Home CA-G.R. SP No.

48564
Preface

CARL (R.A. 6657, as amended) and Related

Laws SPECIAL TENTH DIVISION
History and Evolution of Major Agrarian
Reform Laws
[CA-G.R. SP No. 48564. June 25, 1999.]
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LUZVIMINDA SAMAHANG NAYON, INC., represented by Daniel R. De Luna, in
his capacity as president, petitioner, vs. THE OFFICE OF THE PRESIDENT,
Represented by Alexander Aguirre, in his official capacity as Executive
Secretary and MANPHIL INVESTMENT CORPORATION, represented by
Alberto Reyes, in his capacity as Bangko Sentral Liquidator of Manphil,
respondents.

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Lecture Materials
The substantial issue in this petition for review is whether the subject
landholdings should be covered by the Comprehensive Agrarian Reform Program
Login (CARP) thus sustaining the ruling of the Department of Agrarian Reform (DAR), or
whether they should be exempt from the coverage of CARP thus affirming the
ruling of the Office of the President. HTCaAD

The procedural issues implicit in private respondent's comment are

whether the petitioner which was not impleaded as a party in the quasi-judicial
proceedings has legal personality as the party adversely affected or aggrieved by
the ruling of the Office of the President and whether the petition signed only by the
president of the petitioner Luzviminda Samahang Nayon, Inc. be dismissed for
being defective in form.
Petitioner Luzviminda Samahang Nayon, Inc., represented by its president
Daniel R. De Luna filed this petition for review seeking to annul the resolutions of
the Office of the President in O.P. Case No. 97-11-8118 dated March 17, 1998
reversing the orders of the DAR, and May 19, 1998 denying DAR's motion for
reconsideration.
The case stemmed from a protest (Case No. 0400-0207-94) filed before
the DAR Regional Director, Region IV, Pasig City, by private respondents Manphil
Investment Corporation and Alberto V. Reyes, in his capacity as Bangko Sentral
Liquidator of Manphil against the DAR for CARP coverage of landholdings still
registered in the name of Lakeview and Country, Inc. at Brgy. F. de Castro,
General Mariano Alvarez, Cavite.
The text of the January 31, 1996 order of the DAR Regional Director
quoted in full by the Office of the President is also adopted as a summary of the
factual antecedents. Thus —
This pertains to the 09 September 1994 letter of Mr. Alberto V. Reyes of Bangko
Sentral ng Pilipinas (BSP, for brevity) in behalf of Manphil Investment Corporation
(Manphil). The letter is treated herein as a protest against the coverage of the
Comprehensive Agrarian Reform Program (CARP) as above-stated.
The subject matter of this administrative case are two (2) parcels of land consisting of
35.0000 and 20.4762 hectares respectively covered by Transfer Certificate of Title
Nos. T-75093 and T-91583, both in the name of Lakeview Golf and Country Club, Inc.
and located at Barangay Cabilang-Baybay, Carmona, Cavite.

