CENTRAL MINDANAO UNIVERSITY REPRESENTED ITS

PRESIDENT DR. LEONARDO A. CHUA, petitioner,

vs.

THE DEPARTMENT OF AGRARIAN REFORM

ADJUDICATION BOARD, THE COURT OF APPEALS and

ALVIN OBRIQUE, REPRESENTING BUKIDNON FREE

FARMERS AGRICULTURAL LABORERS ORGANIZATION

(BUFFALO), respondents.

CAMPOS, JR., J.:

This is a Petition for Review on Certiorari under Rule 65 of the

Rules of Court to nullify the proceedings and decision of the

Department of Agrarian Reform Adjudication Board (DARAB for

brevity) dated September 4, 1989 and to set aside the decision

the decision * of the Court of Appeals dated August 20, 1990,

affirming the decision of the DARAB which ordered the

segregation of 400 hectares of suitable, compact and

contiguous portions of the Central Mindanao Universi ty (CMU

for brevity) land and their inclusion in the Comprehensive

Agrarian Reform Program (CARP for brevity) for distribution to

qualified beneficiaries, on the ground of lack of jurisdiction.

This case originated in a complaint filed by complainants call ing

themselves as the Bukidnon Free Farmers and Agricultural

Laborers Organization (BUFFALO for brevity) under the

leadership of Alvin Obrique and Luis Hermoso against the

CMU, before the Department of Agrarian Reform for Declaration

of Status as Tenants, under the CARP.

From the records, the following facts are evident. The petitioner,

the CMU, is an agricultural educational institution owned and

run by the state located in the town of Musuan, Bukidnon

province. It started as a farm school at Marilang, Bukidnon in

early 1910, in response to the public demand for an agricultural

school in Mindanao. It expanded into the Bukidnon National

Agricultural High School and was transferred to its new site in

Managok near Malaybalay, the provincial capital of Bukidnon.

In the early 1960's, it was converted into a college with campus

at Musuan, until it became what is now known as the CMU, but

still primarily an agricultural university. From its beginning, the

school was the answer to the crying need for training people in

order to develop the agricultural potential of the island of

Mindanao. Those who planned and established the school had

a vision as to the future development of that part of the

Philippines. On January 16, 1958 the President of the Republic

of the Philippines, the late Carlos P. Garcia, "upon the

recommendation of the Secretary of Agriculture and Natural

Resources, and pursuant to the provisions of Section 53, of

Commonwealth Act No. 141, as amended", issued

Proclamation No. 476, withdrawing from sale or settlement and

reserving for the Mindanao Agricultural College, a site which

would be the future campus of what is now the CMU. A total

land area comprising 3,080 hectares was surveyed and

registered and titled in the name of the petitioner under OCT

Nos. 160, 161 and 162. 1

In the course of the cadastral hearing of the school's petition for

registration of the aforementioned grant of agricultural land,

several tribes belonging to cultural communities, opposed the

petition claiming ownership of certain ancestral lands forming

part of the tribal reservations. Some of the claims were granted

so that what was titled to the present petitioner school was

reduced from 3,401 hectares to 3,080 hectares.

In the early 1960's, the student population of the school was

less than 3,000. By 1988, the student population had expanded

to some 13,000 students, so that the school community has an

academic population (student, faculty and non-academic staff)

of almost 15,000. To cope with the increase in its enrollment, it

has expanded and improved its educational facilities partly from

government appropriation and partly by self-help measures.

True to the concept of a land grant college, the school

embarked on self-help measures to carry out its educational

objectives, train its students, and maintain various activities

which the government appropriation could not adequately

support or sustain. In 1984, the CMU approved Resolution No.

160, adopting a livelihood program called "Kilusang Sariling

Sikap Program" under which the land resources of the

University were leased to its faculty and employees. This

arrangement was covered by a written contract. Under this

program the faculty and staff combine themselves to groups of

five members each, and the CMU provided technical know-how,

practical training and all kinds of assistance, to enable each

group to cultivate 4 to 5 hectares of land for the lowland rice

project. Each group pays the CMU a service fee and also a land

use participant's fee. The contract prohibits participants and

their hired workers to establish houses or live in the project area

and to use the cultivated land as a collateral for any kind of

loan. It was expressly stipulated that no landlord-tenant

relationship existed between the CMU and the faculty and/or

employees. This particular program was conceived as a multi-

disciplinary applied research extension and productivity

program to utilize available land, train people in modern

agricultural technology and at the same time give the faculty

and staff opportunities within the confines of the CMU

reservation to earn additional income to augment their salaries.

The location of the CMU at Musuan, Bukidnon, which is quite a

distance from the nearest town, was the proper setting for the

adoption of such a program. Among the participants in this

program were Alvin Obrique, Felix Guinanao, Joven Caballero,

Nestor Pulao, Danilo Vasquez, Aronio Pelayo and other

complainants. Obrique was a Physics Instructor at the CMU

while the others were employees in the lowland rice project.

The other complainants who were not members of the faculty or

non-academic staff CMU, were hired workers or laborers of the

participants in this program. When petitioner Dr. Leonardo Chua

became President of the CMU in July 1986, he discontinued the

agri-business project for the production of rice, corn and sugar

cane known as Agri-Business Management and Training

Project, due to losses incurred while carrying on the said

project. Some CMU personnel, among whom were the

complainants, were laid-off when this project was discontinued.

As Assistant Director of this agri-business project, Obrique was

found guilty of mishandling the CMU funds and was separated

from service by virtue of Executive Order No. 17, the re-

organization law of the CMU.

Sometime in 1986, under Dr. Chua as President, the CMU

launched a self-help project called CMU-Income Enhancement

Program (CMU-IEP) to develop unutilized land resources,

mobilize and promote the spirit of self-reliance, provide socio-

economic and technical training in actual field project

implementation and augment the income of the faculty and the

staff.

