. Land Bank of the Philippines,19 we, likewise, considered the apparent merits of the substantive aspect of the case
as a special circumstance or compelling reason for the reinstatement of the case, and invoked our power to suspend our
rules to serve the ends of justice. Thus:

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

There were even cases where we held that there was complete non-compliance with the rule on certification against
forum shopping, but we still proceeded to decide the case on the merits. In De Guia v. De Guia,20 petitioners raised in their
Petition for Review the allowance of respondents’ Appeal Brief which did not contain a certificate against forum shopping.
We held therein that:

With regard to the absence of a certification of non-forum shopping, substantial justice behooves us to agree with the
disquisition of the appellate court. We do not condone the shortcomings of respondents’ counsel, but we simply cannot
ignore the merits of their claim. Indeed, it has been held that "[i]t is within the inherent power of the Court to suspend its
own rules in a particular case in order to do justice."

In Damasco v. National Labor Relations Commission,21 the non-compliance was disregarded because of the principle of
social justice, which is equally applicable to the case at bar:

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

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

The foregoing cases show that, even if we assume for the sake of argument that there was violation of Rule 7, Section 5
of the 1997 Rules of Civil Procedure, a relaxation of such rule would be justified for two compelling reasons: social justice
considerations and the apparent merit of the Petition, as shall be heretofore discussed.

Certificates of Title issued pursuant to Emancipation Patents are as indefeasible as TCTs issued in registration
proceedings.

Petitioners claim that the EPs have become indefeasible upon the expiration of one year from the date of its issuance.
The DARAB, however, ruled that the EP "is a title issued through the agrarian reform program of the government. Its
issuance, correction and cancellation is governed by the rules and regulations issued by the Secretary of the Department
of Agrarian Reform (DAR). Hence, it is not the same as or in the same category of a Torrens title."

The DARAB is grossly mistaken.

Ybañez v. Intermediate Appellate Court,22 provides that certificates of title issued in administrative proceedings are as
indefeasible as certificates of title issued in judicial proceedings:

It must be emphasized that a certificate of title issued under an administrative proceeding pursuant to a homestead
patent, as in the instant case, is as indefeasible as a certificate of title issued under a judicial registration proceeding,
provided the land covered by said certificate is a disposable public land within the contemplation of the Public Land Law.
There is no specific provision in the Public Land Law (C.A. No. 141, as amended) or the Land Registration Act (Act 496),
now P.D. 1529, fixing the one (1) year period within which the public land patent is open to review on the ground of actual
fraud as in Section 38 of the Land Registration Act, now Section 32 of P.D. 1529, and clothing a public land patent
certificate of title with indefeasibility. Nevertheless, the pertinent pronouncements in the aforecited cases clearly reveal
that Section 38 of the Land Registration Act, now Section 32 of P.D. 1529 was applied by implication by this Court to the
patent issued by the Director of Lands duly approved by the Secretary of Natural Resources, under the signature of the
President of the Philippines in accordance with law. The date of issuance of the patent, therefore, corresponds to the date
of the issuance of the decree in ordinary registration cases because the decree finally awards the land applied for
registration to the party entitled to it, and the patent issued by the Director of Lands equally and finally grants, awards, and
conveys the land applied for to the applicant. This, to our mind, is in consonance with the intent and spirit of the
homestead laws, i.e. conservation of a family home, and to encourage the settlement, residence and cultivation and
improvement of the lands of the public domain. If the title to the land grant in favor of the homesteader would be subjected
to inquiry, contest and decision after it has been given by the Government through the process of proceedings in
accordance with the Public Land Law, there would arise uncertainty, confusion and suspicion on the government’s system
of distributing public agricultural lands pursuant to the "Land for the Landless" policy of the State.

The same confusion, uncertainty and suspicion on the distribution of government-acquired lands to the landless would
arise if the possession of the grantee of an EP would still be subject to contest, just because his certificate of title was
issued in an administrative proceeding. The silence of Presidential Decree No. 27 as to the indefeasibility of titles issued
pursuant thereto is the same as that in the Public Land Act where Prof. Antonio Noblejas commented:

Inasmuch as there is no positive statement of the Public Land Law, regarding the titles granted thereunder, such silence
should be construed and interpreted in favor of the homesteader who come into the possession of his homestead after
complying with the requirements thereof. Section 38 of the Land Registration Law should be interpreted to apply by
implication to the patent issued by the Director of Lands, duly approved by the Minister of Natural Resources, under the
signature of the President of the Philippines, in accordance with law.23

After complying with the procedure, therefore, in Section 105 of Presidential Decree No. 1529, otherwise known as the
Property Registration Decree (where the DAR is required to issue the corresponding certificate of title after granting an EP
to tenant-farmers who have complied with Presidential Decree No. 27), 24 the TCTs issued to petitioners pursuant to their
EPs acquire the same protection accorded to other TCTs. "The certificate of title becomes indefeasible and
incontrovertible upon the expiration of one year from the date of the issuance of the order for the issuance of the patent, x
x x. Lands covered by such title may no longer be the subject matter of a cadastral proceeding, nor can it be decreed to
another person."25

As we held through Justice J.B.L. Reyes in Lahora v. Dayanghirang, Jr.26 :

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

The EPs themselves, like the Certificates of Land Ownership Award (CLOAs) in Republic Act No. 6657 (the
Comprehensive Agrarian Reform Law of 1988), are enrolled in the Torrens system of registration. The Property
Registration Decree in fact devotes Chapter IX27 on the subject of EPs. Indeed, such EPs and CLOAs are, in themselves,
entitled to be as indefeasible as certificates of title issued in registration proceedings.

The only defense of respondents, that the issue of indefeasibility of title was raised for the first time on appeal with the
DARAB, does not hold water because said issue was already raised before the RARAD.28

The recommendation of the Hacienda Maria Action Team to have the EPs cancelled and the lots covered under the
Republic Act No. 6657,29 with the farmer-beneficiaries later on being issued with CLOAs, would only delay the application
of agrarian reform laws to the disputed 277.5008 hectares, leading to the expenditure of more time and resources of the
government.

The unreasonable delay of HMI in filing the Petition for cancellation more than 20 years after the alleged wrongful
annotation of the Deed of Assignment in OCT No. P-3077-1661, and more than ten years after the issuance of the TCTs
to the farmers, is apparently motivated by its desire to receive a substantially higher valuation and just compensation
should the disputed 277.5008 hectares be covered under Republic Act No. 6657 instead of Presidential Decree No.
27.30 This is further proved by the following uncontested allegations by petitioners:

(i) HMI neither asked for rentals nor brought any action to oust petitioners from the farm they were cultivating;

(ii) HMI had not paid realty taxes on the disputed property from 1972 onwards and never protested petitioners’ act
of declaring the same for realty taxation;

(iii) HMI, represented by a certain Angela Colmenares, signed the LTPA covering the entire landholdings or the
area of 527.8308 hectares, which was then represented to be rice and corn lands;

(iv) HMI abandoned the entire landholdings after executing the Deed of Assignment of Rights in 1977.

WHEREFORE, the Resolutions of the Court of Appeals in CA-G.R. SP No. 73902 are REVERSED and SET ASIDE. The
following EPs and the corresponding TCTs issued to petitioners or to their successors-in-interest are hereby declared
VALID and SUBSISTING:

Original Grantees TCT/EP Nos.

1. SAMUEL ESTRIBILLO TCT No. T-287/EP No. A-037675
2. CALIXTO P. ABAYATO, JR. TCT No. T-297/EP No. A-037814
TCT No. T-829/EP No. A-027293
3. RONGIE D. AGUILAR TCT No. T-913/EP No. A-027295
4. TACIANA D. AGUILAR TCT No. T-944/EP No. A-027296
5. ARTEMIO G. DE JUAN, TCT No. T-302/EP No. A-037809
6. ESTANISLAO DELA CRUZ, SR. TCT No. T-290/EP No. A-035676
7. EDGAR DUENAS TCT No. T-949/EP No. A-037658
8. MARIO P. ERIBAL TCT No. T-952/EP No. A-037836
9. REYNALDO C. ESENCIA TCT No. T-950/EP No. A-037844
10. RUBEN A. IBOJO TCT No. T-928/EP No. A-037873
11. SAMUEL JAMANDRE TCT No. T-909/EP No. A-159348
12. HILARION V. LANTIZA TCT No. T-288/EP No. A-037674
TCT No. T-401/EP No. A-037825
13. ANSELMO LOPEZ TCT No. T-973/EP No. A-037840
14. TERESITA NACION TCT No. T-900/EP No. A-037849
15. CHARIE E. NASTOR TCT No. T-825/EP No. A-037829
16. NELSON L. NULLAS TCT No. T-396/EP No. A-037826
17. CARLITO S. OLIA TCT No. T-910/EP No. A-037673
18. ROBERTO T.PATIÑO TCT No. T-912/EP No. A-037860
19. ANTONIO P. ROCHA TCT No. T-914/EP No. A-037830
20. FERNANDO C. RUFINO TCT No. T-923/EP No. A-037848
21. PATERNO P. SAIN TCT No. T-954/EP No. A-037813
22. CLAUSIO S. SAYSON TCT No. T-891/EP No. A-037880
23. JOEMARIE VIBO TCT No. T-893/EP No. A-037827
24. MANUEL S. GONZAGA TCT No. T-920/EP No. A-037832
 25. RAFAEL PATIÑO TCT No. T-297/EP No. A-037861

Costs against respondent Hacienda Maria, Inc.

SO ORDERED.

G.R. No. 79269             June 5, 1991

PEOPLE OF THE PHILIPPINES, petitioner,

vs.
HON. PROCORO J. DONATO, in his official capacity as Presiding Judge, Regional Trial Court, Branch XII, Manila;
RODOLFO C. SALAS, alias Commander Bilog, respondents.

The Solicitor General for petitioner.

Jose Suarez, Romeo Capulong, Efren Mercado and Movement of Attorneys for Brotherhood, Integrity, Nationalism, Inc.
(MABINI) for Rodolfo Salas.

DAVIDE, JR., J.:

The People of the Philippines, through the Chief State Prosecutor of the Department of Justice, the City Fiscal of Manila
and the Judge Advocate General, filed the instant petition for certiorari and prohibition, with a prayer for restraining
order/preliminary injunction, to set aside the order of respondent Judge dated July 7, 1987 granting bail to the accused
Rodolfo Salas alias "Commander Bilog" in Criminal Case No. 86-48926 for Rebellion,1 and the subsequent Order dated
July 30, 1987 granting the motion for reconsideration of 16 July 1987 by increasing the bail bond from P30,000.00 to
P50,000.00 but denying petitioner's supplemental motion for reconsideration of July 17, 1987 which asked the court to
allow petitioner to present evidence in support of its prayer for a reconsideration of the order of 7 July 1987.

The pivotal issues presented before Us are whether the right to bail may, under certain circumstances, be denied to a
person who is charged with an otherwise bailable offense, and whether such right may be waived.

The following are the antecedents of this petition:

In the original Information2 filed on 2 October 1986 in Criminal Case No. 86-48926 of the Regional Trial Court of Manila,
later amended in an Amended Information3 which was filed on 24 October 1986, private respondent Rodolfo
Salas, alias "Commander Bilog", and his co-accused were charged for the crime of rebellion under Article 134, in relation
to Article 135, of the Revised Penal Code allegedly committed as follows:

That in or about 1968 and for some time before said year and continuously thereafter until the present time, in the
City of Manila and elsewhere in the Philippines, the Communist Party of the Philippines, its military arm, the New
People's Army, its mass infiltration network, the National Democratic Front with its other subordinate
organizations and fronts, have, under the direction and control of said organizations' leaders, among whom are
the aforenamed accused, and with the aid, participation or support of members and followers whose whereabouts
and identities are still unknown, risen publicly and taken arms throughout the country against the Government of
the Republic of the Philippines for the purpose of overthrowing the present Government, the seat of which is in the
City of Manila, or of removing from the allegiance to that government and its laws, the country's territory or part of
it;

That from 1970 to the present, the above-named accused in their capacities as leaders of the aforenamed
organizations, in conspiracy with, and in support of the cause of, the organizations aforementioned, engaged
themselves in war against the forces of the government, destroying property or committing serious violence, and
other acts in the pursuit of their unlawful purpose, such as . . .

(then follows the enumeration of specific acts committed before and after February 1986).
At the time the Information was filed the private respondent and his co-accused were in military custody following their
arrest on 29 September 1986 at the Philippine General Hospital, Taft Ave., Manila; he had earlier escaped from military
detention and a cash reward of P250,000.00 was offered for his
capture.4

A day after the filing of the original information, or on 3 October 1986, a petition for habeas corpus for private respondent
and his co-accused was filed with this Court5 which, as shall hereafter be discussed in detail, was dismissed in Our
resolution of 16 October 1986 on the basis of the agreement of the parties under which herein private respondent "will
remain in legal custody and will face trial before the court having custody over his person" and the warrants for the arrest
of his co-accused are deemed recalled and they shall be immediately released but shall submit themselves to the court
having jurisdiction over their person.

On November 7, 1986 , private respondent filed with the court below a Motion to Quash the Information alleging that: (a)
the facts alleged do not constitute an offense; (b) the Court has no jurisdiction over the offense charged; (c) the Court has
no jurisdiction over the persons of the defendants; and (d) the criminal action or liability has been extinguished,6 to which
petitioner filed an Opposition7 citing, among other grounds, the fact that in the Joint Manifestation and Motion dated
October 14, 1986, in G.R. No. 76009, private respondent categorically conceded that:

x x x           x x x          x x x

Par. 2 (B) — Petitioner Rodolfo Salas will remain in legal custody and face trial before the court having custody
over his person.

In his Order of March 6, 1987,8 respondent Judge denied the motion to quash.

Instead of asking for a reconsideration of said Order, private respondent filed on 9 May 1987 a petition for bail,9 which
herein petitioner opposed in an Opposition filed on 27 May 198710 on the ground that since rebellion became a capital
offense under the provisions of P.D. Nos. 1996, 942 and 1834, which amended Article 135 of the Revised Penal Code, by
imposing the penalty of reclusion perpetua to death on those who promote, maintain, or head a rebellion the accused is
no longer entitled to bail as evidence of his guilt is strong.

On 5 June 1987 the President issued Executive Order No. 187 repealing, among others, P.D. Nos. 1996, 942 and 1834
and restoring to full force and effect Article 135 of the Revised Penal Code as it existed before the amendatory decrees.
Thus, the original penalty for rebellion,  prision mayor and a fine not to exceed P20,000.00, was restored.

Executive Order No. 187 was published in the Official Gazette in its June 15, 1987 issue (Vol. 83, No. 24) which was
officially released for circulation on June 26, 1987.

In his Order of 7 July 198711 respondent Judge, taking into consideration Executive Order No. 187, granted private
respondent's petition for bail, fixed the bail bond at P30,000.00 and imposed upon private respondent the additional
condition that he shall report to the court once every two (2) months within the first ten (10) days of every period thereof.
In granting the petition respondent Judge stated:

. . . There is no more debate that with the effectivity of Executive Order No. 187, the offense of rebellion, for which
accused Rodolfo Salas is herein charged, is now punishable with the penalty of  prision mayor and a fine not
exceeding P20,000.00, which makes it now bailable pursuant to Section 13, Article III, 1986 Constitution and
Section 3, Rule 114, 1985 Rules of Criminal Procedure. Unlike the old rule, bail is now a matter of right in non-
capital offenses before final judgment. This is very evident upon a reading of Section 3, Rule 114,
aforementioned, in relation to Section 21, same rule. In view, therefore, of the present circumstances in this case,
said accused-applicant is now entitled to bail as a matter of right inasmuch as the crime of rebellion ceased to be
a capital offense.

As to the contention of herein petitioner that it would be dangerous to grant bail to private respondent considering his
stature in the CPP-NPA hierarchy, whose ultimate and overriding goal is to wipe out all vestiges of our democracy and to
replace it with their ideology, and that his release would allow his return to his organization to direct its armed struggle to
topple the government before whose courts he invokes his constitutional right to bail, respondent Judge replied:

True, there now appears a clash between the accused's constitutional right to bail in a non-capital offense, which
right is guaranteed in the Bill of Rights and, to quote again the prosecution, "the existence of the government that
bestows the right, the paramount interest of the state." Suffice to state that the Bill of Rights, one of which is the
 right to bail, is a "declaration of the rights of the individual, civil, political and social and economic, guaranteed by
the Constitution against impairment or intrusion by any form of governmental action. Emphasis is placed on the
dignity of man and the worth of individual. There is recognition of certain inherent and inalienable rights of the
individual, which the government is prohibited from violating" (Quisumbing-Fernando, Philippine Constitutional
Law, 1984 Edition, p. 77). To this Court, in case of such conflict as now pictured by the prosecution, the same
should be resolved in favor of the individual who, in the eyes of the law, is alone in the assertion of his rights
under the Bill of Rights as against the State. Anyway, the government is that powerful and strong, having the
resources, manpower and the wherewithals to fight those "who oppose, threathen (sic) and destroy a just and
orderly society and its existing civil and political institutions." The prosecution's fear may or may not be founded
that the accused may later on jump bail and rejoin his comrades in the field to sow further disorders and anarchy
against the duly constituted authorities. But, then, such a fear can not be a reason to deny him bail. For the law is
very explicit that when it comes to bailable offenses an accused is entitled as a matter of light to bail. Dura est lex
sed lex.

In a motion to reconsider12 the above order filed on 16 July 1987, petitioner asked the court to increase the bail from
P30,000.00 to P100,000.00 alleging therein that per Department of Justice Circular No. 10 dated 3 July 1987, the bail for
the, provisional release of an accused should be in an amount computed at P10,000.00 per year of imprisonment based
on the medium penalty imposable for the offense and explaining that it is recommending P100,000.00 because the private
respondent "had in the past escaped from the custody of the military authorities and the offense for which he is charged is
not an ordinary crime, like murder, homicide or robbery, where after the commission, the perpetrator has achieved his
end" and that "the rebellious acts are not consummated until the well-organized plan to overthrow the government through
armed struggle and replace it with an alien system based on a foreign ideology is attained."

On 17 July 1987, petitioner filed a supplemental motion for reconsideration13 indirectly asking the court to deny bail to the
private respondent and to allow it to present evidence in support thereof considering the "inevitable probability that the
accused will not comply with this main condition of his bail –– to appear in court for trial," a conclusion it claims to be
buttressed "by the following facts which are widely known by the People of the Philippines and which this Honorable Court
may have judicial notice of:

1. The accused has evaded the authorities for thirteen years and was an escapee from detention when arrested;

2. He was not arrested at his residence as he had no known address;

3. He was using the false name "Manuel Mercado Castro" at the time of his arrest and presented a Driver's
License to substantiate his false identity;

4. The address he gave "Panamitan, Kawit, Cavite," turned out to be also a false address;

5. He and his companions were on board a private vehicle with a declared owner whose identity and address
were also found to be false;

6. Pursuant to Ministry Order No. 1-A dated 11 January 1982 , a reward of P250,000.00 was offered and paid for
his arrest,

which "clearly indicate that the accused does not entertain the slightest intention to appear in court for trial, if released."
Petitioner further argues that the accused, who is the Chairman of the Communist Party of the Philippines and head of its
military arm, the NPA, together with his followers, are now engaged in an open warfare and rebellion against this
government and threatens the existence of this very Court from which he now seeks provisional release," and that while
he is entitled to bail as a matter of right in view of Executive Order No. 187 which restored the original penalty for rebellion
under Article 135 of the Revised Penal Code, yet, when the interest of the State conflicts with that of an individual, that of
the former prevails for "the right of the State of self-preservation is paramount to any of the rights of an individual
enshrined in the Bill of Rights of the Constitution." Petitioner further invokes precedents in the United States of America
holding "that there is no absolute constitutional barrier to detention of potentially dangerous resident aliens pending
deportation proceedings,14 and that an arrestee may be incarcerated until trial as he presents a risk of flight;15 and
sustaining a detention prior to trial of arrestee charged with serious felonies who are found after an adversary hearing to
pose threat to the safety of individuals and to the community which no condition of release can dispel.16

On 30 July 1987 respondent Judge handed down the Order17 adverted to in the introductory portion of this decision the
dispositive portion of which reads:
 WHEREFORE, in the light of the foregoing considerations, the Court finds the "supplemental" motion for
reconsideration to be without merit and hereby denies it but finds the first motion for reconsideration to be
meritorious only insofar as the amount of bail is concerned and hereby reconsiders its Order of July 7, 1987 only
to increase the amount of bail from P30,000.00 to P50,000.00, subject to the approval of this Court, and with the
additional condition that accused Rodolfo Salas shall report to the court once every two (2) months within the first
ten (10) days of every period thereof (Almendras vs. Villaluz, et al., L-31665, August 6, 1975, 66 SCRA 58).

In denying the supplemental motion for reconsideration the respondent Judge took into account the "sudden turn-about"
on the part of the petitioner in that a day earlier it filed a motion for reconsideration wherein it conceded the right of the
private respondent to bail but merely asked to increase the amount of bail; observed that it is only a reiteration of
arguments in its opposition to the petition for bail of 25 May 1987; asserted that the American precedents are not
applicable since the cases involved deportation of aliens and, moreover, the U.S. Federal Constitution does not contain a
proviso on the right of an accused to bail in bailable offenses, but only an injunction against excessive bail; and quoted the
concurring opinion of the late Justice Pedro Tuason in the cases of Nava, et al. vs. Gatmaitan, L-4853, Hernandez vs.
Montesa, L-4964 and Angeles vs. Abaya, L-5108, October 11, 1951, 90 Phil, 172.

Unable to agree with said Order, petitioner commenced this petition submitting therein the following issues:

THE HONORABLE RESPONDENT JUDGE PROCORO J. DONATO ACTED WITH GRAVE ABUSE OF
DISCRETION AND IN EXCESS OF HIS JURISDICTION, AND IN TOTAL DISREGARD OF THE PREVAILING
REALITIES, WHEN HE DENIED PETITIONER'S SUPPLEMENTAL MOTION FOR RECONSIDERATION WITH
PRAYER TO BE GIVEN THE OPPORTUNITY TO ADDUCE EVIDENCE IN SUPPORT OF ITS OPPOSITION TO
THE GRANT OF BAIL TO THE RESPONDENT RODOLFO SALAS.