Herein protestants allege inter alia: that the owner of the subject landholdings is
Manphil by virtue of a dacion en pago executed by Lakeview Golf and Country Club,
Inc. (Lakeview, for short) way back in 1984; that BSP is seriously considering to finally
approve the rehabilitation of Manphil; that the Department of Agrarian Reform (DAR)
has no jurisdiction or authority to acquire the subject landholdings under the CARP, the
same being already in custodia legis in the hands of the BSP Liquidator, Alberto V.
Reyes, when R.A. 6657 took effect on June 15, 1988; that the lands involved have
already been classified as residential or commercial by virtue of Resolution No. 6 of
the Sangguniang Bayan of Carmona, Cavite dated March 9, 1980; that the proposed
valuation of the Land Bank is grossly inadequate to constitute a just compensation;
and that in deference to the Order of the Office of the President in the case of The
Manila Banking Corporation (TMBC) date August 30, 1995, the DAR should desist
from further action towards the acquisition of subject landholdings, considering that the
legal issue in the instant case is almost identical to the TMBC case.
Records show that a Notice of Coverage pursuant to Section 7 of R.A. 6657 has been
issued to Lakeview on September 7, 1992. Thereafter, a conference called by the
Municipal Agrarian Reform Officer (MARO) was held on September 15, 1992 and
attended by farmers seeking to become CARP beneficiaries of the lands involved and
by the representative of Lakeview, Atty. Dennis Chua. During the meeting, Atty. Chua
disclosed that the Notice of Coverage is under protest as the subject landholdings are
proposed for conversion into residential use and golf course, even as the MARO
representatives announced that the documentation (leading to the CARP acquisition
and distribution) of said landholdings has already been completed. AaHcIT
xxx xxx xxx
There are two main issues involved in this case, to wit: (1) whether the Department of
Agrarian Reform (DAR) has jurisdiction over the subject landholdings; and (2) whether
the lands involved are within the scope or coverage of the CARP under R.A. 6657.
The instant protest is basically premised on the arguments that Manphil is the owner of
subject landholdings by virtue of the dacion en pago executed by Lakeview in its favor
in 1984, and that said landholdings are now classified as residential or commercial
and, therefore, the Notice of Coverage issued to Lakeview was invalid or erroneous.
We took note that there was no showing by the protestants that Manphil has secured a
certificate of ownership over the subject landholdings. As such, the DAR cannot be
faulted in relying on the ownership of Lakeview based on TCT Nos. T-75093 and T-
91583 in its name. Nevertheless, whatever defect, if any, in the issuance of the Notice
of Coverage is now moot; it has been cured in view of above-entitled case.
The protestants argued that DAR has no jurisdiction over the lands involved the same
being in custodia legis in the hands of the BSP Liquidator. We beg to disagree. The
coverage of CARP extends to all agricultural lands, regardless of ownership and
commodity produced. With the issuance of the Notice of Coverage affecting the
subject landholdings and the filing by herein protestants of their objection thereto, our
Department has acquired jurisdiction not only with respect to the lands involved but
also as regard the question raised relative to such coverage. Furthermore, the issue
raised by protestants that such lands are exempt from CARP is primarily cognizable by
DAR.
In support of the averment that the lands involved are no longer agricultural and
therefore exempt from CARP, a certification issued by Regional Technical Coordinator
Alfredo M. Tan II of the Housing and Land Use Regulatory Board (HLRB), dated
November 7, 1991 was submitted, to wit:
"CERTIFICATION

TO WHOM IT MAY CONCERN:

This is to certify that Lot 2-A, psd-37995 covered by Transfer Certificate of Title No. T-
75093 with an area of 350,000.00 square meters located at Brgy. F. de Castro, GMA,
Cavite is found to be within the Residential Zone based on the Municipality's
Sangguniang Bayan approved Comprehensive Development Plan and Zoning
Ordinance per Resolution No. 10-89 dated 07 March 1989.
This further certifies that said Town Plan is subject for completion by the Local
Government per review/comments by HLRB." ITDHSE
A close reading of the HLRB certification above-cited reveals that the subject
landholding with TCT No. T-75093 was reclassified as residential based on Municipal
Resolution No. 10-89 only on March 7, 1989. The certification also indicates that the
zoning plan of General Mariano Alvarez, Cavite has not yet been approved HLRB.
Therefore, when R.A. 6657 was promulgated on June 15, 1988, the land already came
under the coverage of CARP and its priorities for acquisition and distribution. R.A.
6657 is explicit and mandatory:
"SECTION 4. Scope. — 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."