Under the terms of a 3-party Memorandum of Agreement 2

among the CMU, the CMU-Integrated Development Foundation

(CMU-IDF) and groups or "seldas" of 5 CMU employees, the

CMU would provide the use of 4 to 5 hectares of land to a selda

for one (1) calendar year. The CMU-IDF would provide

researchers and specialists to assist in the preparation of

project proposals and to monitor and analyze project

implementation. The selda in turn would pay to the CMU P100

as service fee and P1,000 per hectare as participant's land

rental fee. In addition, 400 kilograms of the produce per year

would be turned over or donated to the CMU-IDF. The

participants agreed not to allow their hired laborers or member

of their family to establish any house or live within vicinity of the

project area and not to use the allocated lot as collateral for a

loan. It was expressly provided that no tenant-landlord

relationship would exist as a result of the Agreement.

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Initially, participation in the CMU-IEP was extended only to

workers and staff members who were still employed with the

CMU and was not made available to former workers or

employees. In the middle of 1987, to cushion the impact of the

discontinuance of the rice, corn and sugar cane project on the

lives of its former workers, the CMU allowed them to participate

in the CMU-IEP as special participants.

Under the terms of a contract called Addendum To Existing

Memorandum of Agreement Concerning Participation To the

CMU-Income Enhancement Program, 3 a former employee

would be grouped with an existing selda of his choice and

provided one (1) hectare for a lowland rice project for one (1)

calendar year. He would pay the land rental participant's fee of

P1,000.00 per hectare but on a charge-to-crop basis. He would

also be subject to the same prohibitions as those imposed on

the CMU employees. It was also expressly provided that no

tenant-landlord relationship would exist as a result of the

Agreement.

The one-year contracts expired on June 30, 1988. Some

contracts were renewed. Those whose contracts were not

renewed were served with notices to vacate.

The non-renewal of the contracts, the discontinuance of the

rice, corn and sugar cane project, the loss of jobs due to

termination or separation from the service and the alleged

harassment by school authorities, all contributed to, and

precipitated the filing of the complaint.

On the basis of the above facts, the DARAB found that the

private respondents were not tenants and cannot therefore be

beneficiaries under the CARP. At the same time, the DARAB

ordered the segregation of 400 hectares of suitable, compact

and contiguous portions of the CMU land and their inclusion in

the CARP for distribution to qualified beneficiaries.

The petitioner CMU, in seeking a review of the decisions of the

respondents DARAB and the Court of Appeals, raised the

following issues:

1.) Whether or not the DARAB has jurisdiction to hear and

decide Case No. 005 for Declaration of Status of Tenants and

coverage of land under the CARP.

2.) Whether or not respondent Court of Appeals

committed serious errors and grave abuse of discretion

amounting to lack of jurisdiction in dismissing the Petition for

Review on Certiorari and affirming the decision of DARAB.

In their complaint, docketed as DAR Case No. 5, filed with the

DARAB, complainants Obrique, et al. claimed that they are

tenants of the CMU and/or landless peasants

claiming/occupying a part or portion of the CMU situated at

Sinalayan, Valencia, Bukidnon and Musuan, Bukidnon,

consisting of about 1,200 hectares. We agree with the DARAB's

finding that Obrique, et. al. are not tenants. Under the terms of

the written agreement signed by Obrique, et. al., pursuant to the

livelihood program called "Kilusang Sariling Sikap Program", it

was expressly stipulated that no landlord-tenant relationship

existed between the CMU and the faculty and staff (participants

in the project). The CMU did not receive any share from the

harvest/fruits of the land tilled by the participants. What the

CMU collected was a nominal service fee and land use

participant's fee in consideration of all the kinds of assistance

given to the participants by the CMU. Again, the agreement

signed by the participants under the CMU-IEP clearly stipulated

that no landlord-tenant relationship existed, and that the

participants are not share croppers nor lessees, and the CMU

did not share in the produce of the participants' labor.

In the same paragraph of their complaint, complainants claim

that they are landless peasants. This allegation requires proof

and should not be accepted as factually true. Obrique is not a

landless peasant. The facts showed he was Physics Instructor

at CMU holding a very responsible position was separated from

the service on account of certain irregularities he committed

while Assistant Director of the Agri-Business Project of

cultivating lowland rice. Others may, at the moment, own no

land in Bukidnon but they may not necessarily be so destitute in

their places of origin. No proof whatsoever appears in the

record to show that they are landless peasants.

The evidence on record establish without doubt that the

complainants were originally authorized or given permission to

occupy certain areas of the CMU property for a definite purpose

to carry out certain university projects as part of the CMU's

program of activities pursuant to its avowed purpose of giving

training and instruction in agricultural and other related

technologies, using the land and other resources of the

institution as a laboratory for these projects. Their entry into the

land of the CMU was with the permission and written consent of

the owner, the CMU, for a limited period and for a specific

purpose. 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.

4 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 wilfully violates the

above provision of the Act shall be punished with imprisonment

or fine at the discretion of the Court.

In view of the above, the private respondents, not being tenants

nor proven to be landless peasants, cannot qual ify as

beneficiaries under the CARP.

The questioned decision of the Adjudication Board, affirmed in

toto by the Court of Appeals, segregating 400 hectares from the

CMU land is primarily based on the alleged fact that the land

subject hereof is "not directly, actually and exclusively used for

school sites, because the same was leased to Philippine

Packing Corporation (now Del Monte Philippines)".

In support of this view, the Board held that the "respondent

University failed to show that it is using actually, really, truly and

in fact, the questioned area to the exclusion of others, nor did it

show that the same is directly used without any intervening

agency or person", 5 and "there is no definite and concrete

showing that the use of said lands are essentially indispensable

for educational purposes". 6 The reliance by the respondents

Board and Appellate Tribunal on the technical or literal definition

from Moreno's Philippine Law Dictionary and Black's Law

Dictionary, may give the ordinary reader a classroom meaning

of the phrase "is actually directly and exclusively", but in so

doing they missed the true meaning of Section 10, R.A. 6657,

as to what lands are exempted or excluded from the coverage

of the CARP.