THE HONORABLE RESPONDENT JUDGE PROCORO J. DONATO ACTED WITH GRAVE ABUSE OF
DISCRETION AND IN EXCESS OF HIS JURISDICTION WHEN HE GRANTED BAIL TO THE RESPONDENT
RODOLFO SALAS.

in support of which petitioner argues that private respondent is estopped from invoking his right to bail, having expressly
waived it in G.R. No. 76009 when he agreed to "remain in legal custody and face trial before the court having custody of
his person" in consideration of the recall of the warrant of arrest for his co-petitioners Josefina Cruz and Jose Concepcion;
and the right to bail, even in non-capital offenses, is not absolute when there is  prima facie evidence that the accused is a
serious threat to the very existence of the State, in which case the prosecution must be allowed to present evidence for
the denial of bail. Consequently, respondent Judge acted with grave abuse of discretion when he did not allow petitioner
to present all the evidence it may desire to support its prayer for the denial of bail and when he declared that the State has
forfeited its right to do so since during all the time that the petition for bail was pending, it never manifested, much less
hinted, its intention to adduce such evidence. And that even if release on bail may be allowed, respondent judge, in fixing
the amount of bail at P50,000.00 (originally P30,000.00 only), failed to take into account the lengthy record of private
respondents' criminal background, the gravity of the pending charge, and the likelihood of flight.18

In Our resolution of 11 August 198719 We required the respondents to comment on the petition and issued a Temporary
Restraining Order ordering respondent Judge to cease and desist from implementing his order of 30 July 1987 granting
bail to private respondent in the amount of P50,000.00.

In his Comment filed on 27 August 1987,20 private respondent asks for the outright dismissal of the petition and immediate
lifting of the temporary restraining order on the following grounds:

RESPONDENT SALAS NEVER WAIVED HIS RIGHT TO BAIL; NEITHER IS HE ESTOPPED FROM
ASSERTING SAID RIGHT. ON THE CONTRARY IT IS PETITIONER WHO IS ESTOPPED FROM RAISING THE
SAID ISSUE FOR THE FIRST TIME ON APPEAL.

II

RESPONDENT SALAS ENJOYS NOT ONLY THE CONSTITUTIONAL RIGHT TO BE PRESUMED INNOCENT
BUT ALSO THE RIGHT TO BAIL.

III
 RESPONDENT SALAS IS NOT CHARGED WITH A CAPITAL OFFENSE (RECLUSION PERPETUA), HENCE
HE HAS THE RIGHT TO BAIL AS MANDATED BY THE CONSTITUTION.

IV

THE ORDER OF JULY 30, 1987 DENYING PETITIONER OPPORTUNITY TO PRESENT EVIDENCE IS
CORRECT. PETITIONER'S ALLEGED RIGHT TO PRESENT EVIDENCE IS NON-EXISTENT AND/OR HAD
BEEN WAIVED.

THE ISSUANCE OF A TEMPORARY RESTRAINING ORDER IN THIS CASE VIOLATES NOT ONLY
RESPONDENT SALAS' RIGHT TO BAIL BUT ALSO HIS OTHER CONSTITUTIONAL RIGHT TO DUE
PROCESS.

We required the petitioner to reply to the comment of private respondent.21 The reply was filed on 18 September 1987.22

In Our resolution of 15 October 198723 We gave due course to the petition and required the parties to file simultaneously
their memoranda within twenty days from notice.

In their respective manifestations and motions dated 5 November24 and 23 November 198725 petitioner and private
respondents asked to be excused from filing their Memoranda and that the petition and reply be considered as the
Memorandum for petitioner and the Comment as the Memorandum for private respondent, which We granted in Our
resolution of 19 November 198726 and 1 December 1987,27 respectively.

In Our resolution of 14 September 1989 We required the Solicitor General to express his stand on the issues raised in this
petitions,28 which he complied with by filing his Manifestation on 30 May 199029 wherein he manifests that he supports the
petition and submits that the Order of respondent Judge of July 7, July 17 and July 30, 1987 should be annulled and set
aside asserting that private respondent had waived the light to bail in view of the agreement in G.R. No. 76009; that
granting bail to him is accepting wide-eyed his undertaking which he is sure to break; in determining bail, the primary
consideration is to insure the attendance of the accused at the trial of the case against him which would be frustrated by
the "almost certainty that respondent Salas will lump bail of whatever amount"; and application of the guidelines provided
for in Section 10 of Rule 114, 1985 Rules on Criminal Procedure on the amount of bail dictates denial of bail to private
respondent. The Solicitor General likewise maintains that the right of the petitioner to hearing on the application of private
respondent for bail cannot be denied by respondent Judge.

And now on the issues presented in this case.

I.

Unquestionably, at the time the original and the amended Informations for rebellion and the application for bail were filed
before the court below the penalty imposable for the offense for which the private respondent was charged was reclusion
perpetua to death. During the pendency of the application for bail Executive Order No. 187 was issued by the President,
by virtue of which the penalty for rebellion as originally provided for in Article 135 of the Revised Penal Code was
restored. The restored law was the governing law at the time the respondent court resolved the petition for bail.

We agree with the respondent court that bail cannot be denied to the private respondent for he is charged with the crime
of rebellion as defined in Article 134 of the Revised Penal Code to which is attached the penalty of prision mayor and a
fine not exceeding P20,000.00.30 It is, therefore, a bailable offense under Section 13 of Article III of the 1987 Constitution
which provides thus:

Sec. 13. All persons, except those charged with offenses punishable by reclusion perpetua when evidence of guilt
is strong, shall, before conviction, be bailable by sufficient sureties, or be released on recognizance as may be
prescribed by law. The right to bail shall not be impaired even when the privilege of the writ of habeas corpus is
suspended. Excessive bail shall not be required.

Section 3, Rule 114 of the Rules of Court, as amended, also provides:

 Bail, a matter of right: exception. — All persons in custody shall, before final conviction, be entitled to bail as a
matter of right, except those charged with a capital offense or an offense which, under the law at the time of its
commission and at the time of the application for bail, is punishable by reclusion perpetua, when evidence of guilt
is strong.

Therefore, before conviction bail is either a matter of right or of discretion. It is a matter of right when the offense charged
is punishable by any penalty lower than  reclusion perpetua.31 To that extent the right is absolute.32

And so, in a similar case for rebellion, People vs. Hernandez, et al., 99 Phil. 515, despite the fact that the accused was
already convicted, although erroneously, by the trial court for the complex crime of rebellion with multiple murders, arsons
and robberies, and sentenced to life imprisonment, We granted bail in the amount of P30,000.00 during the pendency of
his appeal from such conviction. To the vigorous stand of the People that We must deny bail to the accused because the
security of the State so requires, and because the judgment of conviction appealed from indicates that the evidence of
guilt of Hernandez is strong, We held:

. . . Furthermore, individual freedom is too basic, too transcendental and vital in a republican state, like ours, to be
derived upon mere general principles and abstract consideration of public safety. Indeed, the preservation of
liberty is such a major preoccupation of our political system that, not satisfied with guaranteeing its enjoyment in
the very first paragraph of section (1) of the Bill of Rights, the framers of our Constitution devoted paragraphs (3),
(4), (5), (6), (7), (8), (11), (12), (13), (14), (15), (16), (17), (18), and (21) of said section (1) to the protection of
several aspects of freedom.

The 1987 Constitution strengthens further the right to bail by explicitly providing that it shall not be impaired even when
the privilege of the writ of habeas corpus is suspended. This overturns the Court's ruling in Garcia-Padilla vs. Enrile, et
al., supra., to wit:

The suspension of the privilege of the writ of habeas corpus must, indeed, carry with it the suspension of the right
to bail, if the government's campaign to suppress the rebellion is to be enhanced and rendered effective. If the
right to bail may be demanded during the continuance of the rebellion, and those arrested, captured and detained
in the course thereof will be released, they would, without the least doubt, rejoin their comrades in the field
thereby jeopardizing the success of government efforts to bring to an end the invasion, rebellion or insurrection.

Upon the other hand, if the offense charged is punishable by reclusion perpetua bail becomes a matter of discretion. It
shall be denied if the evidence of guilt is strong. The court's discretion is limited to determining whether or not evidence of
guilt is strong.33 But once it is determined that the evidence of guilt is not strong, bail also becomes a matter of right.
In Teehankee vs. Director of Prisons, supra., We held:

The provision on bail in our Constitution is patterned after similar provisions contained in the Constitution of the
United States and that of many states of the Union. And it is said that:

The Constitution of the United States and the constitution of the many states provide that all persons shall
be bailable by sufficient sureties, except for capital offenses, where the proof is evident or the
presumption of guilt is great, and, under such provisions, bail is a matter of right which no court or judge
can properly refuse, in all cases not embraced in the exceptions. Under such provisions bail is a matter of
right even in cases of capital offenses, unless the proof of guilt is evident or the presumption thereof is
great!34

Accordingly, the prosecution does not have the right to present evidence for the denial of bail in the instances
where bail is a matter of right. However, in the cases where the grant of bail is discretionary, due process requires
that the prosecution must be given an opportunity to present, within a reasonable time, all the evidence that it may
desire to introduce before the court should resolve the motion for bail.35

We agree, however, with petitioner that it was error for the respondent court to fix the bond at P30,000.00, then
later at P50,000.00 without hearing the prosecution. The guidelines for the fixing of the amount of bail provided for
in Section 10 of Rule 114 of the Rules of Court are not matters left entirely to the discretion of the court. As We
stated in People vs. Dacudao, et al., 170 SCRA, 489, 495:

Certain guidelines in the fixing of a bailbond call for the presentation of evidence and reasonable
opportunity for the prosecution to refute it. Among them are the nature and circumstances of the crime,
character and reputation of the accused, the weight of the evidence against him, the probability of the
 accused appearing at the trial, whether or not the accused is a fugitive from justice, and whether or not
the accused is under bond in other case. . . .

In the instant case petitioner has sufficiently made out allegations which necessitate a grant of an opportunity to
be heard for the purpose of determining the amount of bail, but not for the denial thereof because aforesaid
Section 10 of Rule 114 does not authorize any court to deny bail.

II.

It must, however, be stressed that under the present state of the law, rebellion is no longer punishable by  prision
mayor and fine not exceeding P20,000.00. Republic Act No. 6968 approved on 24 October 1990 and which took
effect after publication in at least two newspapers of general circulation, amended, among others, Article 135 of
the Revised Penal Code by increasing the penalty for rebellion such that, as amended, it now reads:

Article 135. Penalty for rebellion, insurrection or coup d'etat. ––– Any person who promotes, maintains, or
heads a rebellion or insurrection shall suffer the penalty of reclusion perpetua.

Any person merely participating or executing the commands of others in a rebellion or insurrection shall
suffer the penalty of reclusion perpetua.

x x x           x x x          x x x

This amendatory law cannot apply to the private respondent for acts allegedly committed prior to its effectivity. It is
not favorable to him. "Penal laws shall have a retroactive effect insofar as they favor the person guilty of a felony,
who is not a habitual criminal, as this term is defined in Rule 5 of Article 62 of this Code, although at the time of
the publication of such laws a final sentence has been pronounced and the convict is serving the same.36

III.

We agree with Petitioner that private respondent has, however, waived his right to bail in G.R. No. 76009.

On 3 October 1986, or the day following the filing of the original information in Criminal Case No. 86-48926 with
the trial court, a petition for habeas corpus for herein private respondent, and his co-accused Josefina Cruz and
Jose Concepcion, was filed with this Court by Lucia Cruz, Aida Concepcion Paniza and Beatriz Salas against
Juan Ponce Enrile, Gen. Fidel Ramos, Brig. Gen. Renato de Villa, Brig. Gen. Ramon Montaño, and Col.
Saldajeno praying, among others, that the petition be given due course and a writ of habeas corpus be issued
requiring respondents to produce the bodies of herein private respondent and his co-accused before the Court
and explain by what authority they arrested and detained them. The following proceedings took place thereafter in
said case:

1. In a resolution of 7 October 1986 We issued a writ of habeas corpus, required respondents to make a return of
the writ on or before the close of office hours on 13 October and set the petition for hearing on 14 October 1986 at
10:00 o'clock in the morning.

2. On 13 October 1986 respondents, through the Office of the Solicitor General, filed a Return To The Writ
of Habeas Corpus alleging therein that private respondent and Josefina Cruz alias "Mrs. Mercado", and Jose Milo
Concepcion alias "Eugene Zamora" were apprehended by the military on September 29, 1986 in the evening at
the Philippine General Hospital Compound at Taft Ave., Mangga being leaders or members of the Communist
Party of the Philippines, New People's Army and National Democratic Front, organizations dedicated to the
overthrow of the Government through violent means, and having actually committed acts of rebellion under Article
134 of the Revised Penal Code, as amended. After their arrest they were forthwith charged with rebellion before
Branch XII of the Regional Trial Court, National Capital Region in Criminal Case No. 86-48926 and on 3 October
warrants for their arrest were issued and respondents continue to detain them because of the warrants of arrest
and the pendency of the criminal cases against them. Respondents further allege that, contrary to the allegation in
the petition, herein private respondent was not a member of the NDF panel involved in peace negotiations with
the Government; neither is he and his companions Cruz and Concepcion covered by any, safe conduct pass
issued by competent authorities.
3. At the hearing on 14 October 1986 the parties informed the Court of certain agreements reached between
them. We issued a resolution reading as follows:

When this case was called for hearing this morning, Attorneys Romeo Capulong, Arno V. Sanidad, Efren
H. Mercado, Edgardo Pamin-tuan, Casiano Sabile, Ramon Cura, and William Chua appeared for the
petitioners with Atty. Capulong arguing for the petitioners. Solicitor General Sedfrey Ordonez, Assistant
Solicitor General Romeo C. de la Cruz and Trial Attorney Josue E. Villanueva appeared for the
respondents, with Solicitor General Ordoñez arguing for the respondents.

Petitioners' counsel, Atty. Romeo Capulong, manifested in open Court that in conformity with the
agreement reached with the government, the petition for habeas corpus will be withdrawn with detainee
Rodolfo Salas to remain under custody, whereas his co-detainees Josefina Cruz and Jose Milo
Concepcion will be released immediately.

Solicitor General Sedfrey Ordoñez, also in open Court, confirmed the foregoing statement made by
petitioners' counsel regarding the withdrawal of the petition for  habeas corpus, declaring that no objection
will be interposed to the immediate release of detainees Josefina Cruz and Jose Milo Concepcion, and
that no bond will be required of them, but they will continue to face trial with their co-accused, Rodolfo
Salas; further, that they will not be rearrested on the basis of the warrants issued by the trial court
provided that they manifest in open Court their willingness to subject themselves to the jurisdiction of the
Court and to appear in court when their presence is required.

In addition, he stated that he is willing to confer with petitioners' counsel today relative to the compromise
agreement that they have previously undertaken to submit.

Upon manifestation of petitioners' counsel, Atty. Romeo Capulong, that on his oath as member of the Bar,
the detainees Josefina Cruz and Jose Milo Concepcion have agreed to subject themselves to the
jurisdiction of the trial court, the Court ordered their immediate release.

Thereafter, the Court approved the foregoing manifestations and statements and required both parties to
SUBMIT to the Court their compromise agreement by 4:00 o'clock this afternoon. Teehankee, C.J., is on
official leave.

4. At 3:49 o'clock in the afternoon of 14 October 1986 the parties submitted a Joint Manifestation and Motion duly
signed by Atty. Romeo Capulong, counsel for petitioners, and Solicitor General Sedfrey Ordoñez, Assistant
Solicitor General Romeo C. de la Cruz and Trial Attorney Josue S. Villanueva, counsel for respondents, which
reads as follows:

COME NOW petitioners and the respondents, assisted by their respective counsel, and to this Honorable
Tribunal respectfully manifest:

1. That in the discussion between Romeo Capulong, petitioners' counsel, and Solicitor General Sedfrey
A. Ordoñez on October 13, 1986 exploratory talks were conducted to find out how the majesty of the law
may be preserved and human considerations may be called into play.

2. That in the conference both counsel agreed to the following terms of agreement:

a. The petition for habeas corpus will be withdrawn by petitioners and Josefina Cruz and Jose
Milo Concepcion will be immediately released but shall appear at the trial of the criminal case for
rebellion (People v. Rodolfo Salas, et al., Criminal Case No. 4886 [should be 86-48926], Regional
Trial Court, National Capital Judicial Region) filed against them under their personal
recognizance.

b. Petitioner Rodolfo Salas will remain in legal custody and face trial before the court having
custody over his person.

c. The warrant of arrest for the persons of Josefina Cruz and Jose Milo Concepcion is hereby
deemed recalled in view of formal manifestation before the Supreme Court that they will submit
themselves to the court having jurisdiction over their person.
 3. That on October 14, the Solicitor General was able to obtain the conformity of the Government to the
foregoing terms which were likewise accepted by petitioner (sic) and their counsel of record.

4. That the two counsel submitted their oral manifestation during the hearing on October 14 and the
present manifestation in compliance with the resolution announced in court this morning.

WHEREFORE, it is prayed that the petition for habeas corpus be dismissed.

5. On 16 October 1986 We issued the following resolution:

G.R. No. 76009 [In the Matter of the Petition for Habeas Corpus of Rodolfo Salas, Josefina Cruz and Jose
Milo Concepcion, et al. v. Hon. Juan Ponce Enrile, Gen. Fidel V. Ramos, Brig. Gen. Renato de Villa, Brig.
Gen. Ramon Montaño and Col. Virgilio Saldajeno] considering the Joint Manifestation and Motion dated
October 14, 1986 filed by Attorneys Romeo Capulong, Arno V. Sanidad, Efren H. Mercado and Ricardo
Fernandez, Jr. as counsel for petitioners and Solicitor General Sedfrey A. Ordonez and Assistant Solicitor
General Romeo C. de la Cruz and Trial Attorney Josue S. Villanueva as counsel for respondents which
states that they have entered into an agreement whereby: [a] the petition for habeas corpus will be
withdrawn by petitioners, and Josefina Cruz and Jose Milo Concepcion will be immediately released but
shall appear at the trial of the criminal case for rebellion [People vs. Rodolfo Salas, et al., Criminal Case
No. 4886, Regional Trial Court, National Capital Judicial Region, Branch XII, Manila], filed against them,
on their personal recognizance; [b] petitioner Rodolfo Salas will remain in legal custody and face trial
before the court having custody over his person; and [c] the warrant of arrest for the person of Josefina
Cruz and Jose Milo Concepcion is hereby deemed recalled in view of the formal manifestation before this
Court that they will submit themselves to the court having jurisdiction over their person and in view of the
said agreement, the petition for habeas corpus be dismissed, the Court Resolved to DISMISS the petition
for habeas corpus but subject to the condition that petitioners' lead counsel, Atty. Capulong, upon his oath
as member of the Bar, shall abide by his commitment to ensure the appearance of Josefina Cruz and
Jose Milo Concepcion at the trial of the criminal case for rebellion filed against them. Teehankee, C.J., is
on official leave.

It is the stand of the petitioner that private respondent, "in agreeing to remain in legal custody even during the pendency of
the trial of his criminal case, [he] has expressly waived his right to bail."37 Upon the other hand, private respondent asserts
that this claim is totally devoid of factual and legal basis, for in their petition for habeas corpus they precisely questioned
the legality of the arrest and the continued detention of Rodolfo Salas, Josefina Cruz and Jose Milo Concepcion, which
was not resolved by this Court or by the compromise agreement of the parties but left open for further determination in
another proceeding. Moreover, the matter of the right to bail was neither raised by either party nor resolved by this Court,
and the legal steps promptly taken by private respondent after the agreement was reached, like the filing of the motion to
quash on 7 November 1986 and the petition for bail on 14 May 1987, were clear and positive assertions of his statutory
and constitutional rights to be granted not only provisional but final and permanent liberty. Finally, private respondent
maintains that the term "legal custody" as used in the Joint Manifestation and Motion simply means that private
respondent agreed to continue to be in the custody of the law or in custodia legis and nothing else; it is not to be
interpreted as waiver.

Interestingly, private respondent admits that:

"Custody" has been held to mean nothing less than actual imprisonment. It is also defined as the detainer of a
person by virtue of a lawful authority, or the "care and possession of a thing or person." (Bouviers Law Dictionary,
Third Ed, Vol. I, pp. 741-742 citing Smith v. Com. 59 Pa. 320 and Rolland v. Com. 82 Pa. 306)

He further admits that, in the light of Section 1 of Rule 114 of the Rules of Court and settled jurisprudence, the
"constitutional right to bail is subject to the limitation that the person applying for admission to bail should be in the custody
of the law or otherwise deprived of his liberty."38

When the parties in G.R. No. 76009 stipulated that:

b. Petitioner Rodolfo Salas will remain in legal custody and face trial before the court having custody over his
person.

they simply meant that Rodolfo Salas, herein respondent, will remain in actual physical custody of the court, or in actual
confinement or detention, as distinguished from the stipulation concerning his co-petitioners, who were to be released in
view of the recall of the warrants of arrest against them; they agreed, however, "to submit themselves to the court having
jurisdiction over their persons." Note should be made of the deliberate care of the parties in making a fine distinction
between legal custody and court having custody over the person in respect to Rodolfo Salas and court having jurisdiction
over the persons of his co-accused. Such a fine distinction was precisely intended to emphasize the agreement
that Rodolfo Salas will not be released, but should remain in custody. Had the parties intended otherwise, or had this
been unclear to private respondent and his counsel, they should have insisted on the use of a clearer language. It must
be remembered that at the time the parties orally manifested before this Court on 14 October 1986 the terms and
conditions of their agreement and prepared and signed the Joint Manifestation and Motion, a warrant of arrest had already
been issued by the trial court against private respondent and his co-accused. The stipulation that only the warrants of
arrest for Josefina Cruz and Jose Milo Concepcion shall be recalled and that only they shall be released, further
confirmed the agreement that herein petitioner shall remain in custody of the law, or detention or confinement.

In defining bail as:

. . . the security given for the release of a person in custody of the law, . . .

Section 1 of Rule 114 of the Revised Rules of Court admits no other meaning or interpretation for the term "in custody of
the law" than that as above indicated. The purpose of bail is to relieve an accused from imprisonment until his conviction
and yet secure his appearance at the trial.39 It presupposes that the person applying for it should be in the custody of the
law or otherwise deprived of liberty.40

Consequently, having agreed in G.R. No. 76009 to remain in legal custody, private respondent had unequivocably waived
his right to bail.

But, is such waiver valid?

Article 6 of the Civil Code expressly provides:

Art. 6. Rights may be waived, unless the waiver is contrary to law, public order, public policy, morals, or good
customs, or prejudicial to a third person with a right recognized by law.

Waiver is defined as "a voluntary and intentional relinquishment or abandonment of a known existing legal right,
advantage, benefit, claim or privilege, which except for such waiver the party would have enjoyed; the voluntary
abandonment or surrender, by a capable person, of a right known by him to exist, with the intent that such right shall be
surrendered and such person forever deprived of its benefit; or such conduct as warrants an inference of the
relinquishment of such right; or the intentional doing of an act inconsistent with claiming it."41

As to what rights and privileges may be waived, the authority is settled:

. . . the doctrine of waiver extends to rights and privileges of any character, and, since the word "waiver" covers
every conceivable right, it is the general rule that a person may waive any matter which affects his property, and
any alienable right or privilege of which he is the owner or which belongs to him or to which he is legally entitled,
whether secured by contract, conferred with statute, or guaranteed by constitution, provided such rights and
privileges rest in the individual, are intended for his sole benefit, do not infringe on the rights of others, and further
provided the waiver of the right or privilege is not forbidden by law, and does not contravene public policy; and the
principle is recognized that everyone has a right to waive, and agree to waive, the advantage of a law or rule
made solely for the benefit and protection of the individual in his private capacity, if it can be dispensed with and
relinquished without infringing on any public right, and without detriment to the community at large. . . .