xxx xxx xxx

"SECTION 7. Priorities. — The DAR, in coordination with the PARC shall plan
and program the acquisition and distribution of all agricultural lands through a period of
ten (10) years from the effectivity of this Act. Lands shall be acquired and distributed
as follows:"

xxx xxx xxx

"Phase Three: All other private agricultural lands commencing with large landholdings
and proceedings to medium and small landholdings under the following schedule:
a.) Landholdings above twenty-four (24) hectares up to fifty (50) hectares, to begin
on the fourth (4th) year from the effectivity of this Act and to be completed within three
(3) years;"
Considering the scope of the CARP Law and the clear statutory mandate of the DAR
in the implementation thereof, there is no legal basis in protestants' averment (that the
lands in question are exempt from CARP on the ground that DAR has no jurisdiction
but the BSP Receiver in custodia legis of the same).
The exemptions and exclusions from the coverage of CARP are provided in Section 10
of Republic Act No. 6657, as amended by Republic Act No. 7881. Also, lands which
are no longer agricultural in classification prior to the effectivity of the CARP Law on
June 15, 1988 are excluded from said coverage pursuant to Section 3 (c) thereof, as
interpreted by Department of Justice Opinion No. 44.
The grounds raised by protestants do not come within the purview of the exemptions
and exclusions as set forth in Republic Act No. 6657, as amended. As such, we have
no authority to exclude or otherwise exempt the subject landholdings from coverage,
acquisition and distribution under the CARP. STcADa
With respect to the matter of just compensation for the lands here involved, the
determination thereof is beyond our competence the same being a judicial function.
However, protestants may exhaust administrative remedies relative to the valuation
made by Land Bank by availing of the summary administrative proceeding before the
DAR Adjudication Board (DARAB).
As regards the submission that our Department should desist from proceeding further
action towards the acquisition and distribution of the subject landholdings under the
CARP, we cannot do so without abdicating our statutory mandate unless, perhaps, the
Office of the President orders us to so desist. Besides, the TMBC matter is not litis
pendentia to the instant case there being no concurrence of parties, issue and subject
matter between the former and the latter cases.
 IN VIEW WHEREOF, the above-stated Protest of Manphil Investment Corporation and
BSP Liquidator Alberto V. Reyes is hereby DENIED for lack of merit. Accordingly, the
concerned units under this Office shall proceed with the process of acquisition and
distribution of the subject landholdings under the CARP pursuant to Republic Act No.
6657.
SO ORDERED. (pp. 40-46, Rollo)

Private respondents' appeal to the DAR Secretary was dismissed for lack
of merit in the order dated April 8, 1997. (pp. 48-52)
Manphil's appeal to the Office of the President (O.P. Case no. 97-11-8119)
was granted. The dispositive portion of the resolution dated March 17, 1998 by
then Executive Secretary Alexander P. Aguirre provides:
WHEREFORE, premises considered, the instant appeal is hereby GIVEN DUE
COURSE and the DAR orders of January 31, 1996 and April 8, 1997 are hereby
REVOKED and SET ASIDE. Consequently, the landholdings subject hereof are
declared EXEMPT from coverage of the Comprehensive Agrarian Reform Law.
SO ORDERED. (p. 64, Rollo)

The DAR filed a motion for reconsideration arguing that the Honorable
Executive Secretary erred in ruling that reclassification of appellant's property
predates the passage of the CARP law; in ruling that land under custodia legis is
no longer subject to CARP; in concluding that all lands with slope over eighteen
percent (18%) is exempted from the CARP. (pp. 65-70, Rollo) In its resolution
dated May 19, 1998, the Office of the President denied DAR's motion. DAR
received a copy of the resolution on May 26, 1998. The fifteen-day period of
appeal having been lapsed without the DAR thru the OSG having filed a petition
for review to this court, the resolutions of the Office of the President exempting the
landholdings in question from the CARP coverage became final and executory.
AcHEaS
 However, on July 20, 1998, herein petitioner intervened for the first time in
this case by filing without the assistance of counsel the present petition for review
on the grounds that the Office of the President thru the Executive Secretary —
I
ERRED IN RULING THAT RECLASSIFICATION OF PRIVATE RESPONDENT-
APPELLEE'S PROPERTY PREDATES THE PASSAGE OF THE CARP LAW.
II
ERRED IN RULING THAT LAND UNDER CUSTODIA LEGIS IS NO LONGER
SUBJECT TO CARP COVERAGE.