The pertinent provisions of R.A. 6657, otherwise known as the

Comprehensive Agrarian Reform Law of 1988, are as follows:

Sec. 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.

More specifically, the following lands are covered by the

Comprehensive Agrarian Reform Program:

(a) All alienable and disposable lands of the public domain

devoted to or suitable for agriculture. No reclassification of

forest of mineral lands to agricultural lands shall be undertaken

after the approval of this Act until Congress, taking into account

ecological, developmental and equity considerations, shall have

determined by law, the specific limits of the public domain;

(b) All lands of the public domain in excess of the specific

limits ad determined by Congress in the preceding paragraph;

(c) All other lands owned by the Government devoted to

or suitable for agriculture; and

(d) All private lands devoted to or suitable for agriculture

regardless of the agricultural products raised or that can be

raised thereon.

Sec. 10 EXEMPTIONS AND EXCLUSIONS. Lands actually,

directly and exclusively used and found to be necessary for

parks, wildlife, forest reserves, reforestration, fish sanctuaries

and breeding grounds, watersheds and mangroves, 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 centers, 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.

(Emphasis supplied).

The construction given by the DARAB to Section 10 restricts the

land area of the CMU to its present needs or to a land area

presently, actively exploited and utilized by the university in

carrying out its present educational program with its present

student population and academic facility overlooking the very

significant factor of growth of the university in the years to

come. By the nature of the CMU, which is a school established

to promote agriculture and industry, the need for a vast tract of

agricultural land and for future programs of expansion is

obvious. At the outset, the CMU was conceived in the same

manner as land grant colleges in America, a type of educational

institution which blazed the trail for the development of vast

tracts of unexplored and undeveloped agricultural lands in the

Mid-West. What we now know as Michigan State University,

Penn State University and Illinois State University, started as

small land grant colleges, with meager funding to support their

ever increasing educational programs. They were given

extensive tracts of agricultural and forest lands to be developed

to support their numerous expanding activities in the fields of

agricultural technology and scientific research. Funds for the

support of the educational programs of land grant colleges

came from government appropriation, tuition and other student

fees, private endowments and gifts, and earnings from

miscellaneous sources. 7 It was in this same spirit that

President Garcia issued Proclamation No. 476, withdrawing

from sale or settlement and reserving for the Mindanao

Agricultural College (forerunner of the CMU) a land reservation

of 3,080 hectares as its future campus. It was set up in

Bukidnon, in the hinterlands of Mindanao, in order that it can

have enough resources and wide open spaces to grow as an

agricultural educational institution, to develop and train future

farmers of Mindanao and help attract settlers to that part of the

country.

In line with its avowed purpose as an agricultural and technical

school, the University adopted a land utilization program to

develop and exploit its 3080-hectare land reservation as

follows: 8

No. of Hectares Percentage

a. Livestock and Pasture 1,016.4033

b. Upland Crops 616 20

c. Campus and Residential sites 462 15

d. Irrigated rice 400.40 13

e. Watershed and forest reservation 308 10

f. Fruit and Trees Crops 154 5

g. Agricultural

Experimental stations 123.20 4

3,080.00100%

The first land use plan of the CARP was prepared in 1975 and

since then it has undergone several revisions in line with

changing economic conditions, national economic policies and

financial limitations and availability of resources. The CMU,

through Resolution No. 160 S. 1984, pursuant to its

development plan, adopted a multi-disciplinary applied research

extension and productivity program called the "Kilusang Sariling

Sikap Project" (CMU-KSSP). The objectives 9 of this program

were:

1. Provide researches who shall assist in (a) preparation

of proposal; (b) monitor project implementation; and (c) collect

and analyze all data and information relevant to the processes

and results of project implementation;

2. Provide the use of land within the University

reservation for the purpose of establishing a lowland rice project

for the party of the Second Part for a period of one calendar

year subject to discretionary renewal by the Party of the First

Part;

3. Provide practical training to the Party of the Second

Part on the management and operation of their lowland project

upon request of Party of the Second Part; and

4. Provide technical assistance in the form of relevant

livelihood project specialists who shall extend expertise on

scientific methods of crop production upon request by Party of

the Second Part.

In return for the technical assistance extended by the CMU, the

participants in a project pay a nominal amount as service fee.

The self-reliance program was adjunct to the CMU's lowland

rice project.

The portion of the CMU land leased to the Philippine Packing

Corporation (now Del Monte Phils., Inc.) was leased long before

the CARP was passed. The agreement with the Philippine

Packing Corporation was not a lease but a Management and

Development Agreement, a joint undertaking where use by the

Philippine Packing Corporation of the land was part of the CMU

research program, with the direct participation of faculty and

students. Said contracts with the Philippine Packing Corporation

and others of a similar nature (like MM-Agraplex) were made

prior to the enactment of R.A. 6657 and were directly connected

to the purpose and objectives of the CMU as an educational

institution. As soon as the objectives of the agreement for the

joint use of the CMU land were achieved as of June 1988, the

CMU adopted a blue print for the exclusive use and utilization of

said areas to carry out its own research and agricultural

experiments.

As to the determination of when and what lands are found to be

necessary for use by the CMU, the school is in the best position

to resolve and answer the question and pass upon the problem

of its needs in relation to its avowed objectives for which the

land was given to it by the State. Neither the DARAB nor the

Court of Appeals has the right to substitute its judgment or

discretion on this matter, unless the evidentiary facts are so

manifest as to show that the CMU has no real for the land.

It is our opinion that the 400 hectares ordered segregated by

the DARAB and affirmed by the Court of Appeals in its Decision

dated August 20, 1990, is not covered by the CARP because:

(1) It is not alienable and disposable land of the public

domain;

(2) The CMU land reservation is not in excess of specific

limits as determined by Congress;

(3) It is private land registered and titled in the name of its

lawful owner, the CMU;

(4) It is exempt from coverage under Section 10 of R.A.

6657 because the lands are actually, directly and exclusively

used and found to be necessary for school site and campus,

including experimental farm stations for educational purposes,

and for establishing seed and seedling research and pilot

production centers. (Emphasis supplied).