Although the general rule is that any right or privilege conferred by statute or guaranteed by constitution may be
waived, a waiver in derogation of a statutory right is not favored, and a waiver will be inoperative and void if it
infringes on the rights of others, or would be against public policy or morals and the public interest may be waived.

While it has been stated generally that all personal rights conferred by statute and guaranteed by constitution may
be waived, it has also been said that constitutional provisions intended to protect property may be waived, and
even some of the constitutional rights created to secure personal liberty are subjects of waiver.42

In Commonwealth vs. Petrillo,43 it was held:

 Rights guaranteed to one accused of a crime fall naturally into two classes: (a) those in which the state, as well as
the accused, is interested; and (b) those which are personal to the accused, which are in the nature of personal
privileges. Those of the first class cannot be waived; those of the second may be.

It is "competent for a person to waive a right guaranteed by the Constitution, and to consent to action which would be
invalid if taken against his will."44

This Court has recognized waivers of constitutional rights such as, for example, the right against unreasonable searches
and seizures;45 the right to counsel and to remain silent;46 and the right to be heard.47

Even the 1987 Constitution expressly recognizes a waiver of rights guaranteed by its Bill of Rights.1âwphi1 Section 12(l)
of Article III thereof on the right to remain silent and to have a competent and independent counsel, preferably of his own
choice states:

. . . These rights cannot be waived except in writing and in the presence of counsel.

This provision merely particularizes the form and manner of the waiver; it, nevertheless, clearly suggests that the other
rights may be waived in some other form or manner provided such waiver will not offend Article 6 of the Civil Code.

We hereby rule that the right to bail is another of the constitutional rights which can be waived. It is a right which is
personal to the accused and whose waiver would not be contrary to law, public order, public policy, morals, or good
customs, or prejudicial to a third person with a right recognized by law.

The respondent Judge then clearly acted with grave abuse of discretion in granting bail to the private respondent.

WHEREFORE, the Orders of respondent Judge of July 7, 1987 and July 30, 1987 in Criminal Case No. 86-48926 entitled
People of the Philippines vs. Rodolfo C. Salas alias Commander Bilog/Henry, Josefina Cruz alias Mrs. Mercado, and Jose
Milo Concepcion alias Eugene Zamora, for Rebellion, are hereby NULLIFIED and SET ASIDE.

SO ORDERED.

G.R. No. 139489             April 10, 2000

DANILO FERRER, petitioner,
vs.
COMMISSION ON ELECTIONS and RAFAEL M. GROSPE, respondents.

RESOLUTION

PARDO, J.:

The case before us is a petition for certiorari under Rule 64, 1997 Rules of Civil Procedure, as amended, to nullify the
resolution of the Commission on Elections (Comelec), Second Division, promulgated on March 18, 1999 and resolution en
banc, promulgated on July 27, 1999 reversing the decision of the Municipal Trial Court, Talavera, Nueva Ecija and
declaring respondent Rafael M. Grospe as the duly elected Punong Barangay of Barangay Bantug Hacienda, Talavera,
Nueva Ecija.

The facts are as follows:

Petitioner Dante B. Ferrer and private respondent Rafael M. Grospe were candidates for the position of Punong Barangay
in Barangay Bantug Hacienda, Talavera, Nueva Ecija during the May 12, 1997 barangay elections.

The final result of the canvassing was as follows:

DANILO B. FERRER — 277 votes

RAFAEL M. GROSPE — 275 votes

Consequently, the Barangay Board of Canvassers proclaimed petitioner Danilo B. Ferrer as the duly elected Punong
Barangay by a margin of two (2) votes.

On May 19, 1997, the private respondent filed with the Municipal Trial Court, Talavera, Nueva Ecija an election protest.1

The protestant prayed for the re-opening of the ballot boxes of Precinct Nos. 21 and 21-A [Barangay Bantug Hacienda
had two (2) precincts only] and that the ballots contained therein be recounted.

The trial court created a revision committee for the purpose of segregating the ballots contested or claimed by the parties.
The results were as follows:

Uncontested Ballots

RAFAEL GROSPE DANILO FERRER

Precinct No. 21 — 168 120
Precinct No. 21-A — 83 48

268 251

Among the eleven (11) ballots claimed by private respondent, eight (8) were credited to him by the trial court.2 The court
rejected three (3) rejected ballots.3

On the other hand, the trial court credited twenty-nine (29) ballots claimed by petitioner.

The final results affirmed the proclamation of petitioner as Punong Barangay with a total votes of 280 against private
respondent's 276 votes after adding the corresponding credited ballots in their favor.

In due time, private respondent appealed the decision of the trial court to the Commission on Elections.

The Commission on Elections4 in finding for the private respondent, arrived at the following conclusions:

1. Exhibits "E", "I" and "K" which were rejected by the trial court, would be credited in favor of private respondent;

1.1 Exhibits "E" and "I" — "APE GROSPE" was clearly written on the first line for Kagawad leaving the
space for Punong Barangay vacant. The Commission applied the neighborhood rule.

1.2 Exhibit "K" — "RAFAEL GROSPE" was written on the second line for Kagawad leaving the space for
Punong Barangay vacant. The Comelec applied the intent rule.

2. Exhibit "2" was not counted in favor of protestee for being written by two (2) distinct persons;

3. Exhibit "A-16" was rejected as marked ballot because the words "KAMOT CAPITAN" written on the fourth line
for councilor are impertinent, irrelevant and unnecessary words or expressions which served no other purpose
than to mark the ballot;

4. Exhibit "13", valid for Danilo B. Ferrer — applying the idem sonam rule and the neighborhood rule. The word
"DANIG" sounds similar to petitioner's nickname "DANNY" and the same was written on the first line for Kagawad
leaving the space for Punong Barangay vacant;

5. Exhibits "A-4" to "A-15" were found to be valid albeit the absence of the signature of the BEI Chairman since it
did not invalidate the ballots.

From the foregoing findings and conclusion of the Commission on Elections, private respondent ended with a one (1)
point lead over the petitioner with the following votes:

DANILO B. FERRER — 278 votes

 RAFAEL M. GROSPE — 279 votes

On March 23, 1999, petitioner filed with the Commission on Elections a motion for reconsideration, which the Commission
dismissed for lack of merit in its resolution5 promulgated on July 27, 1999;

Hence, this petition.6

Petitioner asserts the following grounds:

1. The findings of the trial court in its appreciation of the contested ballots is in accord with law and jurisprudence
as well as familiarity with the traits and idiosyncrasies of the voters of Barangay Bantug Hacienda, Talavera,
Nueva Ecija;

2. The decision of the trial court reflects its exhaustive and painstaking examination and appreciation of the
contested ballots.7

After a thorough evaluation and examination of the contested ballots, which we visually scrutinized, we make the following
findings:

A. For Danilo B. Ferrer

1. Exhibit "A-1" is counted in favor of petitioner since "FERRER" is the surname of petitioner and no other
candidate has the same surname.8

2. Exhibit "A-2", the vote is valid for "Danilo Ferrer" which was written on the first line for Kagawad leaving the
line/space for Punong Barangay vacant under the neighborhood rule.

3. Exhibit A-3, the vote "Prongcoran Danilo Ferrer" is valid for Danilo Ferrer regardless of the designation.
There is no showing that the designation/appellation was used to identify the voter as to render the ballot
marked.9

4. Exhibits "A-4" and "A-16" are valid votes for Danilo Ferrer. Unquestionably, in Exhibit "A-4" the vote
"Danilo Ferrer" is valid. The words "Kamot Capitan" written in the fourth line of Kagawad does not invalidate
the ballot nor invalidate the vote for Danilo Ferrer. Since the words "Kamot Capitan" do not sufficiently
identify the candidate for whom it was intended, the same shall be considered as a stray vote for Kagawad
but will not invalidate the whole ballot.

5. Exhibits "A-5" to "A-9", "A-10", "A-14", "A-15" and "1" or a total of nine (9) votes are valid votes in favor of
Danilo Ferrer since the votes indicate either the full name of Ferrer or his nickname Danny with his surname
Ferrer. 10

6. Exhibits "11", "A-13", "5" and "8" are valid votes for Danilo Ferrer since the use of nicknames accompanied
by the surname is valid and does not annul the vote. 11

7. Exhibit "A-12", the vote "Danny F" is valid since under the law if the nickname is unaccompanied by the
name or surname of the candidate and it is the one by which he was generally or popularly known in the
locality, the name shall be counted in favor of said candidate, if there is no other candidate for the same
office with the same nickname. Moreover, the intent of the voter is to vote for Danilo Ferrer since the initial of
his surname is indicated.

8. Exhibit "2", the ballot unmistakably indicates "Danny F" above illegible writings. We rule that these are not
written by two (2) persons. Some unlettered voters in their effort and desire to make their will known end up
making scribbles on their ballots absent any malice on their part. They are able to produce/write letters.
Credit must be given to them. We hold that the voter intended to vote for Danilo Ferrer.

9. Exhibit "3", the ballot is valid for Danilo B. Ferrer. Since there is no other candidate with the same first
name, the vote "Danilo" is properly credited to Ferrer. 12
 10. Exhibits "5", "9" and "10", the vote "Danny" is valid in favor of petitioner for the same reason stated
above. Under the idem sonam rule, "Danny" is likewise validated. 13

11. Exhibits "11" and "12", the votes "Danilo Ferrer" are valid in favor of petitioner under the neighborhood
rule though the name of the candidate (Ferrer) is written on the first space provided for Kagawad but the
space for Punong Barangay was left vacant.

12. Exhibit "13" is considered valid under the neighborhood and idem sonam rule. The word "Danig" could
only refer to Ferrer since it sounds like his nickname. The fact that it is written on the first space for Kagawad
leaving the space for Punong Barangay unfilled does not invalidate the vote.

13. Exhibits "6", "7" and "4" are valid votes for Danilo Ferrer. Under the neighborhood rule, even if the vote
"Danilo Ferrer" or "Daniel Ferrer" is written on the space provided for the name of the barangay, but the
space for Punong Barangay is vacant, the same would not invalidate the ballot. 14

B. For Rafael M. Grospe

1. Exhibits "A", "C" and "J" with votes "Ape" are valid votes for Rafael Grospe since it is his nickname. 15

2. Exhibit "B" is a valid vote for Rafael Grospe since the vote "RAFAE APE GAOSPE" is unmistakably a vote
for the candidate Rafael Grospe whose nickname is Ape. 16

3. Exhibits "E" and "I" "Ape Grospe" are valid votes for Rafael Grospe following the neighborhood rule, since
they are written on the first space provided for the Kagawad and the space for Punong Barangay is left
vacant.

4. Exhibits "G" and "H" are valid votes for Rafael Grospe since there is no other candidate for that position
with the same first name "Rafael". 17

5. Exhibit "K" with the vote "Rapael Grospe" written on the second line provided for Kagawad is not
valid.1âwphi1 The neighborhood cannot apply since it appears that the voter's intention is to vote for Grospe
as Kagawad and not as Punong Barangay.

6. Exhibits "D" and "F" are not valid votes for Grospe since "APF" is not his nickname plus the fact that in
Exhibit "D", the vote is written between the space provided for Punong Barangay and the name of the
Barangay.

To recapitulate, petitioner Danilo B. Ferrer garnered a total of twenty-nine (29) valid votes and no stray vote while
respondent Rafael M. Grospe obtained eight (8) valid votes and three (3) stray votes.

Since the main issue at hand is the contested ballots claimed by the parties, the computation shall be based on the
number of uncontested ballots after revision at the lower court. Thus, petitioner who garnered 251 uncontested ballots
would be credited with 29 valid votes per findings above. He therefore has a total of 280 votes.

On the other hand, private respondent with 268 uncontested ballots shall be credited with 8 valid votes out of the 11 votes
claimed, or a total of 276 votes. Exhibits "D", "F" and "K" or 3 votes are declared void as stray votes per discussion above.

WHEREFORE, the Court GRANTS the petition, finding petitioner DANILO B. FERRER to be the duly elected Punong
Barangay of Barangay Bantug Hacienda, Talavera, Nueva Ecija with a total of 280 votes against respondent Rafael M.
Grospe with a total of 276 votes, or a winning margin of four (4) votes.

The Court SETS ASIDE the resolution of the Commission on Elections En Banc in EAC No. 99-97 promulgated on July
27, 1999, and also SETS ASIDE the Court's resolution of November 22, 1999.1âwphi1.nêt

No costs.

SO ORDERED.
G.R. No. L-61617 July 2, 1985

DR. TOLOMEO ZURBANO and BELEN B. ZURBANO, petitioners,

vs.
HONORABLE CONRADO ESTRELLA, MINISTER OF AGRARIAN REFORM, HONORABLE SALVADOR PEJO,
REGIONAL DIRECTOR OF MINISTRY OF AGRARIAN REFORM, and IGNACIO BALBAERA, respondents.

Jose Lozada Lapak for respondents.

The Solicitor General for respondents.

FERNANDO, C.J.:

By far, one of the most far-reaching governmental reforms, acclaimed both here and abroad, is Presidential Decree No.
27 issued on October 21, 1972, decreeing the emancipation of the tenants from the bondage of the soil and transferring
the ownership of the land they till. Its validity was assumed in Chavez v. Zobel, 1 and upheld in Gonzales v. Estrella. 2 It
could not have been otherwise. The Constitution explicitly provides: The State shall formulate and implement an agrarian
reform program aimed at emancipating the tenant from the bondage of the soil and achieving the goals enunciated in this
Constitution. 3 The Constitution is worded in the future tense; the State is to formulate and implement a vitally needed
program. t was signed on November 30, 1972. It is worth recalling that a month and nine days earlier, to be exact, on
October 21, 1972, the epochal Presidential Decree No. 27 was issued by President Marcos.

Thereafter. under a Letter of Instruction dated October 21, 1976, 4 the President directed the then Secretary, now Minister
of Agrarian Reform, to "undertake to place under the Land transfer Program of the government pursuant to Presidential
Decree No. 27, all tenanted rice/corn lands with areas of seven hectares or less belonging to landowners who own other
agricultural lands of more than seven hectares ill 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. 5

It is the validity of such Letter of Instruction that is assailed in this prohibition proceeding on the ground that it is class
legislation and, therefore, violative of the equal protection guarantee; that it is "a form of tyrannical imposition by a strong
and powerful state" and, as such, violative of the due process clause; and that it would as applied to petitioners, be a
taking of private property without just compensation. 6

Petitioners-spouses in this prohibition proceeding alleged that they are the owners of agricultural lands, with six (6)
parcels planted to coconuts, 56 hectares in area and two (2) parcels of riceland, 1.86 hectares in size. 7 It is further
alleged that said "coconut lands which are scattered in different barrios are very far from the poblacion of Labo where
petitioners reside which they could not even visit due to the unsettled peace and order conditions," resulting in their only
productive property being the ricelands. 8 On August 10, 1982, "petitioners received a communication from respondent
Salvador Pejo of Region V of the Ministry of Agrarian Reform informing them that the processing of the land transfer had
been initiated and requiring them to submit to the Regional Office all the necessary documents pertinent to their claim"
otherwise, the farmer-beneficiaries would be issued the corresponding emancipation patents. 9 When they asked why a
small piece of property of only 1.86 hectares of riceland should be under Presidential Decree No. 27, they were informed
that the text of the letter of Instruction No. 474 calls for the two parcels of ricelands being included in the Land Transfer
Program. 10

The Solicitor General, in the Comment 11 he was required to file, stated that the total area of the landholding of the
petitioners is 56.14 hectares in coconut lands and two parcels of riceland of 1.86 hectares. It was further stated that on
August 2, 1982, respondent Director Pejo did take the initial steps for the issuance of the Emancipation Patent to the
farmer beneficiaries based on the existing record of his office and earnestly required the utmost cooperation from
petitioners, but despite the initiation of the proceeding for the land transfer claim, there was failure to extend such
cooperation. He denied that the Letter of Instruction assailed is unconstitutional, setting forth its background as an
implementing measure of Presidential Decree No. 27, the validity of which is not in doubt. 12 He prayed for the dismissal of
the petition. His Comment is considered as the Answer.

The plea for dismissal must be granted. There is no legal basis for declaring Letter of Instruction No. 474 void on its face
on equal protection, due process and taking of private property without just compensation grounds. The Constitution
decrees no less than the emancipation of tenants, and there are safeguards therein to assure that there be no
arbitrariness or injustice in its enforcement. There are, moreover, built-in safeguards to preclude any unlawful taking of
private property.

1. There is no merit to the contention that Letter of Instruction No. 474 denies equal protection. To condemn as class
legislation an executive act intended to promote the welfare of tenants is to ignore not only the letter of the Constitution—
incidentally cited in the petition itself—requiring the "formulation and implementation of an agrarian reform program aimed
at emancipating the tenant from the bondage of the soil 13 but also the nation's history. Among the highlights in the
proceedings in the First Constitutional Convention was the reference by then Delegate Miguel Cuaderno to the sad plight
of the national hero, Jose Rizal, reflective of the evil spawned by the tenancy system. 14

In Ramas v. Court of Agrarian Relations, 15 sustaining the validity of the Agricultural Tenancy Act, 16 there is this relevant
excerpt: The history of land tenancy, especially in Central Luzon, is a dark spot in the social life and history of the people.
It was among the tenants of Central Luzon that the late Pedro Abad Santos acting as a saviour of the tenant class which
for generations has been relegated to a life of bondage, without hope of salvation or improvement, enunciated a form of
socialism as a remedy for the pitiful condition of the tenants of Central Luzon. It was in Central Luzon also that the tenants
forming the PKM organization of tenants and, during the war, the Hukbalahap, rose in arms against the constituted
authority as their only salvation from permanent thraldom. According to statistics, whereas at the beginning of the century
we had only 19% of the people belonging to the tenant class, after 60 years the prevailing percentage has reached 30%.
It is the desire to improve the condition of the peasant class that must have impelled the Legislature to adopt the
provisions as a whole of the Agricultural Tenancy Act, and particularly Section 14 of Said Act. 17 Then came the
Agricultural Land Reform Code, 18 an enactment that extended even greater benefits to tenants. It was declared valid in
Association of Rice and Corn Producers of the Philippines v. Land reform Council. 19 Thus was manifested anew, the
concern shown for their rights, even if thereby the interest of the property owners would be adversely affected. No heed
was paid to the claim that there was a denial of equal protection. finally, Presidential Decree No. 27, which anticipated
what was to be constitutional mandate that tenants in rice and corn lands be freed from bondage of soil was issued.
Again, this Court in the cited case of Gonzales v. Estrella, 20 had no difficulty dismissing a petition that it be declared
unconstitutional. Nor did counsel even insinuate a possible violation of the equal protection guarantee. In the face of such
consistent course of action dictated by the commitment of the fundamental law to the Ideal of putting an end tot he evils of
tenancy, any argument that thereby landholders would be adversely affected is an exercise in futility—except on showing
that in implementing such mandate, there is arbitrariness or unfairness. To that aspect of the case, we now turn.

2. There is no merit to the contention that the Letter of Instruction No. 474 amounts to deprivation of property without due
process of law. All that it provides is that the Secretary then, now the Minister, of Agrarian Reform, is to take charge of
Land Transfer Program pursuant to the Presidential Decree No. 27. Landholders with tenanted rice/corn lands with areas
of seven hectares or less are included if they 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. 21 It is manifest that there is no departure from constitutional restraints. The attack
on due process ground is unavailing as on the face of the challenged measure fairness and justice may easily discerned.
Nothing in its language lend support to the contention that consequences so harsh and drastic would attend its
implementation. In language, scheme, and framework, this Letter of Instruction reveals the plan and purpose to attain the
goal envisioned by the Constitution but with due regard to the landowners affected. There is a saving clause. They are
exempt from its operation if it be shown that from the other lands owned by them of more than seven hectares in
aggregate areas  if agricultural, or other areas, whether residential, commercial, or industrial, or lands devoted to other
urban purposes, they are unable to derive adequate income to support themselves and their families. Where then is the
arbitrariness? Where is the injustice?

3. Neither is there any merit tot he contention that there would be the taking of property for public use without just
compensation. The Constitution itself imposes the duty on the State to emancipate the tenants from the bondage of the
soil. What is more, even a month before its adoption by the 1971-1972 Constitutional Convention, Presidential Decree No.
27 was issued. Its validity, to repeat, was unanimously sustained by this Tribunal. No other conclusion could have been
reached, conforming as it did to what the fundamental law ordained. The only remaining question then is the
compensation to be awarded the landowner. That is provided for in the Decree. Thus: "For the purpose of determining the
cost of the land to be transferred to the tenant-farmer pursuant to this Decree, the value of the land shall be equivalent to
two and one-half (2½) times the average harvest of three normal crop years immediately preceding the promulgation of
this Decree; The total cost of the land, including interest at the rate of six (6) per centum per annum, shall be paid by the
tenant in fifteen (15) years of (15) equal annual amortization. 22 Nor is this all. This petition may be premature. There are,
as pointed out, built-in safeguards to assure that landowners are not to be deprived of such lots "from which they derive
adequate income for the support of themselves and their families." If petitioners could show that the application of the
Letter of Instruction to them would be visited by the failure to meet that standard, they are exempt. They would have then
no valid cause for complaint.
WHEREFORE, the petition is dismissed for lack of merit. No costs.

G.R. No. 203204               November 20, 2013

HEIRS OF ROMULO D. SANDUETA, namely: GLORIA SANDUETA ELOPRE HEIRS OF JOSEPHINE S. NADALA,
represented by ROY S. NADALA, HOFBOWER SANDUETA NERISA SANDUETA MICUBO, OSCAR SANDUETA,
MARILYN SANDUETA VELASCO, RONALD SANDUETA, and NAPOLEON SANDUETA, Petitioners,
vs.
DOMINGO ROBLES, HEIRS OF TEODORO ABAN, namely: NERIO ABAN, VIRGINIO ABAN, SUSANA ABAN, and
DAVID ABAN; HEIRS OF EUFRECENA* GALEZA, namely: CESAR GALEZA, NESTOR GALEZA, ANGELA 9ALEZA
JUSTO GALEZA, KIA GALEZA PONCE, PORFERIA GALEZA NALZARO, ROSARIO GALEZA VELASCO, HERMINIA
GALEZA GUERRERO, and NONA GALEZA NACARIO, Respondents.

RESOLUTION

PERLAS-BERNABE, J.:

Assailed in this petition for review on Certiorari1 is the Decision2 dated April 26, 2012 of the Court of Appeals, Cagayan de
Oro City (CA) in CA-G.R. SP No. 03333 which affirmed DARCO Order No. RT-0911-4143 dated November 24, 2009
(November 24, 2009 DARCO Order) issued by former Department of Agrarian Reform (DAR) Secretary Nasser C.
Pangandaman (Secretary Pangandaman).