III
LIKEWISE ERRED IN CONCLUDING THAT ALL LANDS WHICH SLOPES OVER
EIGHTEEN PERCENT (18%) IS EXEMPT FROM CARP. (p. 34, Rollo)

The petition should be dismissed. Firstly, the arguments raised in this

petition were the very same issues raised by the DAR in the Office of the President
and were already discussed exhaustively.
Anent the first ground, appellant Manphil argues that the subject lands come within the
ambit of the exemptions and exclusions set forth in R.A. No. 6657, otherwise known as
the Comprehensive Agrarian Reform Law.
While Section 4 of RA No. 6657 specifically mentions the lands covered by the CARL,
not all the criteria mentioned therein exist as to warrant coverage of the disputed land
by the CARL. For one, the certification, dated November 7, 1991, submitted by Alfredo
M. Tan II, Regional Technical Coordinator, Housing and Land Use Regulatory Board
(HLURB), attests that the disputed land was classified as residential on the basis of
Municipal Resolution No. 10-89, passed on March 7, 1989. Appellant maintains that it
is the actual use or purpose of the land that should be given weighty consideration for
purposes of the CARP. The reclassification of said landholdings has laid to rest
whatever doubt to its usage and tillage. Towards this end, lands which have lost their
agricultural character by reason of reclassification, a supervening event, are perforce
taken out of the purview of CARP coverage.
xxx xxx xxx
[A]ppellant asserts that the lands under custodia legis are exempt from the coverage of
the CARL. The legal basis for the exclusion of appellant's landholdings from CARL is
found in R.A. No. 265, otherwise known as the Central Bank Act, the law then
applicable. Appellant submits that it was ordered closed by the Central Bank of the
Philippines on October 31, 1985, and from thence on, all its assets, including the
landholdings in question which were acquired in 1984, were already placed under the
legal custody of its receiver and eventually under its liquidator (Alberto V. Reyes). The
closure by the CBP was done in accordance with the provisions of R.A. No. 265, as
amended, which among others specifically provides:
"The assets of an institution under receivership or liquidation shall be deemed in
custodia legis in the honor of the receiver or liquidator and shall, from the moment of
such receivership or liquidation, be exempt from any order or garnishment, levy,
attachment, or execution.
Thus, when CARL took effect, appellant's landholdings were already placed under
custodia legis in the hands of the receiver and eventually its liquidator, and could no
longer be subject to CARL. The above provision should be respected so as not to
prejudice third persons who stand to be affected if violated.
Compulsorily acquiring appellant's landholdings is the same as, if not worse than, 'an
order of garnishment, levy, attachment or execution.' When a bank or quasi-bank is
closed, its assets are made immune from garnishment or levy because they are
intended for distribution to its creditors or depositors, or, for that matter, for the use of
the bank or quasi-bank if it is allowed to re-open again. By compulsorily acquiring the
landholdings, appellants will lose the opportunity to develop the same into valuable
assets, which is the only plausible means that it could rehabilitate itself financially, and
 thus be allowed by the CBP to be reopened and resume operations. Consequently, the
effect of compulsory acquisition in this case is no different from the effects of
garnishment or levy.
xxx xxx xxx
[A]part from the reclassification of the disputed landholdings into mixed residential and
commercial use, the CARL allows exemption from its coverage whenever the
topographic slope of the land is over 18% rendering it not ideal for natural production.
As can be inferred from the certification dated March 1, 1994, issued by the Certeza
Surveying and Aerophoto Systems, Inc., the slope of the disputed landholdings is way
above the minimum requirement of 18%.
xxx xxx xxx
Conformably with Section 10 of R.A. No. 6657, subject landholdings are inarguably
exempt from the coverage of the Comprehensive Agrarian Reform Law. (pp. 59-64,
Rollo) cEAIHa