Under Section 4 and Section 10 of R.A. 6657, it is crystal clear

that the jurisdiction of the DARAB is limited only to matters

involving the implementation of the CARP. More specifically, it

is restricted to agrarian cases and controversies involving lands

falling within the coverage of the aforementioned program. It

does not include those which are actually, directly and

exclusively used and found to be necessary for, among such

purposes, school sites and campuses for setting up

experimental farm stations, research and pilot production

centers, etc.

Consequently, the DARAB has no power to try, hear and

adjudicate the case pending before it involving a portion of the

CMU's titled school site, as the portion of the CMU land

reservation ordered segregated is actually, directly and

exclusively used and found by the school to be necessary for its

purposes. The CMU has constantly raised the issue of the

DARAB's lack of jurisdiction and has questioned the

respondent's authority to hear, try and adjudicate the case at

bar. Despite the law and the evidence on record tending to

establish that the fact that the DARAB had no jurisdiction, it

made the adjudication now subject of review.

Whether the DARAB has the authority to order the segregation

of a portion of a private property titled in the name of its lawful

owner, even if the claimant is not entitled as a beneficiary, is an

issue we feel we must resolve. The quasi-judicial powers of

DARAB are provided in Executive Order No. 129-A, quoted

hereunder in so far as pertinent to the issue at bar:

Sec. 13. AGRARIAN REFORM ADJUDICATION BOARD

There is hereby created an Agrarian Reform Adjudication Board

under the office of the Secretary. . . . The Board shall assume

the powers and functions with respect to adjudication of

agrarian reform cases under Executive Order 229 and this

Executive Order . . .

Sec. 17. QUASI JUDICIAL POWERS OF THE DAR. The

DAR is hereby vested with quasi-judicial powers to determine

and adjudicate agrarian reform matters and shall have exclusive

original jurisdiction over all matters including implementation of

Agrarian Reform.

Section 50 of R.A. 6658 confers on the DAR quasi-judicial

powers as follows:

The DAR is hereby vested with primary jurisdiction to determine

and adjudicate agrarian reform matters and shall have original

jurisdiction over all matters involving the implementation of

agrarian reform. . . .

Section 17 of Executive Order No. 129-A is merely a repetition

of Section 50, R.A. 6657. There is no doubt that the DARAB

has jurisdiction to try and decide any agrarian dispute in the

implementation of the CARP. An agrarian dispute is defined by

the same law as any controversy relating to tenurial rights

whether leasehold, tenancy stewardship or otherwise over

lands devoted to agriculture.

In the case at bar, the DARAB found that the complainants are

not share tenants or lease holders of the CMU, yet it ordered

the "segregation of a suitable compact and contiguous area of

Four Hundred hectares, more or less", from the CMU land

reservation, and directed the DAR Regional Director to

implement its order of segregation. Having found that the

complainants in this agrarian dispute for Declaration of Tenancy

Status are not entitled to claim as beneficiaries of the CARP

because they are not share tenants or leaseholders, its order

for the segregation of 400 hectares of the CMU land was

without legal authority. w do not believe that the quasi -judicial

function of the DARAB carries with it greater authority than

ordinary courts to make an award beyond what was demanded

by the complainants/petitioners, even in an agrarian dispute.

Where the quasi-judicial body finds that the

complainants/petitioners are not entitled to the rights they are

demanding, it is an erroneous interpretation of authority for that

quasi-judicial body to order private property to be awarded to

future beneficiaries. The order segregation 400 hectares of the

CMU land was issued on a finding that the complainants are not

entitled as beneficiaries, and on an erroneous assumption that

the CMU land which is excluded or exempted under the law is

subject to the coverage of the CARP. Going beyond what was

asked by the complainants who were not entitled to the relief

prayed the complainants who were not entitled to the relief

prayed for, constitutes a grave abuse of discretion because it

implies such capricious and whimsical exercise of judgment as

is equivalent to lack of jurisdiction.

The education of the youth and agrarian reform are admittedly

among the highest priorities in the government socio-economic

programs. In this case, neither need give way to the other.

Certainly, there must still be vast tracts of agricultural land in

Mindanao outside the CMU land reservation which can be

made available to landless peasants, assuming the claimants

here, or some of them, can qualify as CARP beneficiaries. To

our mind, the taking of the CMU land which had been

segregated for educational purposes for distribution to yet

uncertain beneficiaries is a gross misinterpretation of the

authority and jurisdiction granted by law to the DARAB.

The decision in this case is of far-reaching significance as far as

it concerns state colleges and universities whose resources and

research facilities may be gradually eroded by m isconstruing

the exemptions from the CARP. These state colleges and

universities are the main vehicles for our scientific and

technological advancement in the field of agriculture, so vital to

the existence, growth and development of this country.

It is the opinion of this Court, in the light of the foregoing

analysis and for the reasons indicated, that the evidence is

sufficient to sustain a finding of grave abuse of discretion by

respondents Court of Appeals and DAR Adjudication Board. We

hereby declare the decision of the DARAB dated September 4,

1989 and the decision of the Court of Appeals dated August 20,

1990, affirming the decision of the quasi-judicial body, as null

and void and hereby order that they be set aside, with costs

against the private respondents.

SO ORDERED

CMU vs. DARAB

G.R. No. 100091

Facts:

On 16 January 1958, Pres ident Carlos Garcia issued Proclamation No.

467 reserving for the Mindanao Agricultural College, now the CMU, a

piece of land to be used as i ts future campus. In 1984, CMU

embarked on a project titled "Ki lusang Sariling Sikap" wherein parcels

of land were leased to i ts faculty members and employees. Under the

terms of the program, CMU wi ll assist faculty members and employee

groups through the extension of technica l know-how, tra ining and

other kinds of assistance. In turn, they paid the CMU a service fee for

use of the land. The agreement explicitly provided that there wi l l be

no tenancy relationship between the lessees and the CMU.