The Facts

Petitioners are the heirs of Romulo and Isabel Sandueta (Sps. Sandueta) who died intestate in 1987 and 1996,
respectively, and accordingly inherited several agricultural lands situated in Dipolog City, Zamboanga del Norte, with a
total land area of 18.7433 hectares (has.).4 One of these parcels of land is Lot No. 3419, with an area of 13.7554
has.5 covered by Transfer Certificate of Title (TCT) No. T-5988.6 The 4.6523-hectare riceland portion (subject portion) of
the foregoing lot was tenanted by Eufrecena Galeza, Teodoro Aban, and Domingo Pableo7 (tenants) who were instituted
as such by the original owner, Diosdado Jasmin, prior to its sale to Sps. Sandueta.8

The subject portion was placed under the government’s Operation Land Transfer (OLT) Program pursuant to Presidential
Decree No. (PD) 279 and consequently awarded to the above-named tenants who were issued the corresponding
Emancipation Patents (EPs).10

The Proceedings Before the DAR

On July 7, 2005, petitioners filed before the DAR District Office in Dipolog City a petition11 seeking to exercise their right of
retention over the subject portion pursuant to Section 6 of Republic Act No. (RA) 6657,12 known as the Comprehensive
Agrarian Reform Law of 1988, and as enumerated in the case of Ass’n. of Small Landowners in the Phils., Inc. v. Hon.
Secretary of Agrarian Reform13 (Ass’n. of Small Landowners). They also sought to annul the EPs of the tenants as well as
compel the tenants to pay back rentals.14

The Provincial Protest Application and Resolution Unit referred the case to the Municipal Agrarian Reform Officer of
Dipolog City who, after investigation, recommended the denial of the petition.15 On the other hand, the Provincial Agrarian
Reform Officer (PARO), while similarly recommending the denial of the petition for retention, nevertheless recommended
the grant of a 5-hectare retention area for petitioners to be taken from the portion of Lot No. 3419 not covered by the OLT
Program.16

On April 5, 2006, the DAR Regional Office No. IX, through Regional Director Julita R. Ragandang (Director Ragandang)
issued an Order17 (April 5, 2006 Order) adopting the PARO’s recommendation. Director Ragandang explained that a
landowner who failed to exercise his right of retention under PD 27 can avail of the right to retain an area not exceeding 5
has. pursuant to Section 6 of RA 6657,18 adding that this award is different from that which may be granted to the children
of the landowner, to the extent of 3 has. each, in their own right as beneficiaries.19 However, to be entitled thereto, each
child must meet the age qualification and requirement of actual cultivation of the land or direct management of the farm
under Section 6, as well as the other conditions under Section 2220 of RA 6657. As petitioners were absentee landowners
who had left the cultivation of the subject portion entirely to the tenants, Director Ragandang therefore concluded that they
are not entitled to exercise retention rights thereon21 and, hence, denied their petition for retention. Despite such denial,
Director Ragandang granted the decedent Romulo Sandueta the right to retain 5 has. from the portion of Lot No. 3419 not
covered by the OLT Program.

Dissatisfied, petitioners filed a motion for reconsideration, essentially arguing that their right to choose the retention area
is guaranteed by Section 6 of RA 6657. In an Order22 dated July 14, 2006, Director Ragandang denied the motion and
explained that landowners covered by PD 27 who failed to exercise their right of retention which subsequently led to the
distribution of the EPs to the tenants, have no right to choose the area to be retained.23 Moreover, she pointed out that
under Letter of Instruction No. 474 (LOI 474), landowners who own less than 24 has. of tenanted rice lands but
additionally own more than 7 has. of other agricultural lands may not retain their tenanted rice lands.24 Since petitioners
failed to exercise their right or manifest their intention of retention prior to the issuance of their tenants’ EPs and
considering further that they own about 14.0910 has. of other agricultural lands, Director Ragandang declared them to
have no right to choose their retained area of 5 has., which can be accommodated in their other landholdings not covered
under the OLT Program.25

On appeal, Secretary Pangandaman issued the November 24, 2009 DARCO Order affirming in toto Director Ragandang’s
April 5, 2006 Order.

The CA Ruling

In a Decision26 dated April 26, 2012, the CA (a) held that the subject portion was appropriately covered by the OLT
Program pursuant to LOI 474; (b) declared that petitioners do not have the absolute right to choose their retention area
considering their ownership of 14.0910 has. of other agricultural lands; and (c) affirmed Secretary Pangandaman’s
dismissal of the petition for retention under Section 6 of RA 6657.27

On May 31, 2012, petitioners filed a motion for reconsideration28 which was denied by the CA in a Resolution29 dated
August 14, 2012.1âwphi1 Hence, the instant petition.

The Issue Before the Court

The essential issue in this case is whether or not petitioners are entitled to avail of any retention right under Section 6 of
RA 6657.

The Court’s Ruling

The right of retention, as protected and enshrined in the Constitution, balances the effects of compulsory land acquisition
by granting the landowner the right to choose the area to be retained subject to legislative standards.30 Necessarily, since
the said right is granted to limit the effects of compulsory land acquisition against the landowner, it is a prerequisite that
the land falls under the coverage of the OLT Program of the government. If the land is beyond the ambit of the OLT
Program, the landowner need not – as he should not – apply for retention since the appropriate remedy would be for him
to apply for exemption. As explained in the case of Daez v. CA31 (Daez):

Exemption and retention in agrarian reform are two (2) distinct concepts.

P.D. No. 27, which implemented the Operation Land Transfer (OLT) Program, covers tenanted rice or corn lands. The
requisites for coverage under the OLT program are the following: (1) the land must be devoted to rice or corn crops; and
(2) there must be a system of share-crop or lease-tenancy obtaining therein. If either requisite is absent, a landowner may
apply for exemption. If either of these requisites is absent, the land is not covered under OLT. Hence, a landowner need
not apply for retention where his ownership over the entire landholding is intact and undisturbed. (Emphasis and
underscoring supplied)

If the land is covered by the OLT Program which hence, renders the right of retention operable, PD 27 – issued on
October 21, 1972 – confers in favor of covered landowners who cultivate or intend to cultivate an area of their tenanted
rice or corn land the right to retain an area of not more than seven (7) has. thereof.32 Subsequently, or on June 10, 1998,
Congress passed RA 6657 which modified the retention limits under PD 27. In particular, Section 6 of RA 6657 states that
covered landowners are allowed to retain a portion of their tenanted agricultural land not, however, to exceed an area of
five (5) has. and, further thereto, provides that an additional three (3) has. may be awarded to each child of the landowner,
subject to the following qualifications: (1) that he is at least fifteen (15) years of age; and (2) that he is actually tilling the
land or directly managing the farm.33 In the case of Heirs of Aurelio Reyes v. Garilao34 (Reyes), however, the Court held
that a landowner’s retention rights under RA 6657 are restricted by the conditions set forth in LOI 474 issued on October
21, 1976 which reads:
WHEREAS, last year I ordered that small landowners of tenanted rice/corn lands with areas of less than twenty-four
hectares but above seven hectares shall retain not more than seven hectares of such lands except when they own other
agricultural lands containing more than seven hectares or land used for residential, commercial, industrial or other urban
purposes from which they derive adequate income to support themselves and their families;

WHEREAS, the Department of Agrarian Reform found that in the course of implementing my directive there are many
landowners of tenanted rice/corn lands with areas of seven hectares or less who also own other agricultural lands
containing more than seven hectares or lands used for residential, commercial, industrial or other urban purposes where
they derive adequate income to support themselves and their families;

WHEREAS, it is therefore necessary to cover said lands under the Land Transfer Program of the government to
emancipate the tenant-farmers therein.

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, do hereby order the following:

1. You shall undertake to place under the Land Transfer Program of the government pursuant to Presidential
Decree No. 27, all tenanted rice/corn lands with areas of seven hectares or less belonging to 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.

2. Landowners who may choose to be paid the cost of their lands by the Land Bank of the Philippines shall be
paid in accordance with the mode of payment provided in Letter of Instructions No. 273 dated May 7,
1973.35 (Emphases and underscoring supplied)

Based on the above-cited provisions, it may be readily observed that LOI 474 amended PD 27 by removing any right of
retention from persons who own:

(a) other agricultural lands of more than seven (7) has. in aggregate areas; or

(b) lands used used for residential, commercial, industrial or other urban purposes from which they derive
adequate income to support themselves and their families.

To clarify, in Santiago v. Ortiz-Luis,36 the Court, citing the cases of Ass’n. of Small Landowners37 and Reyes,38 stated that
while landowners who have not yet exercised their retention rights under PD 27 are entitled to new retention rights
provided for by RA 6657, the limitations under LOI 474 would equally apply to a landowner who filed an application under
RA 6657.

In this case, records reveal that aside from the 4.6523-hectare tenanted riceland covered by the OLT Program, i.e. the
subject portion, petitioners predecessors-in-interest, Sps. Sandueta, own other agricultural lands with a total area of
14.0910 has. which therefore triggers the application of the first disqualifying condition under LOI 474 as above-
highlighted. As such, petitioners, being mere successors-in-interest, cannot be said to have acquired any retention right to
the subject portion. Accordingly, the subject portion would fall under the complete coverage of the OL T Program hence,
the 5 and 3-hectare retention limits as well as the landowner s right to choose the area to be retained under Section 6 of
RA 6657 would not apply altogether.

Nevertheless, while the CA properly upheld the denial of the petition for retention, the Court must point out that the
November 24, 2009 DARCO Order inaccurately phrased Romulo Sandueta s entitlement to the remaining 14.0910-
hectare landholding, outside of the 4.6523-hectare subject portion, as a vestige of his retention right. Since the 14.0910-
hectare landholding was not shown to be tenanted and hence, outside the coverage of the OLT Program, there. would be
no right of retention, in its technical sense, to speak of. Keeping with the Court s elucidation in Daez retention is an
agrarian reform law concept which is only applicable when the land is covered by the OLT Program; this is not, however,
the case with respect to the 14.0910-hectare landholding. Thus, if only to correct any confusion in terminology, Romulo
Sandueta s right over the 14.0910-hectare landholding should not be deemed to be pursuant to any retention right but
rather to his ordinary right of ownership as it appears from the findings of the DAR that the landholding is not covered by
the OL T Program.

WHEREFORE, the petition is DENIED. Accordingly, the Decision dated April 26, 2012 of the Court of Appeals, Cagayan
de Oro City in CA-G.R. SP No. 03333 insofar as it upheld the denial of the petition for retention in this case is hereby
AFFIRMED.
SO ORDERED.

G.R. No. 197486               September 10, 2014

RENATO L. DELFINO, SR. (Deceased), Represented by his Heirs, namely: GRACIA DELFINO, GREGORIO A.
DELFINO; MA. ISABEL A. DELFINO, RENATO A. DELFINO, JR., MA. REGINA DELFINO ROSELLA, MA. GRACIA A.
DELFINO, MARIANO A. DELFINO, MA. LUISA DELFINO GREGORIO and REV. FR. GABRIELA.
DELFINO, Petitioners,
vs.
AVELINO K. ANASAO and ANGEL K. ANASAO (Deceased and represented by his sole heir, SIXTO C.
ANASAO), Respondents.

DECISION

VILLARAMA, JR., J.:

Assailed in this petition for review under Rule 45 are the Decision1 dated January 31, 2011 and Resolution2 dated June
17, 2011 of the Court of Appeals (CA) in CA-G.R. SP No. 111147. The CA reversed and set aside the Decision3 dated
February 6, 2008 and Resolution4 dated September 30,-2008 of the Office of the Pre.sident (OP) denying the petition to
annul or cancel the Orders5 dated February 28, 1995 and December 13, 1995 of the Secretary of Agrarian Reform and
clarifying the Order dated February 28, Factual Antecedents Prior to the effectivity of Presidential Decree No. 27 (PD 27)
Renato L. Delfino, Sr. (Delfino) owned the following parcels of agricultural land in the Province of Laguna:

Transfer Certificate Area

Classification Location
of Title (TCT) No. (in hectares)
T-21710 (T-49743) 2.8148 Riceland Pook Sta. Rosa
T-21711 (T-49744) .0872 Riceland Pook Sta. Rosa
T-21712 (T-49745) 4.1787 Riceland Tagapo, Sta. Rosa
T-26378 (T-69592) 2.8662 Riceland Tagapo, Sta. Rosa
T-26381 (T-69595) 20.8108 Coconut land Masaya, Bay
T-216233 4.7248 Riceland Sta. Cruz, Sta. Rosa
Total 35.4825 has.6

In October 1975, Delfino soldthe 20.8108-hectare coconut land covered by TCT No. T-26381 (T-69595), leaving him with
14.6717 hectares of riceland. The tenanted portion (9.8597 hectares) being tilled by respondents Avelino K. Anasao and
Angel K. Anasao, and another farmer, Rodriguez P. Dacumos was placed under Operation Land Transfer (OLT) pursuant
to Presidential Decree No. 27 (PD 27).7

After full payment to the Land Bank of the Philippines of the amortizations, the farmer-beneficiarieswere issued
Emancipation Patents8 (EPs), as shown below:

Name of Farmer- TCT Location Previous TCT Area

Beneficiary No./EP No. (in has.)
Avelino Anasao EP-791 Tagapo, Sta. Rosa, T-21712 3.0016
Laguna
Angel Anasao EP-790 Tagapo, Sta. Rosa T-21712 .7029
Angel Anasao EP-792 Tagapo, Sta. Rosa T-21712 .1815
Rodriguez Dacumos EP-782 Pook, Sta. Rosa Laguna T-21710 2.6811
      Total 6.56719

The remaining area of 3.2942 hectares covered by OLT was not issued with EPs.10
On February 8, 1992, prior to the registration of the EPs in the Registry of Deeds, Delfino filed an Application for Retention
over the entire 14.6717-hectare riceland. Upon the recommendation of the Department of Agrarian Reform (DAR),
Laguna Provincial Office, the DAR Regional Office IV Director issued an Order11 dated June 22, 1993 denying retention of
the 9.8597 hectares but granting retention over the 4.8120 hectares which was not covered by OLT.12

Delfino appealed to then DAR Secretary Ernesto D. Garilao who issued an Order13 dated February 28, 1995, as follows:

WHEREFORE, premises considered, this Order is hereby issued setting aside the Order of the DAR Regional Director of
Region IV dated June 22, 1993, thus petitioner is hereby given the maximum of five (5) hectares from the tenanted portion
as his retained area.

SO ORDERED.14

A motion for reconsideration by way of motion for intervention was filed by respondents who argued that the
implementation of the February 28, 1995 Order will have the effect of cancelling the EPs and consequently deprive them
of ownership of the landholdings they acquired pursuant to PD 27. In his Order dated December 13,1995, Secretary
Garilao denied the motion for utter lack of merit.15 Respondents appealed to the OP but later withdrew the appeal and
instead filed a petition for review in the CA (CAG.R. SP No. 39761). By Resolution dated March 15, 1996, the CA’s Third
Division dismissed the petition for being insufficient in form and substance. Respondents’ motion for reconsideration was
likewise denied under Resolution dated January 28, 1997. Entry of judgment was issued by the CA on said case.16

Meanwhile, on August 24, 1995, Delfino sold two hectares of his tenanted riceland covered by TCT Nos. T-26378 (T-
69592) situated in Barangay Tagapo, Sta. Rosa, Laguna, to SM Prime Holdings, Inc. Though covered by OLT, no EP had
been issued on this portion under TCT No. T-26378 (T-69592).17 A new certificate of title (TCT No. T-389984) in the name
of SM Prime Holdings, Inc.was issued on February 25, 1997.18

On September 13, 1995, Delfino filed before the Provincial Agrarian Reform Adjudicator (PARAD) a petition19 for
cancellation of the EPs previously issued to respondents on the basis of the DAR Secretary’s Order dated December 13,
1995 granting him fivehectares as retention area (DCN- IV-La-0437-95).

On February 17, 1997, respondents filed before the Office of the DAR Secretary a Motion for Clarificatory
Judgment20 praying that an administrative determination be made of the particularportion to be retained and whether such
right of retention will result in the cancellation of EPs already distributed to farmer-beneficiaries identified as of October
21, 1972.

Meanwhile, in a Joint Order21 dated February 19,1997, Provincial Adjudicator Barbara P. Tan granted Delfino’s petition for
cancellation of EPs, as follows:

WHEREFORE, in the light of the foregoing considerations, ORDER is hereby jointly issued in the instant consolidated
petitions, to wit:

1. Declaring an aggregate area offive (5) hectares consisting of the lots covered by the following certificates of title or
Emancipation Patents as Petitioner’s retention area, to wit:

1) Transfer Certificate of Title No. EP-782, EP No. A-326714 in the name of Rodriguez Dacumos
corresponding to a portion thereof with an area of 1.1140 hectares;

2) Transfer Certificate of Title No. EP-791, EP No. A-326741 in the name of Avelino K. Anasao with an
area of 3.0016 hectares;

3) Transfer Certificate of Title No. EP-790, EP No. A-326742 and Transfer Certificate of Title No. EP-792,
EP No. A-326743 in the name of Angel K. Anasao with a total area of .8844 hectare;

2. Directing the Register of Deeds of Laguna to cause the cancellation of the above-mentioned certificates of title
registered in the names of Respondents Avelino K. Anasao and Angel K. Anasao and the reinstatement of Transfer
Certificate of Title No. T-21712 in the name of Renato L. Delfino, Sr.;
3. Directing said Register of Deeds of Laguna to cause the inscription of the instant Order onthe original and Owner’s
duplicate copies of Transfer Certificate of Title No. EP-782, EP No. A-326714 in the name of Respondent Rodriguez
Dacumos in respect of the area of 1.1140 hectares;

4. Declaring the subject parcels of land constituting Petitioner’s retention area reverted to agricultural leasehold status and
private Respondents as the agricultural lessees over their respective landholdings thus reverted;

5. Directing private Respondents Avelino K. Anasao, Angel K. Anasao and Rodriguez Dacumos to surrender their
respective owner’s duplicate of the subject certificates of title or Ema[n]cipation Patents to this Office and/or to its
authorized Officer upon proper writ of execution for purposes of implementing the instant Order, Provided, in the event of
failure or refusal on their part to comply herewith the subject owner’s duplicate of the said certificates of title or
emancipation patents shall be deemed cancelled sans any need of prior surrender.

SO ORDERED.22

A writ of execution was issued on May 19, 1997 directing the DARAB Provincial Sheriff toretrieve the owner’s duplicate
copies of the subject EPs for purposes of cancellation and/or annotation. Respondents then filed a petition for certiorari
inthe CA (CA-G.R. SP No. 44285) to annul the said writ and enjoin its implementation.23

In their Supplemental Motion24 (to the Motion for Clarificatory Judgment), respondents pointed out that Delfino acted in
bad faith when he sold a portion of the OLT-covered land infavor of SM Prime Holdings, Inc. without the required DAR
clearance. They also prayed that the DAR Secretary order the PARAD to stop the implementation of the Joint Order in
DARAB Case No. DCN-IV-La-0437-95.

In his Order25 dated August 8, 1997, Secretary Garilao denied respondents’ motion:

A perusal of the records would show that as far as this Office is concerned, the questioned Order has already become
final and executory as attested to by Director Ruben Joel A. Puertollano of the Bureau of Agrarian Legal Assistance, in his
Memorandum dated 16 May 1997. Even granting, for the sake of argument, that the herein motion could still be
entertained, the undeniable fact remains that the issues sought to be clarified herein have already been ruled upon by this
Office in its Orders dated 28 February 1995 and 13 December 1995. The same issues were raised in petitioners’ Petition
for Review with the Court of Appeals which had likewise been dismissed for being insufficient in form and substance.

WHEREFORE, premises considered, an Order is hereby issued DENYING herein Motion for Clarificatory Judgment. This
case is considered closed.

SO ORDERED.

On September 20, 2001,respondents filed a Petition to Annul and/or Cancel the DAR Secretary’s Orders dated February
28, 1995, December 13, 1995 and August 8, 1997 on the following grounds: (1) Delfino is guilty of fraud,
misrepresentation and concealment of a material fact, in his application for retention; and (2) respondents’ EPs, which are
now covered by transfer certificates of title, can be cancelled only by order of a court, and not by the DAR or its
Secretary.26

On February 2, 2006, DAR Secretary Nasser C. Pangandaman issued an Order27 denying the petition to annul/cancel the
subject orders and clarifying the February 28, 1995 Order of Secretary Garilao, viz:

WHEREFORE, premises considered, Order is hereby issued DENYINGthe Petition to Annul/Cancel the Orders of the
Secretary of Agrarian Reform dated 28 February 1995, 13 December 1995 and 08 August 1997, respectively.
Therefore,the Order dated 28 February 1995 is hereby AFFIRMED.

FURTHER, the Order dated 28 February 1995 is hereby CLARIFIEDto read:

1. The Deed of Sale dated 24 August 1995 executed by the respondent and SM Prime Holdings, Inc. with an area
of two (2) hectares shall be considered as the respondent’s retention area;

2. The remaining three (3) hectares shall either be taken from the 4.8120 hectares covered by TCT Nos. T-21711
(T-49744) and T-216233; and
 3. The concerned Regional Director, PARO and the MARO are hereby DIRECTEDto proceed with the coverage
of the remains of parcels of agricultural land owned by respondent, after having been given the five (5) hectare
retained area pursuant to the above,for distribution to qualified farmerbeneficiaries pursuant to existing rules and
regulations.

SO ORDERED.28

Delfino filed a motion for reconsideration which was denied by Secretary Pangandaman in his Order29 dated May 30,
2007, thus:

It is beyond dispute that the right to choose the retention area pertains to the landowner. However,this Office will not allow
anyone to circumvent the very purpose of the Comprehensive Agrarian Reform Program – the five (5) hectare retention
limit. It bears stressing that the inclusion of the two (2) hectares which is the subjectof the Deed of Sale dated 24 August
1995 executed by the respondent in favor of SM Prime Holdings, Inc., as retained area is only to prevent the former to
exercise his right of retention beyond the maximum limits allowed by law. The herein respondent cannot simultaneously
enjoy from [sic] the proceeds of the Deed of Sale and at the same time exercise the right of retention under CARP.

xxxx

As regards petitioners’ contention thatthere is a need to clarify the Order dated 02 February 2006 in order toeffect the
reinstatement of the cancelled TCTs/EPs, this Office finds the contention unmeritorious. While it is true that the
respondent’s five (5) hectares retained area were already delineated and clarified in the assailed Order dated 02 February
2006, nevertheless, this Office cannot issue a directive reinstating TCT No. EP-791 in favor of petitioner Avelino K.
Anasao covering the 3.0016 hectares landholding and TCT Nos. EP-790 and 792 in favor of petitioner Angel Anasao
covering the landholdings, with an area of 0.7029 and 0.1815 hectare, respectively.