The findings of the DAR and the Office of the President are diametrically
opposed because they are anchored on different grounds, the former focused on
the inclusion in the CARP coverage the subject landholdings while the latter ruled
that the lands are excluded or exempted from the CARP coverage. Upon scrutiny
of their respective arguments, we decided to adopt the ruling of the Office of the
President which exhaustively analyzed Manphil's evidence as regards the
applicability or inapplicability of the Comprehensive Agrarian Reform Law (RA No.
6657, as amended). The subject landholdings are therefore exempted from the
coverage of the CARP.
On the procedural issue, while RA No. 6657 does not provide a rule on
who may appeal or seek judicial review to the Court of Appeals or the Supreme
Court, Section 25, Chapter 4, Book VIII of the Administrative Code (E.O. No. 292)
can be applied suppletorily, to wit:
 SEC. 25. Judicial Review. — (1) Any agency decision shall be subject to judicial
review in accordance with this chapter and applicable laws.

(2) Any party aggrieved or adversely affected by an agency decision may seek
judicial review.
(3) The action for judicial review may be brought against the agency, or its
officers, and all indispensable and necessary party as defined in the Rules of Court.
(emphasis supplied)
The compulsory acquisition of landholdings to the CARP is equated to an
expropriation proceedings wherein the real parties in interest are only the State, as
the expropriator, and the owner of the land. In Association of Small Landowners in
the Philippines, Inc. v. Secretary of Agrarian Reform, G.R. Nos. 78742, 78310,
79744, and 79777, July 14, 1989, the Supreme Court en banc ruled that
compulsory acquisition in agrarian cases is a revolutionary kind of expropriation.
The case before the DAR was a protest against the State's (represented
by the DAR) compulsory acquisition of Manphil's private property. The parties
involved are the protestants, Manphil Investment Corporation, herein private
respondent and the DAR itself by virtue of its exercise of the right of compulsory
acquisition. Petitioner Luzviminda Samahang Nayon, Inc. was not impleaded as a
party to the case nor was it mentioned in the orders of the Regional Director of
DAR, the DAR Secretary, and the Office of the President.
It is obvious that the alleged members of the petitioner is not adversely
affected by the decision of the Office of the President since the land was not yet
transferred to them by the DAR, assuming they are qualified beneficiaries.
Petitioner even failed to state its claim over the subject parcels of land in the
petition. The only reference that it mentioned in the petition was that the farmers-
members of the Luzviminda Samahang Nayon, Inc. were among those present in
the 1992 meeting together with the MARO and the representative of Manphil. If the
farmers-members are really qualified beneficiaries of CARP, they can pursue their
right with the DAR. Even assuming that they are farmers, they have not even an
inchoate right over the subject property since they are obviously not the actual
tillers of the said land. The disquisition of the Office of the President on the status
of the members of the petitioner would put to rest this issue. EATCcI

Further, the records of the case are bereft of any report by the DAR or any office for
the matter to show that there had been agricultural activities undertaken on the subject
land, such as crops planted, the quantity of harvested crops and other data to confirm
that the land is indeed agricultural. We, therefore, agree with appellant that the subject
land has no tenants, farm workers, or qualified beneficiaries, as defined in RA No.
6657, and the persons claiming to be beneficiaries are but squatters and intruders who
entered the land after the enactment of RA No. 6657. (p. 63, Rollo, emphasis supplied)

In Central Mindanao University v. Department of Agrarian Reform

Adjudication Board, G.R. No. 100091, October 22, 1992, the Supreme Court en
banc ruled that squatters cannot claim right under the CARP. Thus:
After the expiration of their privilege to occupy and cultivate the land of the CMU, their
continued stay was unauthorized and their settlement on the CMU's land was without
legal authority. A person entering upon lands of another, not claiming in good faith the
right to do so by virtue of any title of his own, or by virtue of some agreement with the
owner or with one whom he believes holds title to the land, is a squatter. Squatters
cannot enter the land of another surreptitiously or by stealth, and under the umbrella of
the CARP, claim rights to said property as landless peasants. Under Section 73 of R.A.
6657, persons guilty of committing prohibited acts of forcible entry or illegal detainer do
not qualify as beneficiaries and may not avail themselves of the rights and benefits of
agrarian reform. Any such person who knowingly and willfully violates the above
provision of the Act shall be punished with imprisonment or fine at the discretion of the
Court. (emphasis supplied)