When the program was terminated, a case was fi led by the

participants of the "Kilusang Sariling Sikap" for declaration of s tatus

as tenants under the CARP. In its resolution, DARAB, ordered, among

others , the segregation of 400 hectares of the land for dis tribution

under CARP. The land was subjected to coverage on the bas is of

DAR's determination that the lands do not meet the condition for

exemption, that is, i t is not "actually, di rectly, and exclus ively used"

for educational purposes .

Is sue:

Is the CMU land covered by CARP? Who determines whether lands

reserved for public use by presidentia l proclamati on is no longer

actually, di rectly and exclusively used and necessary for the purpose

for which they are reserved?

Held:

The land is exempted from CARP. CMU is in the best pos i tion to

resolve and answer the question of when and what lands are found

necessary for i ts use. The Court a lso chided the DARAB for resolving

this issue of exemption on the basis of "CMU's present needs ." The

Court s tated that the DARAB decision stating that for the land to be

exempt i t must be "presently, actively exploited and uti l i zed by the

university in carrying out i ts present educational program with i ts

present s tudent population and academic faculty" overlooked the

very s igni ficant factor of growth of the univers i ty in the years to

come.

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ATLAS FERTILIZER CORPORATION, petitioner,

vs.

THE HONORABLE SECRETARY OF THE DEPARTMENT OF

AGRARIAN REFORM, respondent.

G.R. No. 97855 June 19, 1997

PHILIPPINE FEDERATION OF FISHFARM PRODUCERS,

INC. petitioner,

vs.

THE HONORABLE SECRETARY OF THE DEPARTMENT OF

AGRARIAN REFORM, respondent.

R E S O L U T I O N

ROMERO, J.:

Before this Court are consolidated petitions questioning the

constitutionality of some portions of Republic Act No. 6657

otherwise known as the Comprehensive Agrarian Reform Law.

1

Petitioners Atlas Fertilizer Corporation, 2 Philippine Federation

of Fishfarm Producers, Inc. and petitioner-in-intervention

Archie's Fishpond, Inc. and Arsenio Al. Acuna 3 are engaged in

the aquaculture industry utilizing fishponds and prawn farms.

They assail Sections 3 (b), 11, 13, 16 (d), 17 and 32 of R.A.

6657, as well as the implementing guidelines and procedures

contained in Administrative Order Nos. 8 and 10 Series of 1988

issued by public respondent Secretary of the Department of

Agrarian Reform as unconstitutional.

Petitioners claim that the questioned provisions of CARL violate

the Constitution in the following manner:

1. Sections 3 (b), 11, 13, 16 (d), 17 and 32 of CARL

extend agrarian reform to aquaculture lands even as Section 4,

Article XIII of the Constitution limits agrarian reform only to

agricultural lands.

2. The questioned provisions similarly treat of

aquaculture lands and agriculture lands when they are

differently situated, and differently treat aquaculture lands and

other industrial lands, when they are similarly situated in

violation of the constitutional guarantee of the equal protection

of the laws.

3. The questioned provisions distort employment benefits

and burdens in favor of aquaculture employees and against

other industrial workers even as Section 1 and 3, Article XIII of

the Constitution mandate the State to promote equality in

economic and employment opportunities.

4. The questioned provisions deprive petitioner of its

government-induced investments in aquaculture even as

Sections 2 and 3, Article XIII of the Constitution mandate the

State to respect the freedom of enterprise and the right of

enterprises to reasonable returns on investments and to

expansion and growth.

The constitutionality of the above-mentioned provisions has

been ruled upon in the case of Luz Farms, Inc. v. Secretary of

Agrarian Reform 4 regarding the inclusion of land devoted to

the raising of livestock, poultry and swine in its coverage.

The issue now before this Court is the constitutionality of the

same above-mentioned provisions insofar as they include in its

coverage lands devoted to the aquaculture industry, particularly

fishponds and prawn farms.

In their first argument , petitioners contend that in the case of

Luz Farms, Inc. v. Secretary of Agrarian Reform, 5 this Court

has already ruled impliedly that lands devoted to fishing are not

agricultural lands. In aquaculture, fishponds and prawn farm s,

the use of land is only incidental to and not the principal factor

in productivity and, hence, as held in "Luz Farms," they too

should be excluded from R.A. 6657 just as lands devoted to

livestock, swine, and poultry have been excluded for the same

reason. They also argue that they are entitled to the full benefit

of "Luz Farms" to the effect that only five percent of the total

investment in aquaculture activities, fishponds, and prawn

farms, is in the form of land, and therefore, cannot be classified

as agricultural activity. Further, that in fishponds and prawn

farms, there are no farmers, nor farm workers, who till lands,

and no agrarian unrest, and therefore, the constitutionally

intended beneficiaries under Section 4, Art. XIII, 1987

Constitution do not exist in aquaculture.

In their second argument, they contend that R.A. 6657, by

including in its coverage, the raising of fish and aquaculture

operations including fishponds and prawn ponds, treating them

as in the same class or classification as agriculture or farming

violates the equal protection clause of the Constitution and is,

therefore, void. Further, the Constitutional Commission debates

show that the intent of the constitutional framers is to exclude

"industrial" lands, to which category lands devoted to

aquaculture, fishponds, and fish farms belong.

Petitioners also claim that Administrative Order Nos. 8 and 10

issued by the Secretary of the Department of Agrarian Reform

are, likewise, unconstitutional, as held in "Luz Farms," and are

therefore void as they implement the assailed provisions of

CARL.

The provisions of CARL being assailed as unconstitutional are

as follows:

(a) Section 3 (b) which includes the "raising of fish in the

definition of "Agricultural, Agricultural Enterprise or Agricultural

Activity." (Emphasis Supplied)

(b) Section 11 which defines "commercial farms" as

private agricultural lands devoted to fishponds and prawn

ponds. . . . (Emphasis Supplied)

(c) Section 13 which calls upon petitioner to execute a

production-sharing plan.

(d) Section 16(d) and 17 which vest on the Department of

Agrarian reform the authority to summarily determine the just

compensation to be paid for lands covered by the

comprehensive Agrarian reform Law.