It must be noted that petitioners’ titles were cancelled by the DARAB in a separate action for cancellation filed by herein
respondent Renato L. Delfino, which was docketed as DARAB Case No. IV-La 437-95. This Office, therefore, cannot
interfere with the decision of said forum. To do so would tantamount to encroachment of powers.

Inasmuch as petitioner Rodriguez D. Dacumos filed a Motion to Withdraw Petition and/or Desistance to Further Pursue
Petition, wherein he manifested that he is no longer interested in pursuing the instant case, this Office is constrained to
dismiss the case in so far as petitioner Rodriguez D. Dacumos is concerned. As pointed out by petitioner Rodriguez D.
Dacumos, he and hereinrespondent Renato L. Delfino have threshed out already their differences and reached an
agreement to settle the case amicably. Hence, the petitioner’s prayers, to wit: that his name would be dropped as party
petitioner inthe instant case and the property covered by TCT No. EP-782 would be declared as no longer included in the
instant case, is hereby granted. WHEREFORE, in the light of the foregoing premises, Order is hereby issued
DENYINGthe herein Motion for Reconsideration. Thus, the assailed Order dated 2 February 2006 is hereby AFFIRMED.

SO ORDERED.30

Respondents appealed the Orders dated February 2,2006 and May 30, 2007 to the OP.

On February 6, 2008, the OP rendered its Decision partly granting the appeal by nullifying the portion of the May 30, 2007
Order of Secretary Pangandaman which clarified Secretary Garilao’s February 28, 1995 Order. Said office ruled that the
two hectaressold to SM Prime Holdings, Inc. would not bring about any ambiguity in the execution of the Order dated
February 28, 1995, in relation to the December 13, 1995 and August 8, 1997 Orders, and that whatever remains after
deducting the 9.6717 hectares reserved for the farmer-beneficiaries pertains to Delfino. As to the remaining portion of the
May 30, 2007 Order of Secretary Pangandaman, the same was upheld.

Respondents’ motion for reconsideration was denied under the OP’s Resolution dated September 30, 2008.

The case was elevatedby respondents to the CA via a petition for review under Rule 43. By Decision dated January 31,
2011, the CA reversed the OP’s ruling and reinstated the Orders dated February 2, 2006 and May 30, 2007 of Secretary
Pangandaman. According to the CA, the ambiguity in the February 28, 1995 Order of Secretary Garilao lies in its failure to
specify as to which portion of the 14.617 hectaresshould the five hectares retention area of Delfino be taken. Thus,
evenafter the said order had become final and executory, the DAR Secretary is not precluded from making the necessary
amendments/clarifications thereof so that the fallo would at least conform with the body of said order and so that the same
could readily be executed with dispatch. But since Delfino sold two hectares to SM Prime Holdings, Inc. before the
ambiguity could be properly addressed by DAR, the CA found no reversible error in the February 2, 2006 Order clarifying
the ambiguity and in the May 30, 2007 Order stating the rationale for such clarification.

Delfino, represented by his surviving heirs (petitioners) filed a motion for reconsideration but the CA deniedit under
Resolution dated June 17, 2011.

Issues

The issues to be resolved in the present controversy are: (1) whether the February 2, 2006 Order of Secretary
Pangandaman, insofar as it clarified the February 28, 1995 Order of Secretary Garilao, violated the rule on immutability of
final judgments; and (2) whether the inclusion of the twohectare portion sold to SM Prime Holdings, Inc. in Delfino’s
retention area was in derogation of Section 6 of Republic Act No. 6657 (RA 6657).

Our Ruling

We grant in part the petition.

The right of retention is a constitutionally guaranteed right, which is subject to qualification by the legislature.It serves to
mitigate the effects of compulsory land acquisition by balancing the rights of the landowner and the tenant and by
implementing the doctrine that social justice was not meant to perpetrate an injustice against the landowner.31

In the landmark case of Association of Small Landowners in the Phils., Inc. v. Secretary of Agrarian Reform,32 this Court
held that landowners who have not yet exercised their retention rights under PD 27 are entitled to the new retention rights
under RA 6657. Section 6 of the latter law defines the nature and incidents of the landowner’s right to retention, thus:

SEC. 6. Retention Limits– Exceptas otherwise provided in this Act, no person may own or retain, directly or indirectly, any
public or private agricultural land, the size of which shall vary according to factors governing a viable family-sized farm,
such as commodity produced, terrain, infrastructure, and soil fertility as determined by the Presidential Agrarian Reform
Council (PARC) created hereunder, but in no case shall retention by the landowner exceed five (5) hectares. Three (3)
hectares may be awarded to each child of the landowner, subject to the following qualifications: (1) that he is at least
fifteen (15) years of age; and (2) that he is actually tilling the land or directly managing the farm: Provided, That
landowners whose land have been covered by Presidential Decree No. 27 shall be allowed to keep the area originally
retained by them thereunder; Provided, further, That original homestead grantees or their direct compulsory heirs who still
own the original homestead at the time of the approval of this Act shall retain the same areas as long as they continue to
cultivate said homestead.

The right to choose the area to be retained, which shall be compact or contiguous, shall pertain to the landowner;
Provided, however, That in case the area selected for retention by the landowner is tenanted, the tenant shall have the
option to choose whether to remain therein or be a beneficiary in the same or another agricultural land with similar or
comparable features. In casethe tenant chooses to remain in the retained area, he shall be considered a leaseholder and
shall lose his right to be a beneficiary under this Act. In case the tenant chooses to be a beneficiary in another agricultural
land, he loses his right as a leaseholder to the land retained by the landowner. The tenant must exercise this option within
a period of one (1) year fromthe time the landowner manifests his choice of the area for retention.

In all cases, the security of tenure of the farmers or farmworkers on the land prior to the approval of this Act shall be
respected.

Upon the effectivity of this Act,any sale, disposition, lease, management contract or transfer ofpossession of private lands
executed by the original landowner in violation of this Act shall be null and void; Provided, however, That those executed
prior to this Act shall be valid only when registered with the Registerof Deeds within a period of three (3) months after the
effectivity of this Act. Thereafter, all Registers of Deeds shall inform the DAR within thirty (30) days of any transaction
involving agricultural lands in excess of five (5) hectares. (Emphasis supplied.) Under the February 28, 1995 Order of
Secretary Garilao, Delfino was granted five hectares "from the tenantedportion as his retained area." Said order had
become final and executory on March 9, 1997.

A decision that has acquired finality becomes immutable and unalterable, and may no longer be modified in any respect,
even if the modification is meant to correct erroneous conclusions of fact or law, and whether it will be made by the court
that rendered it or by the highest court of the land.33 This doctrine of finality and immutability of judgments is grounded on
fundamental considerationsof public policy and sound practice to the effect that, at the risk of occasional error, the
judgments of the courts must become final at somedefinite date set by law.34
There are, however, exceptions to the general rule, namely: (1) the correction of clerical errors; (2) the so-called nunc pro
tuncentries which cause no prejudice to any party; (3) void judgments; and (4) whenever circumstances transpire after the
finality of the decision rendering its execution unjust and inequitable.35 The exception to the doctrine of immutability of
judgment has been applied in several cases in order to serve substantial justice.36

In this case, the clarification made by Secretary Pangandaman in his February 2, 2006 Order falls under the fourth
exception.

It is true that the February 28, 1995 Order of Secretary Garilao stated that the five hectares shall be taken from the
tenanted area, which pertains to the 9.8597 hectaresof which 6.5671 hectares were already issued with EPs in favor of
respondents. Subsequently, however, without prior clearance from the DAR, Delfino sold two hectares of land covered by
OLT to SM Prime Holdings, Inc. The DAR Secretary thus found it fair and equitable to include the said portion to Delfino’s
retention area, which meant that Delfino is entitled only to the balance of three hectares.

As explained by Secretary Pangandaman in his order denying Delfino’s motion for reconsideration, thisclarification was
made in order not to circumvent the five-hectare limitation as said landowner "cannot [be allowed to] simultaneously enjoy
… the proceeds of the [sale] and at the same time exercise the right of retention"37 to the maximum of five hectares.

Petitioners argue that the amendment/clarification of the February 28, 1995 Order resulted in the diminution of Delfino’s
right of retention under Section 6 of RA 6657 because the DAR Secretary cannot impose on the landowner the area of
retention, the choice of the landowner having been upheld in numerous cases decided by this Court particularly in Daez v.
Court of Appeals38 .It is further contended that the two hectares sold to SM by Delfino cannot be considered as retention
area, the same having been declared not agricultural land, pursuant to the Exemption Order39 dated September 14, 2005
issued by Regional Director Homer P. Tobias.

On the matter of allowing Delfino to choose the remaining three hectares of his retention area,we rule for the petitioners.

While we agree with Secretary Pangandaman in holding that Delfino had partially exercised his right of retention when he
sold two hectares to SM Prime Holdings, Inc., afterhis application for retention was granted by Secretary Garilao, we
cannot affirm the portion of the February 2, 2006 Order which decreed that the remaining three hectares shall be taken
"either from the 4.8120 hectares covered by TCT Nos. T-21711 (T-49744) and T-216233."40 Such directive encroaches on
the prerogative expressly given to landowners under Section 6 of RA 6657 tochoose their area of retention.

As this Court held in Daez v. Court of Appeals,41 the right of retention can be exercised over tenanted land and even
where CLOAs or EPs have been issued to tenant-farmers provided that the right of tenants under Section 6 of RA 6657 is
similarly protected. Thus:

…For as long as the area to be retained is compact or contiguous and it does not exceed the retention ceiling of five (5)
hectares, a landowner’s choice of the area to be retained, must prevail.Moreover, Administrative Order No. 4, series of
1991, which supplies the details for the exercise of a landowner’s retention rights, likewise recognizes no limit to the
prerogative of the landowner, although he is persuaded to retain other lands instead to avoid dislocation of farmers.

Without doubt, this right of retention may be exercised over tenanted land despite even the issuance of Certificate of Land
Transfer (CLT) to farmer-beneficiaries. What must be protected, however, is the right of the tenants toopt to either stay on
the land chosen to be retained by the landowner or be a beneficiary in another agricultural land with similar or comparable
features.

xxxx

The issuance of EPs or CLOAs to beneficiaries does not absolutely bar the landowner fromretaining the area covered
thereby. Under Administrative Order No. 2, series of 1994, an EP or CLOA may be cancelled if the land covered is later
found to be part of the landowner’s retained area.

A certificate of title accumulates inone document a comprehensive statement of the status of the fee heldby the owner of
a parcel of land. As such, it is a mere evidence of ownership and it does not constitute the title to the land itself. It cannot
confer title where no title has been acquired by any of the means provided by law.

Thus, we had, in the past, sustained the nullification of a certificate of title issued pursuant to a homestead patent because
the land covered was not part of the public domain and as a result, the government had no authority to issue such patent
in the first place. Fraud in the issuance of the patent, is also a ground for impugning the validity of a certificate of title. In
other words, the invalidity of the patent or title is sufficient basis for nullifying the certificate of title since the latter is merely
an evidence of the former.

In the instant case, the CLTs of private respondents over the subject 4.1685-hectare riceland were issued without Eudosia
Daez having been accorded her right of choice as to what to retain among her landholdings. The transfer certificates of
title thus issued on the basis of those CLTs cannot operate to defeat the right of the heirs of deceased Eudosia Daez to
retain the said 4.1685 hectares of riceland.42 (Underscoring in the original; emphasis supplied.)

As to the Exemption Order allegedly issued by the DAR Regional Director dated September 14, 2005, the Court notes
that the matter of SM Prime Holdings, Inc.’s application for exemption from CARP coverage was never raised by
petitioners during the proceedings before the Regional Director and OP. Records showed that the administrative
declaration of "non-agricultural" use of the two-hectare portion sold to SM Prime Holdings, Inc. pursuant to a 1981 zoning
classification ordinance, was mentioned by petitioners for the first time in their Motion for Reconsideration dated February
17, 2011 after the CA rendered its adverse ruling, attaching a photocopy thereof tothe motion. The only grounds or
arguments invoked by petitioners in their Memorandum submitted to the CA were the finality of the assailed DAR
Secretary’s Orders dated February 28, 1995, December 13, 1995 and August 8, 1997 and that respondents’ petition for
review was filed out of time.

The general rule is that issues raised for the first time on appeal and not raised in the proceedings in the lower court are
barred by estoppel. Points of law, theories, issues, and arguments not brought to the attention of the trial court ought not
to be considered by a reviewing court, as these cannot be raised for the first time on appeal. To consider the alleged facts
and arguments raised belatedly would amount to trampling on the basic principles of fair play, justice, and due process.43

Finally, we find no merit in respondents’ argument that the present petition should be dismissed for failure of the other co-
heirs/co-petitioners to sign the verification and certification against forum-shopping as required by Sections 4 and 5, Rule
7 of the 1997 Rules of Civil Procedure. In the case of Iglesia Ni Cristo v. Judge Ponferrada44 we expounded on the
purpose and sufficiency of compliance with the verification and certification against forum shopping requirements, viz:

The issue in the present case is not the lack of verification but the sufficiency of one executed by only one of plaintiffs.
This Court held in Ateneo de Naga University v. Manalo, that the verification requirement is deemed substantially
complied with when, as in the present case, only one of the heirs-plaintiffs, who has sufficient knowledge and belief to
swear to the truth of the allegations in the petition (complaint), signed the verification attached to it.Such verification is
deemed sufficient assurance that the matters alleged in the petition have been made in good faith or are true and correct,
not merely speculative.

The same liberality should likewise be applied to the certification against forum shopping.1âwphi1 The general rule is that
the certification must be signed by all plaintiffs in a case and the signature of only one of them is insufficient. However, the
Court has also stressed in a number of cases that the rules onforum shopping were designed to promote and facilitate the
orderly administration of justice and thus should not be interpreted with such absolute literalness as to subvert its own
ultimate and legitimate objective. The rule of substantial compliance may be availed of with respect to the contents of the
certification. This is because the requirement of strict compliance with the provisions merely underscores its mandatory
nature in that the certification cannot be altogether dispensed with or its requirements completely disregarded.

The substantial compliance rule has been applied by this Court in a number of cases: Cavile v. Heirs of Cavile, where the
Court sustained the validity of the certification signed by only one of petitioners because he is a relative of the other
petitioners and co-owner of the properties in dispute; Heirs of Agapito T. Olarte v. Office of the President of the
Philippines, where the Court allowed a certification signed by only two petitioners because the case involved a family
home in which all the petitioners shared a common interest; Gudoy v. Guadalquiver, where the Court considered as valid
the certification signed by only four of the nine petitioners because all petitioners filed as co-owners pro indivisoa
complaint against respondents for quieting of title and damages, as such, they all have joint interest in the undivided
whole; and Dar v. AlonzoLegasto, where the Court sustained the certification signed by only one of the spouses as they
were sued jointly involving a property in which they had a common interest.

It is noteworthy that in all of the above cases, the Court applied the rule on substantial compliance because of the
commonality of interest of all the parties with respect to the subject of the controversy.45 (Emphasis supplied.)

WHEREFORE, the petition is PARTLY GRANTED.The Decision dated January 31, 2011 of the Court ofAppeals in CA-
G.R. SP No. 111147 is AFFIRMEDinsofar as it upheld the February 2, 2006 Order of Secretary Pangandaman declaring
the two-hectare land covered by TCT No. T-26378 (T-69592) which was sold by Renato L. Delfino, Sr. to SM Prime
Holdings, Inc. as part of his retention area.

The aforesaid Order is MODIFIED in that herein petitioners, heirs of Delfino, Sr., are hereby allowed to choose three
hectares of their retention area from the remaining portions of Delfino, Sr.’s landholding situated in Sta. Rosa, Laguna,
subject to the conditions laid down in Section 6 of RA 6657 and DAR regulations. Respondents are likewise entitled to
exercise the rights granted to tenants-beneficiaries affected by landowner’s retention.

SO ORDERED.

G.R. No.176549

DEPARTMENT OF AGRARIAN REFORM, QUEZON CITY & PABLO MENDOZA, Petitioners,

vs.
ROMEO C. CARRIEDO, Respondent.

DECISION

JARDELEZA, J.:

This is a Petition for Review on Certiorari1 assailing the Court of Appeals Decision dated October 5, 20062 and Resolution
dated January 10, 20073 in CA-G.R. SP No. 88935. The Decision and Resolution reversed the Order dated February 22,
20054 issued by the Department of Agrarian Reform-Central Office (DAR-CO) in Administrative Case No. A-9999-03-CV-
008-03 which directed that a 5.0001 hectare piece of agricultural land (land) be placed under the Comprehensive Agrarian
Reform Program pursuant to Republic Act (RA) No. 6657 or the Comprehensive Agrarian Reform Law.

The Facts

The land originally formed part of the agricultural land covered by Transfer Certificate of Title (TCT) No. 17680,5 which in
turn, formed part of the total of 73.3157 hectares of agricultural land owned by Roman De Jesus (Roman).6

On May 23, 1972, petitioner Pablo Mendoza (Mendoza) became the tenant of the land by virtue of a Contrato King
Pamamuisan7 executed between him and Roman. Pursuant to the Contrato, Mendoza has been paying twenty-five (25)
piculs of sugar every crop year as lease rental to Roman. It was later changed to Two Thousand Pesos (P2, 000.00) per
crop year, the land being no longer devoted to sugarcane.8

On November 7, 1979, Roman died leaving the entire 73.3157 hectares to his surviving wife Alberta Constales (Alberta),
and their two sons Mario De Jesus (Mario) and Antonio De Jesus (Antonio).9 On August 23, 1984, Antonio executed a
Deed of Extrajudicial Succession with Waiver of Right10 which made Alberta and Mario co-owners in equal proportion of
the agricultural land left by Roman.11

On June 26, 1986, Mario sold12 approximately 70.4788 hectares to respondent Romeo C. Carriedo (Carriedo), covered by
the following titles and tax declarations, to wit:

1. TCT No. 35055

2. (Tax Declaration) TD No. 48354

3. TCT No. 17681

4. TCT No. 56897

5. TCT No. 17680

The area sold to Carriedo included the land tenanted by Mendoza (forming part of the area covered by TCT No. 17680).
Mendoza alleged that the sale took place without his knowledge and consent.
In June of 1990, Carriedo sold all of these landholdings to the Peoples’ Livelihood Foundation, Inc. (PLFI) represented by
its president, Bernabe Buscayno.13 All the lands, except that covered by TCT No. 17680, were subjected to Voluntary
Land Transfer/Direct Payment Scheme and were awarded to agrarian reform beneficiaries in 1997.14

The parties to this case were involved in three cases concerning the land, to wit:

The Ejectment Case (DARAB Case No. 163-T-90 | CAG.R. SP No. 44521 | G.R. No. 143416)

On October 1, 1990, Carriedo filed a Complaint for Ejectment and Collection of Unpaid Rentals against Mendoza before
the Provincial Agrarian Reform Adjudication Board (PARAD) of Tarlac docketed as DARAB Case No. 163-T-90. He
subsequently filed an Amended Complaint on October 30, 1990.15

In a Decision dated June 4, 1992,16 the PARAD ruled that Mendoza had knowledge of the sale, hence, he could not deny
the fact nor assail the validity of the conveyance. Mendoza violated Section 2 of Presidential Decree (PD) No.
816,17 Section 50 of RA No. 119918 and Section 36 of RA No. 3844,19 and thus, the PARAD declared the leasehold
contract terminated, and ordered Mendoza to vacate the premises.20

Mendoza filed an appeal with the Department of Agrarian Reform Adjudication Board (DARAB).1âwphi1 In a Decision
dated February 8, 1996,21 the DARAB affirmed the PARAD Decision in toto. The DARAB ruled that ownership of the land
belongs to Carriedo. That the deed of sale was unregistered did not affect Carriedo’s title to the land. By virtue of his
ownership, Carriedo was subrogated to the rights and obligation of the former landowner, Roman.22

Mendoza then filed a Petition for Review with the Court of Appeals (CA). The case was docketed as CA-G.R. SP No.
44521. In a Decision dated September 7, 1998,23 the CA affirmed the DARAB decision in toto. The CA ruled that
Mendoza’s reliance on Section 6 of RA No. 6657 as ground to nullify the sale between De Jesus and Carriedo was
misplaced, the section being limited to retention limits. It reiterated that registration was not a condition for the validity of
the contract of sale between the parties.24 Mendoza’s Motions for Reconsideration and New Trial were subsequently
denied.25

Mendoza thus filed a Petition for Review on Certiorari  with this Court, docketed as G.R. No. 143416. In a Resolution
dated August 9, 2000,26 this Court denied the petition for failure to comply with the requirements under Rule 45 of the
Rules of Court. An Entry of Judgment was issued on October 25, 2000.27 In effect, the Decision of the CA was affirmed,
and the following issues were settled with finality:

1) Carriedo is the absolute owner of the five (5) hectare land;

2) Mendoza had knowledge of the sale between Carriedo and Mario De Jesus, hence he is bound by the sale;
and

3) Due to his failure and refusal to pay the lease rentals, the tenancy relationship between Carriedo and Mendoza
had been terminated.

Meanwhile, on October 5, 1999, the landholding covered by TCT No. 17680 with an area of 12.1065 hectares was divided
into sub-lots. 7.1065 hectares was transferred to Bernabe Buscayno et al. through a Deed of Transfer28 under PD No.
27.29 Eventually, TCT No. 17680 was partially cancelled, and in lieu thereof, emancipation patents (EPs) were issued to
Bernabe, Rod and Juanito, all surnamed Buscayno. These lots were identified as Lots C, D and E covered by TCT Nos.
44384 to 44386 issued on September 10, 1999.30 Lots A and B, consisting of approximately 5.0001 hectares and which is
the land being occupied by Mendoza, were registered in the name of Carriedo and covered by TCT No. 34428131 and
TCT No. 344282.32

The Redemption Case (DARAB III-T-1476-97 | CA-G.R. SP No. 88936)

On July 21, 1997, Mendoza filed a Petition for Redemption33 with the PARAD. In an Order dated January 15, 2001,34 the
PARAD dismissed his petition on the grounds of litis pendentia and lack of the required certification against forum-
shopping.  It dismissed the petition so that the pending appeal of DARAB Case No. 163-T-90 (the ejectment case
discussed above) with the CA can run its full course, since its outcome partakes of a prejudicial question determinative of
the tenability of Mendoza’s right to redeem the land under tenancy.35
Mendoza appealed to the DARAB which reversed the PARAD Order in a Decision dated November 12, 2003.36 The
DARAB granted Mendoza redemption rights over the land. It ruled that at the time Carriedo filed his complaint for
ejectment on October 1, 1990, he was no longer the owner of the land, having sold the land to PLFI in June of 1990.
Hence, the cause of action pertains to PLFI and not to him.37 It also ruled that Mendoza was not notified of the sale of the
land to Carriedo and of the latter’s subsequent sale of it to PLFI. The absence of the mandatory requirement of notice did
not stop the running of the 180 day-period within which Mendoza could exercise his right of redemption.38 Carriedo’s
Motion for Reconsideration was subsequently denied.39

Carriedo filed a Petition for Review with the CA. In a Decision dated December 29, 2006,40 the CA reversed the DARAB
Decision. It ruled that Carriedo’s ownership of the land had been conclusively established and even affirmed by this Court.
Mendoza was not able to substantiate his claim that Carriedo was no longer the owner of the land at the time the latter
filed his complaint for ejectment. It held that the DARAB erred when it ruled that Mendoza was not guilty of forum-
shopping.41 Mendoza did not appeal the decision of the CA.