It is worth emphasizing that after the Office of the President reversed the
decision of the DAR, the latter filed a motion for reconsideration. Petitioner never
ever questioned the ruling of the Office of the President precisely because it was
not a party to the case. However, the DAR through the Office of the Solicitor
General did not pursue its case by filing to this court a petition for review as the
party adversely affected by ruling of the Office of the President exempting the
subject landholdings from the coverage of the CARP. For failure of the DAR to file
a petition for review to this court with the prescribed 15-day appeal period, the
ruling of the Office of the President became final and executory.
On the question of whether the petition is defective in form since petitioner
is not assisted by counsel, reference can be made to the Rules of Court 1 as well
as to the RIRCA. 2 In the Bulacan v. Torcino, G.R. No. L-44388, January 30, 1985,
Section 34, Rule 138 of the Rules of Court 3 was again construed that [I]n
municipal courts, the litigant may be assisted by a friend, agent, or an attorney.
However, in cases before the regional trial court, the litigant must be aided by a
duly authorized member of the bar. The rule invoked by the Trocinos applies only
to cases filed with the regional trial court and not to cases before a municipal court.
Court procedures are often technical and may prove like snares to the ignorant or
the unwary. In the past, our law has allowed non-lawyers to appear for party
litigants in places where duly authorized members of the bar are not available.
(U.S. v. Bacansas, 6 Phil. 539). For relatively simple litigation before municipal
courts, the Rules still allow a more educated or capable person to appear in behalf
of a litigant who cannot get a lawyer. But for the protection of the parties and in the
interest of justice, the requirement for appearances in regional trial courts and
higher courts is more stringent. In another case, it was held that in the Regional
Trial Court and the appellate Courts, a party may conduct his litigation personally
or by attorney (Catimbuhan v. Cruz, G.R. No. 51813, November 29, 1983), unless
the party is a juridical person, in which case it may appear only by attorney
(Lichauco v. Alejandro, 21 Phil. 58 [1911]). While the RIRCA allows petitions in
agrarian cases to be filed by the appellant himself in case the appellant is a
laborer, or employee, agricultural lessee or tenant, this does not apply when
appellant is a juridical person as in the case at bar. Since petitioner was not
represented by counsel, the petition suffers procedural infirmity.
 While the policy of the State is to provide landless farmers and
farmworkers to own lands, directly or collectively, and to this end, a more equitable
distribution and ownership of land, it also recognizes certain exemptions to the
CARP coverage. The subject landholdings are exempted from CARP.
WHEREFORE, the petition is DENIED for lack of merit. The resolutions of
the Office of the President in O.P. Case No. 97-11-8118 dated March 17, 1998 and
May 19, 1998 are affirmed in toto.
SO ORDERED.
Hofileña and Agcaoili, JJ., concur.
Footnotes
1. Procedure on review. —Review by the Court of Appeals or the Supreme Court, as
the case may be, shall be governed by the Rules of Court. (Section 61, Chapter XIII, RA.
No. 6867, as amended)
2. Rule 6, Section 4 (c), RIRCA:
Unless the appellant has been authorized to litigate as pauper, the Judicial Records
Division shall immediately send a notice to his counsel or to the appellant himself if not
represented by counsel requiring payment of the docketing and other legal fees within
fifteen (15) days from receipt thereof. In case the appellant is a laborer, or employee,
agricultural lessee or tenant, he may file a verified motion setting forth said fact and praying
that he be exempted from payment of docketing and other legal fees and the deposit for
costs. If the court denies the motion, the appellant shall pay the docketing and other legal
fees within fifteen (15) days from notice of the denial otherwise the appeal shall be
dismissed.
3. SEC. 34. By whom litigation conducted. — In the court of a justice of the peace
a party may conduct his litigation in person, with the aid of an agent or friend appointed by
him for that purpose, or with the aid of an attorney. In any other court, a party may conduct
his litigation personally or by aid of an attorney, and his appearance must be either personal
or by a duly authorized member of the bar.
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