(e) Section 32 which spells out the production-sharing

plan mentioned in section 13

. . . (W)hereby three percent (3%) of the gross sales from the

production of such lands are distributed within sixty (60) days at

the end of the fiscal year as compensation to regular and other

farmworkers in such lands over and above the compensation

they currently receive: Provided, That these individuals or

entities realize gross sales in excess of five million pesos per

annum unless the DAR, upon proper application, determines a

lower ceiling.

In the event that the individual or entity realizes a profit, an

additional ten percent (10%) of the net profit after tax shall be

distributed to said regular and other farmworkers within ninety

(90) days of the end of the fiscal year. . . .

While the Court will not hesitate to declare a law or an act void

when confronted squarely with constitutional issues, neither will

it preempt the Legislative and the Executive branches of the

government in correcting or clarifying, by means of amendment,

said law or act. On February 20, 1995, Republic Act No. 7881 6

was approved by Congress. Provisions of said Act pertinent to

the assailed provisions of CARL are the following:

Sec. 1. Section 3, Paragraph (b) of Republic Act No. 6657 is

hereby amended to read as follows:

Sec. 3. Definitions. For the purpose of this Act, unless the

context indicates otherwise:

(b) Agriculture, Agricultural Enterprise or Agricultural

Activity means the cultivation of the soil, planting of crops,

growing of fruit trees, including the harvesting of such farm

products and other farm activities and practices performed by a

farmer in conjunction with such farming operations done by

persons whether natural or juridical.

Sec. 2. Section 10 of Republic Act No. 6657 is hereby

amended to read as follows:

Sec. 10. Exemptions and Exclusions.

xxx xxx xxx

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 to agrarian reform beneficiaries under the

Comprehensive 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 a 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 farm workers shall no longer be necessary,

however, the provision of Section 32-A hereof on incentives

shall apply.

xxx xxx xxx

Sec. 3. Section 11, Paragraph 1 is hereby amended to read as

follows:

Sec. 11. Commercial Farming. Commercial farms, which are

private agricultural lands devoted to saltbeds, fruit farms,

orchards, vegetable and cut-flower farms and cacao, coffee and

rubber plantations, shall be subject to immediate compulsory

acquisition and distribution after ten (10) years from the

effectivity of this Act. In the case of new farms, the ten-year

period shall begin from the first year of commercial production

and operation, as determined by the DAR. During the ten-year

period, the Government shall initiate steps necessary to acquire

these lands, upon payment of just compensation for the land

and the improvements thereon, preferably in favor of organized

cooperatives or associations, which shall thereafter manage the

said lands for the workers beneficiaries.

Sec. 4. There shall be incorporated after Section 32 of

Republic Act No. 6657 a section to read as follows

Sec. 32-A. Incentives. Individuals or entities owning or

operating fishponds and prawn farms are hereby mandated to

execute within six (6) months from the effectivity of this Act, an

incentive plan with their regular fishpond or prawn farm workers'

organization, if any, whereby seven point five percent (7.5%) of

their net profit before tax from the operation of the fishpond or

prawn farms are distributed within sixty (60) days at the end of

the fiscal year as compensation to regular and other pond

workers in such ponds over and above the compensation they

currently receive.

In order to safeguard the right of the regular fis hpond or prawn

farm workers under the incentive plan, the books of the

fishpond or prawn owners shall be subject to periodic audit or

inspection by certified public accountants chosen by the

workers.

The foregoing provision shall not apply to agricultural lands

subsequently converted to fishponds or prawn farms provided

the size of the land converted does not exceed the retention

limit of the landowner.

The above-mentioned provisions of R.A. No. 7881 expressly

state that fishponds and prawn farms are excluded from the

coverage of CARL. In view of the foregoing, the question

concerning the constitutionality of the assailed provisions has

become moot and academic with the passage of R.A. No. 7881.

WHEREFORE, the petition is hereby DISMISSED.

SO ORDERED.

CASE DIGEST #6: ATLAS VS AGRA

Facts:

Before this Court are consolidated petitions questioning the

constitutionality of some portions of Republic Act No. 6657

otherwise known as the Comprehensive Agrarian Reform Law.

Petitioners Atlas Fertilizer Corporation, Philippine Federation of

Fishfarm Producers, Inc. and petitioner-in-intervention Archie's

Fishpond, Inc. and Arsenio Al. Acuna are engaged in the

aquaculture industry utilizing fishponds and prawn farms. They

assail Sections 3 (b), 11, 13, 16 (d), 17 and 32 of R.A. 6657, as

well as the implementing guidelines and procedures contained

in Administrative Order Nos. 8 and 10 Series of 1988 issued by

public respondent Secretary of the Department of Agrarian

Reform as unconstitutional.

Petitioners claim that the questioned provisions of CARL violate

the Constitution in the following manner:

1. Sections 3 (b), 11, 13, 16 (d), 17 and 32 of CARL extend

agrarian reform to aquaculture lands even as Section 4, Article

XIII of the Constitution limits agrarian reform only to agricultural

lands.

2. The questioned provisions similarly treat of aquaculture lands

and agriculture lands when they are differently situated, and

differently treat aquaculture lands and other industrial lands,

when they are similarly situated in violation of the constitutional

guarantee of the equal protection of the laws.

3. The questioned provisions distort employment benefits and

burdens in favor of aquaculture employees and against other

industrial workers even as Section 1 and 3, Article XIII of the

Constitution mandate the State to promote equality in economic

and employment opportunities.

4. The questioned provisions deprive petitioner of its

government-induced investments in aquaculture even as

Sections 2 and 3, Article XIII of the Constitution mandate the

State to respect the freedom of enterprise and the right of

enterprises to reasonable returns on investments and to

expansion and growth.

The constitutionality of the above-mentioned provisions has

been ruled upon in the case of Luz Farms, Inc. v.Secretary of

Agrarian Reform regarding the inclusion of land devoted to the

raising of livestock, poultry and swine in its coverage.