The Coverage Case (ADM Case No. A-9999-03-CV-008-03 | CA-G.R. SP No. 88935)

On February 26, 2002, Mendoza, his daughter Corazon Mendoza (Corazon) and Orlando Gomez (Orlando) filed a
Petition for Coverage42 of the land under RA No. 6657. They claimed that they had been in physical and material
possession of the land as tenants since 1956, and made the land productive.43 They prayed (1) that an order be issued
placing the land under Comprehensive Agrarian Reform Program (CARP); and (2) that the DAR, the Provincial Agrarian
Reform Officer (PARO) and the Municipal Agrarian Reform Officer (MARO) of Tarlac City be ordered to proceed with the
acquisition and distribution of the land in their favor.44 The petition was granted by the Regional Director (RD) in an Order
dated October 2, 2002,45 the dispositive portion of which reads:

WHEREFORE, foregoing premises considered, the petition for coverage under CARP filed by Pablo Mendoza, et al[.], is
given due course. Accordingly, the MARO and PARO are hereby directed to place within the ambit of RA 6657 the
landholding registered in the name of Romeo Carriedo covered and embraced by TCT Nos. 334281 and 334282, with an
aggregate area of 45,000 and 5,001 square meters, respectively, and to distribute the same to qualified farmer-
beneficiaries.

SO ORDERED.46

On October 23, 2002, Carriedo filed a Protest with Motion to Reconsider the Order dated October 2, 2002 and to Lift
Coverage47 on the ground that he was denied his constitutional right to due process. He alleged that he was not notified of
the filing of the Petition for Coverage, and became aware of the same only upon receipt of the challenged Order.

On October 24, 2002, Carriedo received a copy of a Notice of Coverage dated October 21, 200248 from MARO Maximo E.
Santiago informing him that the land had been placed under the coverage of the CARP.49 On December 16, 2002, the RD
denied Carriedo’s protest in an Order dated December 5, 2002.50 Carriedo filed an appeal to the DAR-CO.

In an Order dated February 22, 2005,51 the DAR-CO, through Secretary Rene C. Villa, affirmed the Order of the RD
granting coverage. The DAR-CO ruled that Carriedo was no longer allowed to retain the land due to his violation of the
provisions of RA No. 6657. His act of disposing his agricultural landholdings was tantamount to the exercise of his
retention right, or an act amounting to a valid waiver of such right in accordance with applicable laws and
jurisprudence.52 However, it did not rule whether Mendoza was qualified to be a farmer-beneficiary of the land. The
dispositive portion of the Order reads:

WHEREFORE, premises considered, the instant appeal is hereby DISMISSED for lack of merit. Consequently, the Order
dated 2 October 2002 of the Regional Director of DAR III, is hereby AFFIRMED.

SO ORDERED.53

Carriedo filed a Petition for Review54 with the CA assailing the DAR-CO Order. The appeal was docketed as CA-G.R. SP
No. 88935. In a Decision dated October 5, 2006, the CA reversed the DAR-CO, and declared the land as Carriedo’s
retained area. The CA ruled that the right of retention is a constitutionally-guaranteed right, subject to certain qualifications
specified by the legislature.55 It serves to mitigate the effects of compulsory land acquisition by balancing the rights of the
landowner and the tenant by implementing the doctrine that social justice was not meant to perpetrate an injustice against
the landowner.56 It held that Carriedo did not commit any of the acts which would constitute waiver of his retention rights
found under Section 6 of DAR Administrative Order No. 02, S.2003.57 The dispositive portion of the Decision reads:
WHEREFORE, premises considered and pursuant to applicable law and jurisprudence on the matter, the present Petition
is hereby GRANTED. Accordingly, the assailed Order of the Department of Agrarian Reform-Central Office, Elliptical
Road, Diliman, Quezon City (dated February 22, 2005) is hereby REVERSED and SET ASIDE and a new one entered—
DECLARING the subject landholding as the Petitioner’s retained area. No pronouncements as to costs.

SO ORDERED.58

Hence, this petition.

Petitioners maintain that the CA committed a reversible error in declaring the land as Carriedo’s retained area.59

They claim that Paragraph 4, Section 6 of RA No. 6657 prohibits any sale, disposition, lease, management contract or
transfer of possession of private lands upon effectivity of the law.60 Thus, Regional Director Renato Herrera correctly
observed that Carriedo’s act of disposing his agricultural property would be tantamount to his exercise of retention under
the law. By violating the law, Carriedo could no longer retain what was left of his property. "To rule otherwise would be a
roundabout way of rewarding a landowner who has violated the explicit provisions of the Comprehensive Agrarian Reform
Law."61

They also assert that Carriedo waived his right to retain for failure or neglect for an unreasonable length of time to do that
which he may have done earlier by exercising due diligence, warranting a presumption that he abandoned his right or
declined to assert it.62 Petitioners claim that Carriedo has not filed an Application for Retention over the subject land over a
considerable passage of time since the same was acquired for distribution to qualified farmer beneficiaries.63

Lastly, they argue that Certificates of Land Ownership Awards (CLOAs) already generated in favor of his co-petitioners
Corazon Mendoza and Rolando Gomez cannot be set aside. CLOAs under RA No. 6657 are enrolled in the Torrens
system of registration which makes them indefeasible as certificates of title issued in registration proceedings.64

The Issue

The sole issue for our consideration is whether Carriedo has the right to retain the land.

Our Ruling

We rule in the affirmative. Carriedo did not waive his right of retention over the land.1âwphi1

The 1987 Constitution expressly recognizes landowner retention rights under Article XIII, Section 4, to wit:

Section 4. The State shall, by law, undertake an agrarian reform program founded on the right of farmers and regular
farmworkers, who are landless, to own directly or collectively the lands they till or, in the case of other farmworkers, to
receive a just share of the fruits thereof. To this end, the State shall encourage and undertake the just distribution of
all agricultural lands, subject to such priorities and reasonable retention limits as the Congress may prescribe,
taking into account ecological, developmental, or equity considerations, and subject to the payment of just compensation.
In determining retention limits, the State shall respect the right of small landowners. The State shall further provide
incentives for voluntary land-sharing. (Emphasis supplied.)

RA No. 6657 implements this directive, thus:

Section 6. Retention Limits. — Except as otherwise provided in this Act, no person may own or retain, directly or
indirectly, any public or private agricultural land, the size of which shall vary according to factors governing a viable family-
size farm, such as commodity produced, terrain, infrastructure, and soil fertility as determined by the Presidential Agrarian
Reform Council (PARC) created hereunder, but in no case shall retention by the landowner exceed five (5) hectares.

xxx

The right to choose the area to be retained, which shall be compact or contiguous, shall pertain to the landowner:
Provided, however, That in case the area selected for retention by the landowner is tenanted, the tenant shall have the
option to choose whether to remain therein or be a beneficiary in the same or another agricultural land with similar or
comparable features. In case the tenant chooses to remain in the retained area, he shall be considered a leaseholder and
shall lose his right to be a beneficiary under this Act. In case the tenant chooses to be a beneficiary in another agricultural
land, he loses his right as a leaseholder to the land retained by the landowner. The tenant must exercise this option within
a period of one (1) year from the time the landowner manifests his choice of the area for retention. In all cases, the
security of tenure of the farmers or farmworkers on the land prior to the approval of this Act shall be respected. xxx
(Emphasis supplied.)

In Danan v. Court of Appeals,65 we explained the rationale for the grant of the right of retention under agrarian reform laws
such as RA No. 6657 and its predecessor PD No. 27, to wit:

The right of retention is a constitutionally guaranteed right, which is subject to qualification by the legislature. It serves to
mitigate the effects of compulsory land acquisition by balancing the rights of the landowner and the tenant and by
implementing the doctrine that social justice was not meant to perpetrate an injustice against the landowner. A retained
area, as its name denotes, is land which is not supposed to anymore leave the landowner's dominion, thus sparing the
government from the inconvenience of taking land only to return it to the landowner afterwards, which would be a
pointless process. For as long as the area to be retained is compact or contiguous and does not exceed the retention
ceiling of five (5) hectares, a landowner's choice of the area to be retained must prevail. xxx66

To interpret Section 6 of RA No. 6657, DAR issued Administrative Order No. 02, Series of 2003 (DAR AO 02-03). Section
6 of DAR AO 02-03 provides for the instances when a landowner is deemed to have waived his right of retention, to wit:

Section 6. Waiver of the Right of Retention.  – The landowner waives his right to retain by committing any of the following
act or omission:

6.1 Failure to manifest an intention to exercise his right to retain within sixty (60) calendar days from receipt of
notice of CARP coverage.

6.2 Failure to state such intention upon offer to sell or application under the [Voluntary Land Transfer
(VLT)]/[Direct Payment Scheme (DPS)] scheme.

6.3 Execution of any document stating that he expressly waives his right to retain. The MARO and/or PARO
and/or Regional Director shall attest to the due execution of such document.

6.4 Execution of a Landowner Tenant Production Agreement and Farmer’s Undertaking (LTPA-FU) or Application
to Purchase and Farmer’s Undertaking  (APFU) covering subject property.

6.5 Entering into a VLT/DPS or [Voluntary Offer to Sell (VOS)] but failing to manifest an intention to exercise his
right to retain upon filing of the application for VLT/DPS or VOS.

6.6 Execution and submission of any document indicating that he is consenting to the CARP coverage of his
entire landholding.

6.7 Performing any act constituting estoppel by laches which is the failure or neglect for an unreasonable length of
time to do that which he may have done earlier by exercising due diligence, warranting a presumption that he
abandoned his right or declined to assert it.

Petitioners cannot rely on the RD’s Order dated October 2, 2002 which granted Mendoza’s petition for coverage on the
ground that Carriedo violated paragraph 4 Section 667 of RA No. 6657 for disposing of his agricultural land, consequently
losing his right of retention. At the time when the Order was rendered, up to the time when it was affirmed by the DAR-CO
in its Order dated February 22, 2005, the applicable law is Section 6 of DAR 02-03. Section 6 clearly shows that the
disposition of agricultural land is not an act constituting waiver of the right of retention.

Thus, as correctly held by the CA, Carriedo "[n]ever committed any of the acts or omissions above-stated (DAR AO 02-
03). Not even the sale made by the herein petitioner in favor of PLFI can be considered as a waiver of his right of
retention. Likewise, the Records of the present case is bereft of any showing that the herein petitioner expressly waived
(in writing) his right of retention as required under sub-section 6.3, section 6, DAR Administrative Order No. 02-S.2003."68

Petitioners claim that Carriedo’s alleged failure to exercise his right of retention after a long period of time constituted a
waiver of his retention rights, as envisioned in Item 6.7 of DAR AO 02-03.

We disagree.
Laches is defined as the failure or neglect for an unreasonable and unexplained length of time, to do that which by
exercising due diligence could or should have been done earlier; it is negligence or omission to assert a right within a
reasonable time, warranting a presumption that the party entitled to assert it either has abandoned it or declined to assert
it.69 Where a party sleeps on his rights and allows laches to set in, the same is fatal to his case.70

Section 4 of DAR AO 02-03 provides:

Section 4. Period to Exercise Right of Retention under RA 6657

4.1 The landowner may exercise his right of retention at any time before receipt of notice of coverage.

4.2 Under the Compulsory Acquisition (CA) scheme, the landowner shall exercise his right of retention within sixty
(60) days from receipt of notice of coverage.

4.3 Under the Voluntary Offer to Sell (VOS) and the Voluntary Land Transfer (VLT)/Direct Payment Scheme
(DPS), the landowner shall exercise his right of retention simultaneously at the time of offer for sale or transfer.

The foregoing rules give Carriedo any time before receipt of the notice of coverage to exercise his right of retention, or if
under compulsory acquisition (as in this case), within sixty (60) days from receipt of the notice of coverage. The validity of
the notice of coverage is the very subject of the controversy before this court. Thus, the period within which Carriedo
should exercise his right of retention cannot commence until final resolution of this case.

Even assuming that the period within which Carriedo could exercise his right of retention has commenced, Carriedo
cannot be said to have neglected to assert his right of retention over the land. The records show that per Legal Report
dated December 13, 199971 prepared by Legal Officer Ariel Reyes, Carriedo filed an application for retention which was
even contested by Pablo Mendoza’s son, Fernando.72 Though Carriedo subsequently withdrew his application, his act of
filing an application for retention belies the allegation that he abandoned his right of retention or declined to assert it.

In their Memorandum73 however, petitioners, for the first time, invoke estoppel, citing DAR Administrative Order No. 05
Series of 200674 (DAR AO 05-06) to support their argument that Carriedo waived his right of retention.75 DAR AO 05-06
provides for the rules and regulations governing the acquisition and distribution of agricultural lands subject of
conveyances under Sections 6, 7076 and 73 (a)77 of RA No. 6657. Petitioners particularly cite Item no. 4 of the Statement
of Policies of DAR AO 05-06, to wit:

II. Statement of Policies

4. Where the transfer/sale involves more than the five (5) hectares retention area, the transfer is considered violative of
Sec. 6 of R.A. No. 6657.

In case of multiple or series of transfers/sales, the first five (5) hectares sold/conveyed without DAR clearance and the
corresponding titles issued by the Register of Deeds (ROD) in the name of the transferee shall, under the principle of
estoppel, be considered valid and shall be treated as the transferor/s’ retained area but in no case shall the
transferee exceed the five-hectare landholding ceiling pursuant to Sections 6, 70 and 73(a) of R.A. No. 6657. Insofar as
the excess area is concerned, the same shall likewise be covered considering that the transferor has no right of
disposition since CARP coverage has been vested as of 15 June 1988. Any landholding still registered in the name of the
landowner after earlier dispositions totaling an aggregate of five (5) hectares can no longer be part of his retention area
and therefore shall be covered under CARP. (Emphasis supplied.)

Citing this provision, petitioners argue that Carriedo lost his right of retention over the land because he had already sold or
disposed, after the effectivity of RA No. 6657, more than fifty (50) hectares of land in favor of another.78

In his Memorandum,79 Carriedo maintains that petitioners cannot invoke any administrative regulation to defeat his right of
retention. He argues that "administrative regulation must be in harmony with the provisions of law otherwise the latter
prevails."80

We cannot sustain petitioners' argument. Their reliance on DAR AO 05-06 is misplaced. As will be seen below, nowhere
in the relevant provisions of RA No. 6657 does it indicate that a multiple or series of transfers/sales of land would result in
the loss of retention rights. Neither do they provide that the multiple or series of transfers or sales amounts to the waiver
of such right.
The relevant portion of Section 6 of RA No. 6657 referred to in Item no. 4 of DAR AO 05-06 provides:

Section 6. Retention Limits. – Except as otherwise provided in this Act, no person may own or retain, directly or indirectly,
any public or private agricultural land, the size of which shall vary according to factors governing a viable family-size farm,
such as the commodity produced, terrain, infrastructure, and soil fertility as determined by the Presidential Agrarian
Reform Council (PARC) created hereunder, but in no case shall retention by the landowner exceed five (5) hectares. xxx

Upon the effectivity of this Act, any sale, disposition, lease, management, contract or transfer of possession of
private lands executed by the original landowner in violation of the Act shall be null and void: Provided, however,
That those executed prior to this Act shall be valid only when registered with the Register of Deeds within a period of three
(3) months after the effectivity of this Act. Thereafter, all Registers of Deeds shall inform the Department of Agrarian
Reform (DAR) within thirty (30) days of any transaction involving agricultural lands in excess of five (5) hectares.
(Emphasis supplied.)

Section 70 of RA No. 6657, also referred to in Item no. 4 of DAR AO 05-06 partly provides:

The sale or disposition of agricultural lands retained by a landowner as a consequence of Section 6 hereof shall be valid
as long as the total landholdings that shall be owned by the transferee thereof inclusive of the land to be acquired shall
not exceed the landholding ceilings provided for in this Act. Any sale or disposition of agricultural lands after the
effectivity of this Act found to be contrary to the provisions hereof shall be null and void. xxx (Emphasis supplied.)

Finally, Section 73 (a) of RA No. 6657 as referred to in Item No. 4 of DAR AO 05-06 provides,

Section 73. Prohibited Acts and Omissions. – The following are prohibited:

(a) The ownership or possession, for the purpose of circumventing the provisions of this Act, of agricultural lands in
excess of the total retention limits or award ceilings by any person, natural or juridical, except those under collective
ownership by farmer-beneficiaries; xxx

Sections 6 and 70 are clear in stating that any sale and disposition of agricultural lands in violation of the RA No. 6657
shall be null and void. Under the facts of this case, the reasonable reading of these three provisions in relation to the
constitutional right of retention should be that the consequence of nullity pertains to the area/s which were sold, or owned
by the transferee, in excess of the 5-hectare land ceiling. Thus, the CA was correct in declaring that the land is Carriedo’s
retained area.81

Item no. 4 of DAR AO 05-06 attempts to defeat the above reading by providing that, under the principle of estoppel, the
sale of the first five hectares is valid. But, it hastens to add that the first five hectares sold corresponds to the transferor/s’
retained area. Thus, since the sale of the first five hectares is valid, therefore, the landowner loses the five hectares
because it happens to be, at the same time, the retained area limit. In reality, Item No. 4 of DAR AO 05-06 operates as a
forfeiture provision in the guise of estoppel.  It punishes the landowner who sells in excess of five hectares. Forfeitures,
however, partake of a criminal penalty.82

In Perez v. LPG Refillers Association of the Philippines, Inc., 83 this Court said that for an administrative regulation to have
the force of a penal law, (1) the violation of the administrative regulation must be made a crime by the delegating statute
itself; and (2) the penalty for such violation must be provided by the statute itself.84

Sections 6, 70 and 73 (a) of RA No. 6657 clearly do not provide that a sale or disposition of land in excess of 5 hectares
results in a forfeiture of the five hectare retention area. Item no. 4 of DAR AO 05-06 imposes a penalty where none was
provided by law.

As this Court also held in People v. Maceren,85 to wit:

The reason is that the Fisheries law does not expressly prohibit electro fishing. As electro fishing is not banned under the
law, the Secretary of Agriculture and Natural Resources and the Natural Resources and the Commissioner of Fisheries
are powerless to penalize it. In other words, Administrative Order Nos. 84 and 84-1, in penalizing electro fishing, are
devoid of any legal basis.

Had the lawmaking body intended to punish electro fishing, a penal provision to that effect could have been easily
embodied in the old Fisheries Law.86
The repugnancy between the law and Item no. 4 of DAR AO 05-06 is apparent by a simple comparison of their texts. The
conflict undermines the statutorily-guaranteed right of the landowner to choose the land he shall retain, and DAR AO 05-
06, in effect, amends RA No. 6657.

In Romulo, Mabanta, Buenaventura, Sayoc & De Los Angeles  (RMBSA) v. Home Development Mutual
Fund  (HDMF),87 this Court was confronted with the issue of the validity of the amendments to the rules and regulations
implementing PD No. 1752.88 In that case, PD No. 1752 (as amended by RA No. 7742) exempted RMBSA from the Pag-
Ibig Fund coverage for the period January 1 to December 31, 1995. In September 1995, however, the HDMF Board of
Trustees issued a board resolution amending and modifying the rules and regulations implementing RA No. 7742. As
amended, the rules now required that for a company to be entitled to a waiver or suspension of fund coverage, it must
have a plan providing for both provident/retirement and  housing benefits superior to those provided in the Pag-Ibig Fund.
In ruling against the amendment and modification of the rules, this Court held that—

In the present case, when the Board of Trustees of the HDMF required in Section 1, Rule VII of the 1995 Amendments to
the Rules and Regulations Implementing R.A. No. 7742 that employers should have both provident/retirement and
housing benefits for all its employees in order to qualify for exemption from the Fund, it effectively amended Section 19 of
P.D. No. 1752. And when the Board subsequently abolished that exemption through the 1996 Amendments, it repealed
Section 19 of P.D. No. 1752. Such amendment and subsequent repeal of Section 19 are both invalid, as they are not
within the delegated power of the Board. The HDMF cannot, in the exercise of its rule-making power, issue a regulation
not consistent with the law it seeks to apply. Indeed, administrative issuances must not override, supplant or modify the
law, but must remain consistent with the law they intend to carry out. Only Congress can repeal or amend the
law.89 (Citations omitted; underscoring supplied.)

Laws, as well as the issuances promulgated to implement them, enjoy the presumption of validity.90 However,
administrative regulations that alter or amend the statute or enlarge or impair its scope are void, and courts not only may,
but it is their obligation to strike down such regulations.91 Thus, in this case, because Item no. 4 of DAR AO 05-06 is
patently null and void, the presumption of validity cannot be accorded to it. The invalidity of this provision constrains us to
strike it down for being ultra vires.

In Conte v. Commission on Audit,92 the sole issue of whether the Commission on Audit (COA) acted in grave abuse of
discretion when it disallowed in audit therein petitioners' claim of financial assistance under Social Security System (SSS)
Resolution No. 56 was presented before this Court. The COA disallowed the claims because the financial assistance
under the challenged resolution is similar to a separate retirement plan which results in the increase of benefits beyond
what is allowed under existing laws. This Court, sitting en banc, upheld the findings of the COA, and invalidated SSS
Resolution No. 56 for being ultra vires, to wit:

xxx Said Sec. 28 (b) as amended by RA 4968 in no uncertain terms bars the creation of any insurance or retirement plan
— other than the GSIS — for government officers and employees, in order to prevent the undue and [iniquitous]
proliferation of such plans. It is beyond cavil that Res. 56 contravenes the said provision of law and is therefore invalid,
void and of no effect. xxx

We are not unmindful of the laudable purposes for promulgating Res. 56, and the positive results it must have had xxx.
But it is simply beyond dispute that the SSS had no authority to maintain and implement such retirement plan, particularly
in the face of the statutory prohibition. The SSS cannot, in the guise of rule-making, legislate or amend laws or worse,
render them nugatory.

It is doctrinal that in case of conflict between a statute and an administrative order, the former must prevail. A rule or
regulation must conform to and be consistent with the provisions of the enabling statute in order for such rule or regulation
to be valid. The rule-making power of a public administrative body is a delegated legislative power, which it may not use
either to abridge the authority given it by the Congress or the Constitution or to enlarge its power beyond the scope
intended. xxx Though well-settled is the rule that retirement laws are liberally interpreted in favor of the retiree,
nevertheless, there is really nothing to interpret in either RA 4968 or Res. 56, and correspondingly, the absence of any
doubt as to the ultra-vires  nature and illegality of the disputed resolution constrains us to rule against
petitioners.93 (Citations omitted; emphasis and underscoring supplied.)

Administrative regulations must be in harmony with the provisions of the law for administrative regulations cannot extend
the law or amend a legislative enactment.94 Administrative issuances must not override, but must remain consistent with
the law they seek to apply and implement. They are intended to carry out, not to supplant or modify the
law.95 Administrative or executive acts, orders and regulations shall be valid only when they are not contrary to the laws or
the Constitution.96 Administrative regulations issued by a Department Head in conformity with law have the force of
law.97 As he exercises the rule-making power by delegation of the lawmaking body, it is a requisite that he should not
transcend the bounds demarcated by the statute for the exercise of that power; otherwise, he would be improperly
exercising legislative power in his own right and not as a surrogate of the lawmaking body.98

If the implementing rules and regulations are issued in excess of the rule-making authority of the administrative agency,
they are without binding effect upon the courts. At best, the same may be treated as administrative interpretations of the
law and as such, they may be set aside by the Supreme Court in the final determination of what the law means.99

While this Court is mindful of the DAR’s commitment to the implementation of agrarian reform, it must be conceded that
departmental zeal may not be permitted to outrun the authority conferred by statute.100 Neither the high dignity of the office
nor the righteousness of the motive then is an acceptable substitute; otherwise the rule of law becomes a myth.101

As a necessary consequence of the invalidity of Item no. 4 of DAR AO 05-06 for being ultra vires, we hold that Carriedo
did not waive his right to retain the land, nor can he be considered to be in estoppel.

Finally, petitioners cannot argue that the CLOAs allegedly granted in favor of his co-petitioners Corazon and Orlando
cannot be set aside. They claim that CLOAs under RA No. 6657 are enrolled in the Torrens system of registration which
makes them indefeasible as certificates of title issued in registration proceedings.102 Even as these allegedly issued
CLOAs are not in the records, we hold that CLOAs are not equivalent to a Torrens certificate of title, and thus are not
indefeasible.

CLOAs and EPs are similar in nature to a Certificate of Land Transfer (CLT) in ordinary land registration proceedings.
CLTs, and in turn the CLOAs and EPs, are issued merely as preparatory steps for the eventual issuance of a certificate of
title. They do not possess the indefeasibility of certificates of title. Justice Oswald D. Agcaoili, in Property Registration
Decree and Related Laws (Land Titles and Deeds),103 notes, to wit:

Under PD No. 27, beneficiaries arc issued certificates of land transfers (ClTs) to entitle them to possess lands. Thereafter,
they are issued emancipation patents (EPs) after compliance with all necessary conditions. Such EPs, upon their
presentation to the Register of Deeds, shall be the basis for the issuance of the corresponding transfer certificates of title
(TCTs) in favor of the corresponding beneficiaries.

Under RA No. 6657, the procedure has been simplified. Only certificates of land ownership award (CLOAs) are issued, in
lieu of EPs, after compliance with all prerequisites. Upon presentation of the CLOAs to the Register of Deeds, TCTs are
issued to the designated beneficiaries. CLTs are no longer issued.

The issuance of EPs or CLOAs to beneficiaries does not absolutely bar the landowner from retaining the area covered
thereby. Under AO No. 2, series of 1994, an EP or CLOA may be cancelled if the land covered is later found to be part of
the landowner's retained area. (Citations omitted; underscoring supplied.)

The issue, however, involving the issuance, recall or cancellation of EPs or CLOAs, is lodged with the DAR,104 which has
the primary jurisdiction over the matter.105

WHEREFORE, premises considered, the Petition is hereby DENIED for lack of merit. The assailed Decision of the Court
of Appeals dated October 5, 2006 is AFFIRMED. Item no. 4 of DAR Administrative Order No. 05, Series of 2006 is hereby
declared INVALID, VOID and OF NO EFFECT for being ultra vires.

SO ORDERED.

G.R. No. 218666, April 26, 2017

HEIRS OF LEONILO P. NUÑEZ, SR., NAMELY, VALENTINA A. NUÑEZ, FELIX A. NUÑEZ, FELIXITA A. NUÑEZ,
LEONILO A. NUÑEZ, JR., MA. ELIZA A. NUÑEZ, EMMANUEL A. NUÑEZ, ROSE ANNA A. NUÑEZ-DE VERA, AND
MA. DIVINA A. NUÑEZ-SERNADILLA, REPRESENTED BY THEIR CO-HEIR AND ATTORNEY-IN-FACT, ROSE ANNA
A. NUÑEZ-DE VERA, Petitioners, v. HEIRS OF GABINO T. VILLANOZA, REPRESENTED BY BONIFACIO A.
VILLANOZA, Respondents.

DECISION

LEONEN, J.:
Under the Comprehensive Agrarian Reform Law, the landowner may retain a maximum of five (3) hectares of land, but
this land must be compact or contiguous. If the area selected for retention is tenanted, the tenant-farmer may choose to
remain in the area or be a beneficiary in a comparable area.

This is a Petition for Review on Certiorari1 under Rule 45, seeking to reverse the Court of Appeals' September 26, 2014
Decision2 and June 4, 2015 Resolution,3 which affirmed the August 11, 2011 Decision of the Office of the President and
reinstated the February 23, 2005 Order of the Department of Agrarian Reform Regional Director. This case arose from the
proceedings in CA-G.R. SP No. 130544.

Leonilo Sebastian Nuñez (Sebastian) owned a land4 measuring "more or less" 2.833 hectares (28,333 square meters)
located at Barangay Castellano, San Leonardo, Nueva Ecija.5 This land was covered by Transfer Certificate of Title (TCT)
No. NT-1430036 and was registered on March 16, 1976 to "Leonilo Sebastian . . . married to Valentina Averia."7

On July 7, 1976, Sebastian mortgaged this property to then ComSavings Bank or Royal Savings and Loan Association,
now GSIS Family Bank,8 to secure a loan. His loan matured on June 30, 1978, but the bank did nothing to collect the
payment due at that time.9

In 1981, tenant-farmer Gabino T. Villanoza (Villanoza) started tilling Sebastian's land.10

It was only on December 11, 1997, about 19 years after the maturity of Sebastian's loan, that GSIS Family Bank
extrajudicially foreclosed his mortgaged properties including the land tenanted by Villanoza.11 A public auction was held,
and GSIS Family Bank emerged as "the highest and only bidder."12

Sebastian's land title was cancelled and TCT No. NT-271267 was issued in the name of the new owner, GSIS Family
Bank.13

On June 20, 2000, Sebastian filed a complaint before the Regional Trial Court to annul the extrajudicial foreclosure
sale.14 Sebastian argued that an action to foreclose the mortgage prescribed after 10 years. GSIS Family Bank's right of
action accrued on June 30, 1978,15 but it only foreclosed the property 19 years later.16 Thus, its right to foreclose the
property was already barred.17

While the case was pending at the Regional Trial Court, the Department of Agrarian Reform sent a notice of coverage
under Republic Act No. 6657 or the Comprehensive Agrarian Reform Program to GSIS Family Bank, then landowner of
the disputed property.18 Neither GSIS Family Bank nor Sebastian exercised any right of retention within 60 days from this
notice of coverage.

On November 10, 2000, the government compulsorily acquired from GSIS Family Bank the land covered by TCT No. NT-
271267. The bank's land title was cancelled, and TCT No. NT-276395 was issued in the name of the Republic of the
Philippines. The Department of Agrarian Reform put a portion of what is now TCT No. NT-276395 under agrarian reform.19

On November 27, 2000, the Department of Agrarian Reform issued an emancipation patent or Certificate of Land
Ownership Award (CLOA No. 00554664) to Villanoza.20 The Certificate of Land Ownership Award title was generated but
not yet released as of February 23, 2005.21

During the pendency of his complaint to annul the extrajudicial foreclosure sale, Sebastian died and his heirs, namely:
Valentina A. Nuñez, Felix A. Nuñez, Felixita A. Nuñez, Leonilo A. Nuñez, Jr., Eliza A. Nuñez, Emmanuel A. Nuñez, and
Divina A. Nuñez, substituted him.22

On August 9, 2002, the Regional Trial Court found that GSIS Family Bank's cause of action had prescribed.23 "[T]herefore,
the proceedings for extrajudicial foreclosure of real estate mortgages [against Sebastian, as substituted by his
heirs,]24 were null and void."25 GSIS Family Bank appealed the case before the Court of Appeals.26

On March 1, 2004, some of herein petitioners Leonilo A. Nuñez, Jr., Ma. Eliza A. Nuñez, Emmanuel A. Nuñez, Rose Anna
Nuñez-De Vera, and Ma. Divina Nuñez-Sernadilla, represented by attorney-in-fact Ma. Eliza A. Nuñez (petitioners),
submitted a Sworn Application for Retention (Application for Retention). Their Application for Retention was made
pursuant to Republic Act No. 6657 and filed before the Department of Agrarian Reform, naming "Leonilo P. Nu[ñ]ez"
(Nuñez, Sr.), instead of Sebastian, as the registered owner of the land.27 It was filed almost four (4) years after the
Department of Agrarian Reform issued a notice of coverage over the same property.28

Petitioners applied to retain this land29 although the stated name of their predecessor-in-interest "Leonilo Sebastian," as
found in TCT No. NT-14300330 or "Leonilo Sebastian Nuñez" as found in Nuñez v. GSIS Family Bank, was different from
"Leonilo P. Nuñez" as found in the Sworn Application for Retention.31
In the Order dated September 2, 2004, the Department of Agrarian Reform Region III Director Narciso B. Nieto (Regional
Director Nieto) denied petitioners' Application for Retention and ordered the release of Certificate of Land Ownership
Award in favor of Villanoza. Regional Director Nieto ruled that petitioners were not entitled to retain the land under
Republic Act No. 6657, as their predecessor-in-interest was not qualified under Presidential Decree No. 27.32 Thus, his
heirs could not avail themselves of a right which he himself did not have.33

The dispositive portion of the Department of Agrarian Reform Regional Office's September 2, 2004 Order read:

WHEREFORE, premises considered, an ORDER is hereby issued:

1. DENYING the application for retention filed by the heirs of the late Leonilo S. Nu[ñ]ez, Sr., as represented by their
co-heir/attorney-in-fact, Ma. Eliza A. Nu[ñ]ez, involving the 4.9598 hectares, embraced by TCT Nos. NT-143003;
P-8537; and P-9540, situated at Barangay Castellano, San Leonardo, Nueva Ecija, for lack of merit;

2. DIRECTING the DAR personnel concerned to acquire the rest of the landholdings and distribute the same to
qualified beneficiaries pursuant to existing DAR policies, rules and regulations; and

3. ORDERING the DAR personnel concerned to issue and release TCT CLOA-CA-19771 with CLOA No. 00554664
covering the 28,833 square meters, more or less, in favor of Gabino T. Villanoza.

SO ORDERED.34
On September 23, 2004, petitioners filed a Motion for Reconsideration.35

Meanwhile, Villanoza registered his Certificate of Land Ownership Award title under the Torrens system.36 On November
24, 2004, the Certificate of Land Ownership Award title was cancelled and a new regular title, TCT No. NT-299755, was
issued in his name.37

On February 23, 2005, Regional Director Nieto partially modified his September 2, 2004 Order.38 He held that petitioners
were entitled to a retention area of not more than five (5) hectares from the total landholdings, but they could not retain the
property covered under TCT No. NT-143003 (now TCT No. NT-299755) as it was neither compact nor
contiguous.39 Petitioners were ordered to choose their retained area from the other lots of their predecessor-in-interest.

The dispositive portion of Regional Director Nieto's reconsidered Order40 dated February 23, 2005 read:

WHEREFORE, premises considered, the ORDER, dated September 2, 2004, issued by this Office in the above case is
hereby RECONSIDERED, and is accordingly modified, as follows:

1. GRANTING the heirs of the late Leonilo P. Nu[ñ]ez, St., as represented by their co-heir/attorney-in-fact,
Ma. Eliza A. Nu[ñ]ez, to retain five (5) hectares of their landholdings at Barangay Castellano, San
Leonardo, Nueva Ecija, provided the same must be compact, contiguous[,] and least prejudicial to the
tenants therein pursuant to RA No. 6657, as amended;

2. MAINTAINING the tenants affected in the retained area as lessees pursuant to RA No. 3844;

3. DIRECTING the DAR personnel concerned to acquire the rest of the landholdings and distribute the same
to qualified beneficiaries pursuant to existing DAR policies, rules and regulations; and

4. ORDERING the DAR personnel concerned to issue and release TCT-CA-19771 with CLOA No.
00554664 covering the 28,833 square meters, more or less, in favor of Gabino T. Villanoza.

SO ORDERED.41 (Emphasis in the original)

On March 21, 2005, petitioners appealed the February 23, 2005 Regional Director Order before the Office of Department
of Agrarian Reform Secretary Nasser C. Pangandaman (Secretary Pangandaman).42

In the meantime, this Court reversed the ruling of the Court of Appeals and reinstated that of the Regional Trial Court on
November 17, 2005 in Nuñez v. GSIS Family Bank.43 It held that GSIS Family Bank's foreclosure of Sebastian's mortgage
was null and void and that his heirs were the rightful owners of the property.44 The heirs, however, did not move to
execute this Decision.45
As for the Application for Retention, Secretary Pangandaman directed the cancellation of Villanoza's Certificate of Land
Ownership Award title in the Order dated August 8, 2007.46 According to him, Section 6 of Republic Act No. 6657 "[did] not
require that the landholding (sought to be retained) should always be compact and contiguous,"47 particularly so if it
involved "small landownership of bits and pieces in hectarage."48 The dispositive portion of Secretary Pangandaman's
August 8, 2007 Order read:

WHEREFORE, premises considered, the instant Appeal is hereby GRANTED. Accordingly, the Order dated 23 February
2005 issued by the Regional Director of DAR Regional Office-Ill is hereby REVERSED and SET ASIDE. Thus, a new
Order is hereby issued to read as follows:

1. GRANTING the landowners, herein applicants-appellants, the five (5) hectares as their
retention area;

2. DIRECTING the [Provincial Agrarian Reform Officer], [Municipal Agrarian Reform Officer],
or landowner concerned to initiate the cancellation of the CLOA No. 00554664 issued to GA[B]INO T.
VILLANOZA;

3. GRANTING the tenant to exercise the option whether to remain in the retained area as a
leaseholder or be a beneficiary in another agricultural land with similar comparable features, the choice of one
forfeits the other option; and

4. DIRECTING the [Municipal Agrarian Reform Officer] concerned to assist the parties in the
execution of the Leasehold Agreement, if warranted.

SO ORDERED.49
On September 6, 2007, Villanoza filed a Motion for Reconsideration (Villanoza's Motion for Reconsideration).50 He argued
that the title issued to him was already indefeasible and the land it covered was "not compact and contiguous."51

On April 25, 2008, Villanoza died52 and his heirs substituted him.53

On December 10, 2008, Secretary Pangandaman resolved to deny Villanoza's Motion for Reconsideration.54

Respondents heirs of Villanoza appealed before the Office of the President,55 which ruled56 in their favor on August 11,
2011. Interpreting Section 6 of Republic Act No. 6657, it held that the land sought to be retained "must be compact and
contiguous,"57 contrary to the view of the Department of Agrarian Reform in its August 8, 2007 Order. Section 6 of
Republic Act No. 6657 gives the landowners the right to retain58 up to five (5) hectares59 of land covered by the
Comprehensive Agrarian Reform Program.

According to the Office of the President, the proceedings before Regional Director Nieto established that petitioners had
other landholdings which, taken together, exceeded the five (5)-hectare retention limit allowed by law. Likewise, it held
that Villanoza's title had become "irrevocable and indefeasible."60

The dispositive portion of the Office of the President Decision dated August 11, 2011 read:

WHEREFORE, PREMISES CONSIDERED, the appealed Orders dated August 8, 2007 and December 10, 2008 of the-
Honorable Secretary Nasser C. Pangandaman, Department of Agrarian Reform (DAR), are hereby REVERSED and SET
ASIDE. The Order dated February 23, 2005 rendered by the Regional Director of DAR Region III is hereby reinstated.

SO ORDERED.61
Petitioners moved for reconsideration,62 which the Office of the President denied in its Order dated May 30, 2013.63

In the Decision dated September 26, 2014, the Court of Appeals likewise denied64 the appeal for lack of merit. It held that
the Department of Agrarian Reform should have rejected petitioners' Application for Retention outright as petitioners failed
to prove that Sebastian intended to make the land, measuring more or less 2.833 hectares and now titled in Villanoza's
favor, a part of his retained holdings.65

Neither the heirs of Sebastian may invoke this right. Citing Administrative Order No. 02-03, Section 3.3,66 the Court of
Appeals held that petitioners could only exercise the retention right had Sebastian himself manifested before August 23,
1990 that he wished to exercise this right. August 23, 1990 was the day when this Court's ruling in Association of Small
Landowners in the Philippines vs. Honorable Secretary of Agrarian Reform 67 became final.68 Administrative Order No. 02-
03 was issued pursuant to Association of Small Landowners in the Philippines, Presidential Decree No. 27, and Section 6
of Republic Act No. 6657.69

The Court of Appeals added that the ruling in Nuñez v. GSIS Family Bank could not apply to the parties here. That case
pertained to the claim of "Leonilo Sebastian Nuñez" while this case pertains to the claim of petitioners over the same lot
but in their capacities as heirs of "Leonilo P. Nuñez, Sr."70 Petitioners failed to present any evidence that "Leonilo P.
Nuñez, Sr." and "Leonilo Sebastian Nuñez" were the same person.71

Even assuming that they referred to only one person, the Court of Appeals questioned petitioners' failure to push for the
execution of this Court's Decision in Nuñez v. GSIS Family Bank. That ruling was promulgated on November 17, 2005,
but as of September 26, 2014, there was no information yet as to the status of the decision in that case.72 The Court of
Appeals held that petitioners were barred by laches for failing to protect their rights for an unreasonable length of time or
for nine (9) long years.73

The dispositive portion of the Decision dated September 26, 2014 read:

WHEREFORE, premises considered, the petition for review is DENIED for lack of merit. The Decision dated August 11,
2011 and Order dated May 30, 2013 issued by the Office of the President in O.P. Case No. 09-A-022
is AFFIRMED insofar as it reinstated the February 23, 2005 Order of the DAR Regional Director confirming the title issued
in favor of Gabino T. Villanoza.

SO ORDERED.74 (Emphases in the original)

In their Motion for Reconsideration, petitioners posited that Nuñez, Sr. did not receive a notice of Comprehensive Agrarian
Reform Program coverage from the Department of Agrarian Reform; thus, he could not be deemed to have waived his
right to retain the property.75 They also submitted, for the first time, photocopies of Nuñez, Sr.'s Certificate of
Baptism76 and the Affidavit of Nuñez, Sr.'s mother, Teofila Patiag vda. de Nuñez (Teofila), dated September 14, 1959.77

According to the baptismal certificate, "Leonilo S. Nuñez" was the son of Teofila Patiag and Felix Nuñez.78 Meanwhile,
Teofila's Affidavit stated that "Leonilo Sebastian Nu[ñ]ez" and "Leonilo P. Nu[ñ]ez" referred to "one and the same person
only."79 The Affidavit was allegedly an ancient document which the Court of Appeals could consider in
evidence.80 Therefore, petitioners argued, this Court's ruling in Nuñez v. GSIS Family Bank had become immutable and
unalterable in their favor.81

In its Resolution82 dated June 4, 2015, the Court of Appeals denied petitioners' Motion for Reconsideration, which
petitioners appealed before this Court.

On April 6, 2016, this Court83 required the respondents to comment. In their Comment84 dated July 5, 2016, respondents
pointed out the absence of any evidence on record to show that "Leonilo Sebastian Nuñez" and "Leonilo P. Nuñez" were
the same person.85 They also objected to the petitioners' belated presentation of new pieces of evidence in a motion for
reconsideration before the Court of Appeals.86

They added that, in the eyes of the law, GSIS Family Bank was the landowner when the government compulsorily
acquired the property.87 However, GSIS Family Bank did not exercise its retention right within 60 days from receipt of the
notice of coverage.88

When this Court promulgated Nuñez v. GSIS Family Bank, the land was already distributed to tenant-farmer
Villanoza.89 Meanwhile, this Court's decision was never executed against GSIS Family Bank.90

For resolution are the following issues:

First, whether the Court of Appeals properly exercised its appellate jurisdiction;

Second, whether Nuñez v. GSIS Family Bank binds respondents; and

Finally, whether petitioners have a right of retention over the land measuring "more or less" 2.833 hectares awarded to
farmer beneficiary Gabino T. Villanoza.

The Comprehensive Agrarian Reform Program, signed into law by then President Corazon C. Aquino on June 10, 1988, is
the government initiative to comply with the constitutional directive to grant ownership of agricultural lands to landless
farmers, agricultural lessees, and farmworkers.91 As of December 31, 2013, about 6.9 million hectares of land, or 88% of
the total land subject to agrarian reform, has been acquired and distributed by the government.92
To understand the context of the issue relating to a retention right, this Court reviews the history of the agrarian reform
program.

Prior to any colonization, various ethnolinguistic cultures had their own customary laws governing their property
relationships. The arrival of the Spanish introduced the concept of encomienda, or royal land grants,93 to loyal Spanish
subjects, particularly the soldiers.94 Under King Philip II's decree, the encomienderos or landowners were tasked "to
maintain peace and order" within their encomiendas, to protect the large estates from external attacks, and to support the
missionaries in converting the natives into Christians.95 In turn, the encomienderos had the right to collect tributes or taxes
such as gold, pearls, cotton cloth,96 chickens, and rice97 from the natives called indios.98 The encomienda system helped
Hispanicize the natives and extended Spanish colonial rule by pacifying the early Filipinos within the estates.99

There were three (3) kinds of encomiendas: the royal encomiendas, which belonged to the King; the ecclesiastical
encomiendas, which belonged to the Church; and the private encomiendas, which belonged to private individuals. The
local elites were exempted from tribute-paying and labor, or polo services,100 required of the natives.

The encomienda system was abused by the encomienderos.101 Filipinos were made to pay tribute more than what the law
required. Their animals and crops were taken without just compensation, and they were forced to work for the
encomienderos.102

Thus, the indios, who once freely cultivated the lands, became mere share tenants103 or dependent sharecroppers of the
colonial landowners.104

In the 1899 Malolos Constitution and true to one (1) of the principal concerns of the Philippine Revolution, then President
General Emilio Aguinaldo declared "his intention to confiscate large estates, especially the so-called [f]riar
lands."105 Unfortunately, the First Philippine Republic did not last long.