The issue now before this Court is the constitutionality of the

same above-mentioned provisions insofar as they include in its

coverage lands devoted to the aquaculture industry, particularly

fishponds and prawn farms.

Issue:

Whether or not Sections 3 (b), 11, 13, 16 (d), 17 and 32

of R.A. 6657, as well as the implementing guidelines and

procedures contained in Administrative Order Nos. 8 and 10

Series of 1988 issued by public respondent Secretary of the

Department of Agrarian Reform are unconstitutional.

Held:

No, the contested provisions of R.A. 6657 and of A.O. Nos. 8

and 10 are not unconstitutional. The Suprem e Court has

already ruled impliedly that lands devoted to fishing are not

agricultural lands. In aquaculture, fishponds and prawn farms,

the use of land is only incidental to and not the principal factor

in productivity and, hence, as held in "Luz Farms," they too

should be excluded from R.A. 6657 just as lands devoted to

livestock, swine, and poultry have been excluded for the same

reason.

When the case was pending, RA 7881 was approved by

Congress amending RA 6657. Provisions of R.A. No. 7881

expressly state that fishponds and prawn are excluded from the

coverage of CARL.

Thus, the petition was dismissed by the Supreme Court.

HELD:

PETITIONERs contention

First argument: that in the case of Luz Farms, Inc. v. Secretary of

Agrarian Reform, this Court has already ruled impliedly that lands

devoted to f ishing are not agriculture lands, for the use of land is only

incidental to and not the principal factor in productivity and, hence,

should be excluded from R.A. 6657.

Second argument: that R.A. 6657, by including f ishponds and praw n

ponds in the same classif ication as agriculture violates the equal

protection clause of the Constitution and is, therefore, void. the intent

of the consti framers is to exclude industrial lands, to w hich category

lands devoted to aquaculture, f ishponds, and f ish farms

belong.Administrative Order Nos. 8 and 10 issued by the Secretary of

the Department of Agrarian Reform are, likew ise, unconstitutional, as

held in Luz Farms, and are therefore void as they implement the

assailed provisions of CARL.

Further, that in f ishponds and praw n farms, there are no farmers,

nor farm w orkers, who till lands, and no agrarian unrest, and therefore,

the constitutionally intended beneficiaries under Section 4, Art. XIII,

1987 Constitution do not exist in aquaculture.

COURTs decis ion

The question concerning the constitutionality of the assailed provisions

has been rendered moot and academic because RA 7881, approved by

congress on February 20, 1995, expressly states that f ishponds &

praw n farms are excluded from the coverage of CARL.

The court will not hesitate to declare law or an act void when confronted

with constitutional issues, neither will it preempt the Legislative &

Executive branches of the government in correcting or clarifying, by

means of amendment said law or act.

[G.R. No. 86889 : December 4, 1990.]

192 SCRA 51

LUZ FARMS, Petitioner, vs. THE HONORABLE SECRETARY

OF THE DEPARTMENT OF AGRARIAN REFORM,

Respondent.

D E C I S I O N

PARAS, J.:

This is a petition for prohibition with prayer for restraining order

and/or preliminary and permanent injunction against the

Honorable Secretary of the Department of Agrarian Reform for

acting without jurisdiction in enforcing the assailed provisions of

R.A. No. 6657, otherwise known as the Comprehensive

Agrarian Reform Law of 1988 and in promulgating the

Guidelines and Procedure Implementing Production and Profit

Sharing under R.A. No. 6657, insofar as the same apply to

herein petitioner, and further from performing an act in violation

of the constitutional rights of the petitioner.

As gathered from the records, the factual background of this

case, is as follows:

On June 10, 1988, the President of the Phil ippines approved

R.A. No. 6657, which includes the raising of livestock, poultry

and swine in its coverage (Rollo, p. 80).

On January 2, 1989, the Secretary of Agrarian Reform

promulgated the Guidelines and Procedures Implementing

Production and Profit Sharing as embodied in Sections 13 and

32 of R.A. No. 6657 (Rollo, p. 80).

On January 9, 1989, the Secretary of Agrarian Reform

promulgated its Rules and Regulations implementing Section

11 of R.A. No. 6657 (Commercial Farms). (Rollo, p. 81).

Luz Farms, petitioner in this case, is a corporation engaged in

the livestock and poultry business and together with others in

the same business allegedly stands to be adversely affected by

the enforcement of Section 3(b), Section 11, Section 13,

Section 16(d) and 17 and Section 32 of R.A. No. 6657

otherwise known as Comprehensive Agrarian Reform Law and

of the Guidelines and Procedures Implementing Production and

Profit Sharing under R.A. No. 6657 promulgated on January 2,

1989 and the Rules and Regulations Implementing Section 11

thereof as promulgated by the DAR on January 9, 1989 (Rollo,

pp. 2-36).: rd

Hence, this petition praying that aforesaid laws, guidelines and

rules be declared unconstitutional. Meanwhile, it is also prayed

that a writ of preliminary injunction or restraining order be

issued enjoining public respondents from enforcing the same,

insofar as they are made to apply to Luz Farms and other

livestock and poultry raisers.

This Court in its Resolution dated July 4, 1939 resolved to deny,

among others, Luz Farms' prayer for the issuance of a

preliminary injunction in its Manifestation dated May 26, and 31,

1989. (Rollo, p. 98).

Later, however, this Court in its Resolution dated August 24,

1989 resolved to grant said Motion for Reconsideration

regarding the injunctive relief, after the filing and approval by

this Court of an injunction bond in the amount of P100,000.00.

This Court also gave due course to the petition and required the

parties to file their respective memoranda (Rollo, p. 119).

The petitioner filed its Memorandum on September 6, 1989

(Rollo, pp. 131-168).

On December 22, 1989, the Solicitor General adopted his

Comment to the petition as his Memorandum (Rollo, pp. 186-

187).

Luz Farms questions the following provisions of R.A. 6657,

insofar as they are made to apply to it:

(a) Section 3(b) which includes the "raising of livestock (and

poultry)" in the definition of "Agricultural, Agricultural Enterprise

or Agricultural Activity."