The encomienda system was a vital source of revenue and information on the natives for the Spanish crown.106 In the first
half of the 19th century, the cash crop economy emerged after the Philippines integrated into the world
market,107 increasing along with it the powers of the local elites, called principalias, and landlords.108

The United States arrived later as the new colonizer. It enacted the Philippine Bill of 1902, which limited land area
acquisitions into 16 hectares for private individuals and 1,024 hectares for corporations.109 The Land Registration Act of
1902 (Act No. 496) established a comprehensive registration of land titles called the Torrens system.110 This resulted in
several ancestral lands being titled in the names of the settlers.111

The Philippines witnessed peasant uprisings including the Sakdalista movement in the 1930's.112 During World War II,
peasants and workers organizations took up arms and many identified themselves with the Hukbalahap, or Hukbo ng
Bayan Laban sa Hapon.113 After the Philippine Independence in 1946, the problems of land tenure remained and
worsened in some parts of the country.114 The Hukbalahaps continued the peasant uprisings in the 1950s.115

To address the farmers' unrest, the government began initiating various land reform programs, roughly divided into three
(3) stages.

The first stage was the share tenancy system under then President Ramon Magsaysay (1953-1957).116 In a share tenancy
agreement, the landholder provided the land while the tenant provided the labor for agricultural production.117 The produce
would then be divided between the parties in proportion to their respective contributions.118 On August 30, 1954, Congress
passed Republic Act No. 1199 (Agricultural Tenancy Act), ensuring the "equitable division of the produce and [the] income
derived from the land[.]"119

Compulsory land registration was also established under the Magsaysay Administration. Republic Act No. 1400 (Land
Reform Act) granted the Land Tenure Administration the power to purchase or expropriate large tenanted rice and corn
lands for resale to bona fide tenants or occupants who owned less than six (6) hectares of land.120 However, Section 6(2)
of Republic Act No. 1400 set unreasonable retention limits at 300 hectares for individuals and 600 hectares for
corporations,121 rendering President Magsaysay's efforts to redistribute lands futile.

On August 8, 1963, Congress enacted Republic Act No. 3844 (Agricultural Land Reform Code) and abolished the share
tenancy system,122 declaring it to be against public policy. The second stage of land reform, the agricultural leasehold
system, thus began under President Diosdado Macapagal (1961-1965).

Under the agricultural leasehold system, the landowner, lessor, usufructuary, or legal possessor furnished his or her
landholding, while another person cultivated it123 until the leasehold relation was extinguished.124 The landowner had the
right to collect lease rental from the agricultural lessee,125 while the lessee had the right to a homelot126 and to be
indemnified for his or her labor if the property was surrendered to the landowner or if the lessee was ejected from the
landholding.127

Republic Act No. 3844 also sought to provide economic family-sized farms to landless citizens of the Philippines
especially to qualified farmers.128 The landowners were allowed to retain as much as 75 hectares of their landholdings.
Those lands in excess of 75 hectares could be expropriated by the government.129

The system finally transitioned from agricultural leasehold to one of full ownership under President Ferdinand E. Marcos
(1965-1986). On September 10, 1971, Congress enacted Republic Act No. 6389 or the Code of Agrarian Reform.

Republic Act No. 6389 automatically converted share tenancy into agricultural leasehold.130 It also established the
Department of Agrarian Reform as the implementing agency for the government's agrarian reform program.131 Presidential
Decree No. 2 proclaimed the whole country as a land reform area.132

On October 21, 1972, Presidential Decree No. 27, or the Tenants Emancipation Decree, superseded Republic Act No.
3844. Seeking to "emancipat[e] the tiller of the soil from his bondage,"133 Presidential Decree No. 27 mandated the
compulsory acquisition of private lands to be distributed to tenant-farmers. From 75 hectares under Republic Act No.
3844, Presidential Decree No. 27 reduced the landowner's retention area to a maximum of seven (7) hectares of land.

Presidential Decree No. 27 implemented the Operation Land Transfer Program to cover tenanted rice or corn lands.
According to Daez v. Court of Appeals,134 "the requisites for coverage under the [Operation Land Transfer] program are
the following: (1) the land must be devoted to rice or corn crops; and (2) there must be a system of share-crop or lease-
tenancy obtaining therein."135

Therefore, the land for acquisition and distribution must be planted with rice or corn and must be tenanted under a share
tenancy or an agricultural leasehold agreement.136 The landowner would not enjoy the right to retain land if his or her
entire landholding was intact and undisturbed.137

On the other hand, if a land was subjected to compulsory land reform under the Operation Land Transfer program, the
landowner, who cultivated this land, or intended to cultivate an area of the tenanted rice or corn land, had the right to
retain an area of not more than seven (7) hectares.138

On October 21, 1976, Letter of Instruction No. 474 further amended the rule. If the landowner owned an aggregate area of
more than seven (7) hectares of other agricultural lands, he or she could no longer exercise any right of retention. Letter
of Instruction No. 474 states:

1. You shall undertake to place under the Land Transfer Program of the government pursuant to Presidential Decree No.
27, all tenanted rice/corn lands with areas of seven hectares or less belonging to 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.
Heirs of Aurelio Reyes v. Garilao139 affirmed that the landowner's retention right was restricted by the conditions set forth
in Letter of Instruction No. 474.140 In Heirs of Sandueta v. Robles,141 this Court denied the landowner's application for
retention as it fell under the first disqualifying condition of Letter of Instruction No. 474: the landowner's total area was
14.0910 hectares, twice the seven (7)-hectare limit for retention.142

In Vales v. Galinato:143
[B]y virtue of [Letter of Instruction No.] 474, if the landowner, as of October 21, 1976, owned less than 24 [hectares] of
tenanted rice or corn lands, but additionally owned (a) other agricultural lands of more than 7 [hectares], whether tenanted
or not, whether cultivated or not, and regardless of the income derived therefrom, or (b) lands used for residential,
commercial, industrial or other urban purposes, from which he [or she] derives adequate income to support himself [or
herself] and his [or her] family, his [or her] entire landholdings shall be similarly placed under [Operation Land Transfer]
Program coverage, without any right of retention.144

Following the People Power Revolution, then President Corazon C. Aquino (1986-1992) fulfilled the promise of land
ownership for the tenant-farmers. Proclamation No. 131 instituted the Comprehensive Agrarian Reform Program.
Executive Order No. 129 (1987) reorganized the Department of Agrarian Reform and expanded it in power and operation.
Executive Order No. 228 (1987) declared the full ownership of the land to qualified farmer beneficiaries under Presidential
Decree No. 27.

Likewise, the 1987 Constitution, which was promulgated during President Corazon C. Aquino's term, enshrines the
promotion of rural development and agrarian reform.145 To balance the interests of landowners and tenants, Article XIII,
Section 4 of the Constitution also recognizes the landowner's retention right, as may be prescribed by law.

Section 4. The State shall, by law, undertake an agrarian reform program founded on the right of farmers and regular
farmworkers, who are landless, to own directly or collectively the lands they till or, in the case of other farmworkers, to
receive a just share of the fruits thereof. To this end, the State shall encourage and undertake the just distribution of all
agricultural lands, subject to such priorities and reasonable retention limits as the Congress may prescribe, taking into
account ecological, developmental, or equity considerations, and subject to the payment of just compensation. In
determining retention limits, the State shall respect the right of small landowners. The State shall further provide
incentives for voluntary land-sharing. (Emphasis supplied)
On June 10, 1988, Congress enacted Republic Act No. 6657,146 otherwise known as the Comprehensive Agrarian Reform
Law, to supersede Presidential Decree No. 27.

The compulsory land acquisition scheme under Republic Act No. 6657 empowers the government to acquire private
agricultural lands147 for distribution to tenant-farmers.148 A qualified farmer beneficiary is given an emancipation
patent,149 called the Certificate of Land Ownership Award,150 which serves as conclusive proof of his or her ownership of
the land.151

To mitigate the effects of compulsory land acquisition,152 Section 6 of Republic Act No. 6657 allows the landowners the
right to retain up to five (5) hectares of land covered by the Comprehensive Agrarian Reform Program, thus:

Section 6. Retention Limits. —

....

The right to choose the area to be retained, which shall be compact or contiguous, shall pertain to the
landowner: Provided, however, That in case the area selected for retention by the landowner is tenanted, the tenant shall
have the option to choose whether to remain therein or be a beneficiary in the same or another agricultural land with
similar or comparable features...
On July 14, 1989, this Court promulgated Association of Small Land Owners in the Philippines v. Secretary of Agrarian
Reform,153 acknowledging that the landowner, whose property was subject to compulsory land reform, might opt to retain
land under Section 6 of Republic Act No. 6657.

On August 30, 2000, pursuant to Presidential Decree No. 27, Section 6 of Republic Act No. 6657 and this Court's ruling
in Association of Small Land Owners in the Philippines, the Department of Agrarian Reform issued Administrative Order
No. 05-00 to provide implementing rules on the landowner's retention right.154

Section 9(a) of Administrative Order No. 05-00 states that the retention limit for landowners covered by Presidential
Decree No. 27 is "seven (7) hectares, except those whose entire tenanted rice and corn lands are subject of acquisition
and distribution under [Operation Land Transfer]." Section 9(a) further states that a landowner may not exercise his or her
retention right under the following conditions:

1. If [the landowner], as of 21 October 1972, owned more than twenty- four (24) hectares of tenanted rice and corn
lands; or

2. By virtue of Letter of Instruction (LOI) No. 474, if [the landowner], as of 21 October 1972, owned less than twenty-
four (24) hectares of tenanted rice and corn lands but additionally owned the following:
i. other agricultural lands of more than seven (7) hectares, whether tenanted or not, whether cultivated or
not, and regardless of the income derived therefrom; or

ii. lands used for residential, commercial, industrial or other urban purposes from which he derives adequate
income to support himself [or herself] and his [or her] family.

On January 16, 2003, the Department of Agrarian Reform issued Administrative Order No. 02-03 to further clarify the
rules governing the landowner's retention right.155

Section 4.1 of Administrative Order No. 02-03 gives the landowner the option to exercise the right of retention at any time
before he or she receives a notice of Comprehensive Agrarian Reform Program coverage.156

The right to choose the area to be retained belongs to the landowner, subject to the condition that the area must be (a) a
"private agricultural land"157 that is (b) compact and contiguous, and (c) "least prejudicial to the entire landholding and the
majority of the farmers" of that land.158

Landowners who voluntarily sold or transferred their land must have exercised the right of retention simultaneous with the
offer for sale or transfer.159 If the land was compulsorily acquired by the government, the right of retention must have been
exercised "within sixty (60) days from receipt of notice of coverage."160

Section 7 of Administrative Order No. 02-03 provides that the landowner seeking to exercise his or her retention right
must submit an affidavit stating "the aggregate area of his [or her] landholding in the entire Philippines" and "the names of
all farmers . . . actual tillers or occupants, and/or other persons directly working on the land," thus:

SECTION 7. Criteria/Requirements for Award of Retention — The following are the criteria in the grant of retention area to
landowners:

7.1. The land is private agricultural land;

7.2. The area chosen for retention shall be compact and contiguous and shall be least prejudicial to the entire landholding
and the majority of the farmers therein;

7.3. The landowner must execute an affidavit as to the aggregate area of his landholding in the entire Philippines; and

7.4. The landowner must submit a list of his children who are fifteen (15) years old or over as of 15 June 1988 and who
have been actually cultivating or directly managing the farm since 15 June 1988 for identification as preferred
beneficiaries, as well as evidence of such.

7.5. The landowner must execute an affidavit stating the names of all farmers, agricultural lessees and share tenants,
regular farmworkers, seasonal farmworkers, other farmworkers, actual tillers or occupants, and/or other persons directly
working on the land; if there are no such persons, a sworn statement attesting to such fact.
If the area selected by the landowner for retention is tenanted, "the tenant shall have the option to choose whether to
remain ... as lessee or be a beneficiary in the same or another agricultural land with similar or comparable features."
Section 9 of Administrative Order 02-03 states that the tenant must exercise this option within one (1) year from the time
the landowner manifests his or her choice of the area for retention, as follows:

SECTION 9. When Retained Area is tenanted

9.1. In case the area selected by the landowner or awarded for retention by the [Department of Agrarian Reform] is
tenanted, the tenant shall have the option to choose whether to remain therein as lessee or be a beneficiary in the same
or another agricultural land with similar or comparable features.

9.3. The tenant must exercise his option within one (1) year from the time the landowner manifests his choice of the area
for retention, or from the time the [Municipal Agrarian Reform Office] has chosen the area to be retained by the
landowner, or from the time an order is issued granting the retention.
If the landowner fails to manifest an intention to exercise the right to retain within 60 calendar days after receiving the
Comprehensive Agrarian Reform Program coverage, he or she is considered to have waived the right of retention as
explained in Section 2.2 of Administrative Order No. 02-03:

2.2. The landowner shall exercise the right to retain by signifying his intention to retain within sixty (60) days from receipt
of notice of coverage. Failure to do so within the period shall constitute a waiver of the right to retain any area.
On August 7, 2009, Republic Act No. 9700 or the Comprehensive Agrarian Reform Program Extension with Reforms was
enacted to strengthen the comprehensive agrarian reform program and to extend the acquisition and distribution of all
agricultural lands.

The rules on the retention right have remained the same.

The Court of Appeals properly exercised its jurisdiction in finding that "Leonilo P. Nuñez, Sr." was different from "Leonilo
Sebastian Nuñez." Contrary to petitioners' allegations,161 the Court of Appeals could not be estopped simply because the
issue was never raised before the Department of Agrarian Reform. In the exercise of its appellate jurisdiction, the Court of
Appeals is empowered to have an independent finding of fact or adopt those set forth in the decision appealed
from.162 This is true especially when the factual finding on the matter contradicts the evidence on record.

Asian Terminals, Inc. v. Simon Enterprises, Inc.163 has held that even this Court, which generally reviews questions of law,
may review questions of facts when the judgment is based on a misapprehension of facts.164 This Court may likewise do
so when there is no citation of specific evidence on which the factual findings are based or when the relevant and
undisputed facts have been manifestly overlooked which, if properly considered, would justify a different
conclusion.165 This gives all the more reason for the Court of Appeals to review questions of facts and law. In Garcia v.
Ferro Chemicals, Inc.,166 this Court has also held that a matter not raised by the parties may be reviewed if "necessary for
a complete resolution of the case."167

II

This Court cannot apply Nuñez v. GSIS Family Bank in petitioners' favor or to respondents' prejudice.

First, neither Villanoza nor his heirs were impleaded in that case. Villanoza and his heirs were non-parties to the mortgage
and did not participate in the proceedings for foreclosure and annulment of foreclosure of mortgage. No person can be
affected by any proceeding to which he or she is a stranger. Being complete strangers in that case, respondents are not
bound by the judgment rendered by this Court.

Second, the Court of Appeals properly found that petitioners did not furnish timely and sufficient evidence to prove that
"Leonilo P. Nuñez, Sr." was also "Leonilo Sebastian Nuñez."

The new pieces of evidence that petitioners attached are inadmissible. Cansino v. Court of Appeals168 has held that "a
motion for reconsideration cannot be used as a vehicle to introduce new evidence."169 The belated introduction of these
documents in a motion for reconsideration before the Court of Appeals violates respondents' right to contest the new
evidence presented.170

Moreover, the Certificate of Baptism and Teofila's Affidavit are "mere photocopies."171 Petitioners failed to present the
original or certified true copies of these documents. Rule 130, Section 3 of the Rules of Court states that "[w]hen the
subject of inquiry is the contents of a document, no evidence shall be admissible other than the original document itself[.]"

The due execution and authenticity of the baptismal certificate, being a private document,172 were also not established.
Under Section 20 of Rule 132 of the Rules of Court:

Section 20. Proof of private document. — Before any private document offered as authentic is received in evidence, its
due execution and authenticity must be proved either:

a. By anyone who saw the document executed or written; or

b. By evidence of the genuineness of the signature or handwriting of the maker.

Any other private document need only be identified as that which it is claimed to be. (Emphasis supplied)
Petitioners did not comply Rule 132, Section 20 of the Rules of Court. Likewise, the photocopy of Teofila's Affidavit may
not be considered an ancient document under Rule 132, Section 21 of the Rules of Court as follows:

Section 21. When evidence of authenticity of private document not necessary. — Where a private document is more than
thirty years old, is produced from the custody in which it would naturally be found if genuine, and is unblemished by any
alterations or circumstances of suspicion, no other evidence of its authenticity need be given.
A copy purporting to be an ancient document may be admitted in evidence if it bears a certification from the proper
government office where the document is naturally found genuine that the document is the exact copy of the original on
file.173 Here, the photocopied Affidavit of Teofila does not carry such certification from the notary public or the Register of
Notaries Public, among others.174 Petitioners have not shown that the Affidavit of Teofila is free from suspicion and
unblemished by alterations.

Even assuming that "Leonilo P. Nuñez, Sr." is also "Leonilo Sebastian," the Court of Appeals correctly ruled that
petitioners' non-execution of this Court's Decision in Nuñez v. GSIS Family Bank constituted an abandonment of their
rights. The Court of Appeals considered this Court's judgment in that case, which was never executed for almost 10
years,175 a hollow victory. According to the Court of Appeals, "if [petitioners] truly believe that said decision will entitle them
to get back the subject property,"176 then they had every reason to have quickly taken steps to enforce the judgment in
their favor.

The Office of the President ruled similarly, thus:

Clear from the records ... is the fact that [petitioners] are not the owners of the subject property when the same was
placed under the Comprehensive Agrarian Reform Program (CARP) of the government through the Department of
Agrarian Reform. The existence of a Court decision finding them to be the rightful owner[s] without the decision having
been executed . . . renders the decision inutile and becomes an empty victory for the prevailing part[ies].177 (Citations
omitted)
Cormero v. Court of Appeals178 has established that the failure to assert one's right for an unreasonable amount of time
leads to the presumption that he or she has abandoned this right. The Court of Appeals properly held that petitioners were
barred by laches for failing to protect their rights for at least nine (9) years, which was an "unreasonable length of time."179

In their defense, petitioners aver that they sought for the execution of Nuñez v. GSIS Family Bank, only that the sheriff did
not implement it.180 However, they did not show any evidence to prove their claim. "Bare allegations, unsubstantiated by
evidence, are not equivalent to proof."181 The one alleging a fact has the burden of proving it.182

III

Finally, assuming that Sebastian could properly exercise his retention right, this could not cover the land awarded to
Villanoza.

Petitioners cite Santiago, et al. v. Ortiz-Luiz183 to claim that an emancipation grant cannot "defeat the right of the heirs of
the deceased landowner to retain the [land]."184 However, in that case, this Court denied the landowner's retention right for
exceeding what the law provides.185 There is no cogent reason why this Court should rule differently in this case.

Section 6 of Republic Act No. 6657186 gives the landowner the option to choose the area to be retained only if it is compact
or contiguous. The Department of Agrarian Reform, the Office of the President, and the Court of Appeals have
consistently found that the land subject of the dispute is neither compact nor contiguous.

Section 6 also provides that if the area selected for retention is tenanted, it is for the tenant to choose whether to remain in
the area or be a beneficiary in the same or a comparable agricultural land.187 Petitioners' Application for Retention stated
that Villanoza occupied the property as a tenant and farmer beneficiary.188 Thus, the option to remain in the same land
was for Villanoza to make.

The landowner's retention right is subject to another condition. Under Section 3.3 of Administrative Order No. 02-03, the
heirs of a deceased landowner may exercise the retention right only if the landowner signified his or her intention to
exercise the right of retention before August 23, 1990.189 Section 3.3 states:
3.3. The right of retention of a deceased landowner may be exercised by his heirs provided that the heirs must first
show proof that the decedent landowner had manifested during his lifetime his intention to exercise his right of
retention prior to 23 August 1990 (finality of the Supreme Court ruling in the case of Association of Small
Landowners in the Philippines Incorporated versus the Honorable Secretary of Agrarian Reform).
Petitioners cannot claim the right of retention through "Leonilo Sebastian" or "Leonilo P. Nuñez, Sr." when the alleged
predecessor-in-interest himself failed to do so. The Court of Appeals correctly ruled that during his lifetime, Sebastian did
nothing to signify his intent to retain the property being tilled by Villanoza. It was only two (2) years after his death that
petitioners started to take interest over it.190

Neither was any right of retention exercised within 60 days from the notice of Comprehensive Agrarian Reform Program
coverage. The Court of Appeals properly considered this as a waiver of the right of retention,191 pursuant to Section 6.1 of
Administrative Order No. 02-03.

Section 6.1 provides that the landowner's "[f]ailure to manifest an intention to exercise his right to retain within sixty (60)
calendar days from receipt of notice of CARP coverage" is a ground for losing his or her right of retention.

The Department of Agrarian Reform sent a notice of Comprehensive Agrarian Reform Program coverage to GSIS Family
Bank, which was then landowner of the disputed property.192 Neither GSIS Family Bank nor Sebastian exercised any right
of retention within 60 days from this notice of coverage.

In Vda. De Dayao v. Heirs of Robles,193 this Court has held that the Department of Agrarian Reform "has no authority to
decree a retention when no application was in the first place ever filed."194

Petitioners themselves admit that the Department of Agrarian Reform sent a notice of coverage to GSIS Family
Bank.195 During this time, no application was ever filed by GSIS Family Bank or petitioners. The same land, which the
Republic of the Philippines subsequently acquired, was awarded to Villanoza.

While all agrarian reform programs have always accommodated some forms of retention for the landowner, all rights of
retention have always been subject to conditions. Unfortunately in this case, the landowner has miserably failed to invoke
his right at the right time and in the right moment. The farmer beneficiary should not, in equity, be made to suffer the
landowner's negligence.

Finally, the issuance of the title to Villanoza could no longer be revoked or set aside by Secretary
Pangandaman.196 Acquiring the lot in good faith, Villanoza registered his Certificate of Land Ownership Award title under
the Torrens system.197 He was issued a new and regular title, TCT No. NT-299755, in fee simple;198 that is to say, it is an
absolute title, without qualification or restriction.

Estribillo v. Department of Agrarian Reform199 has held that "certificates of title issued in administrative proceedings are as
indefeasible as [those] issued in judicial proceedings."200 Section 2 of Administrative Order No. 03-09 provides that "[t]he
State recognizes the indefeasibility of [Certificate of Land Ownership Awards], [Emancipation Patents] and other titles
issued under any agrarian reform program."

Here, a Certificate of Land Ownership Award title was already issued and registered in Villanoza's favor on December 7,
2007.201 Villanoza's Certificate of Land Ownership Award was titled under the Torrens system on November 24,
2004.202 After the expiration of one (1) year, the certificate of title covering the property became irrevocable and
indefeasible. Secretary Pangandaman's August 8, 2007 Order, which came almost three (3) years later, was thus
ineffective.

WHEREFORE, the Petition is DENIED. The Court of Appeals' Decision dated September 26, 2014 and Resolution dated
June 4, 2015 in CA-G.R. SP No. 130544, which affirmed the Office of the President's Decision dated August 11, 2011 and
reinstated the Department of Agrarian Reform Regional Director's Order dated February 23, 2005, are AFFIRMED.

SO ORDERED.