(b) Section 11 which defines "commercial farms" as "private

agricultural lands devoted to commercial, livestock, poultry and

swine raising . . ."

(c) Section 13 which calls upon petitioner to execute a

production-sharing plan.

(d) Section 16(d) and 17 which vest on the Department of

Agrarian Reform the authority to summarily determine the just

compensation to be paid for lands covered by the

Comprehensive Agrarian Reform Law.

(e) Section 32 which spells out the production-sharing plan

mentioned in Section 13

". . . (W)hereby three percent (3%) of the gross sales from the

production of such lands are distributed within sixty (60) days of

the end of the fiscal year as compensation to regular and other

farmworkers in such lands over and above the compensation

they currently receive: Provided, That these individuals or

entities realize gross sales in excess of five million pesos per

annum unless the DAR, upon proper application, determine a

lower ceiling.

In the event that the individual or entity realizes a profit, an

additional ten (10%) of the net profit after tax shall be dis tributed

to said regular and other farmworkers within ninety (90) days of

the end of the fiscal year . . ."

The main issue in this petition is the constitutionality of Sections

3(b), 11, 13 and 32 of R.A. No. 6657 (the Comprehensive

Agrarian Reform Law of 1988), insofar as the said law includes

the raising of livestock, poultry and swine in its coverage as well

as the Implementing Rules and Guidelines promulgated in

accordance therewith.:-cralaw

The constitutional provision under consideration reads as

follows:

ARTICLE XIII

x x x

AGRARIAN AND NATURAL RESOURCES REFORM

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 rights of small landowners. The State

shall further provide incentives for voluntary land-sharing.

x x x"

Luz Farms contended that it does not seek the nullification of

R.A. 6657 in its entirety. In fact, it acknowledges the

correctness of the decision of this Court in the case of the

Association of Small Landowners in the Philippines, Inc. vs.

Secretary of Agrarian Reform (G.R. 78742, 14 July 1989)

affirming the constitutionality of the Comprehensive Agrarian

Reform Law. It, however, argued that Congress in enacting the

said law has transcended the mandate of the Constitution, in

including land devoted to the raising of livestock, poultry and

swine in its coverage (Rollo, p. 131). Livestock or poultry raising

is not similar to crop or tree farming. Land is not the primary

resource in this undertaking and represents no more than five

percent (5%) of the total investment of commercial livestock and

poultry raisers. Indeed, there are many owners of residential

lands all over the country who use available space in their

residence for commercial livestock and raising purposes, under

"contract-growing arrangements," whereby processing

corporations and other commercial livestock and poultry raisers

(Rollo, p. 10). Lands support the buildings and other amenities

attendant to the raising of animals and birds . The use of land is

incidental to but not the principal factor or consideration in

productivity in this industry. Including backyard raisers, about

80% of those in commercial livestock and poultry production

occupy five hectares or less. The remaining 20% are mostly

corporate farms (Rollo, p. 11).

On the other hand, the public respondent argued that livestock

and poultry raising is embraced in the term "agriculture" and the

inclusion of such enterprise under Section 3(b) of R.A. 6657 is

proper. He cited that Webster's International Dictionary, Second

Edition (1954), defines the following words:

"Agriculture the art or science of cultivating the ground and

raising and harvesting crops, often, including also, feeding,

breeding and management of livestock, tillage, husbandry,

farming.

It includes farming, horticulture, forestry, dairying, sugarmaking

. . .

Livestock domestic animals used or raised on a farm,

especially for profit.

Farm a plot or tract of land devoted to the raising of domestic

or other animals." (Rollo, pp. 82-83).

The petition is impressed with merit.

The question raised is one of constitutional construction. The

primary task in constitutional construction is to ascertain and

thereafter assure the realization of the purpose of the framers in

the adoption of the Constitution (J.M. Tuazon & Co. vs. Land

Tenure Administration, 31 SCRA 413 [1970]).: rd

Ascertainment of the meaning of the provision of Constitution

begins with the language of the document itself. The words

used in the Constitution are to be given their ordinary meaning

except where technical terms are employed in which case the

significance thus attached to them prevails (J.M. Tuazon & Co.

vs. Land Tenure Administration, 31 SCRA 413 [1970]).

It is generally held that, in construing constitutional provisions

which are ambiguous or of doubtful meaning, the courts may

consider the debates in the constitutional convention as

throwing light on the intent of the framers of the Constitution. It

is true that the intent of the convention is not controlling by

itself, but as its proceeding was preliminary to the adoption by

the people of the Constitution the understanding of the

convention as to what was meant by the terms of the

constitutional provision which was the subject of the

deliberation, goes a long way toward explaining the

understanding of the people when they ratified it (Aquino, Jr. v.

Enrile, 59 SCRA 183 [1974]).

The transcripts of the deliberations of the Constitutional

Commission of 1986 on the meaning of the word "agricultural,"

clearly show that it was never the intention of the framers of the

Constitution to include livestock and poultry industry in the

coverage of the constitutionally-mandated agrarian reform

program of the Government.

The Committee adopted the definition of "agricultural land" as

defined under Section 166 of R.A. 3844, as laud devoted to any

growth, including but not limited to crop lands, saltbeds,

fishponds, idle and abandoned land (Record, CONCOM,

August 7, 1986, Vol. III, p. 11).

The intention of the Committee is to limit the application of the

word "agriculture." Commissioner Jamir proposed to insert the

word "ARABLE" to distinguish this kind of agricultural land from

such lands as commercial and industrial lands and residential

properties because all of them fall under the general

classification of the word "agricultural". This proposal, however,

was not considered because the Committee contemplated that

agricultural lands are limited to arable and suitable agricultural

lands and therefore, do not include commercial, industrial and

residential lands (Record, CONCOM, August 7, 1986, Vol. III, p.

30).

In the interpellation, then Commissioner Regalado (now a

Supreme Court Justice), posed several questions, among

others, quoted as follows:

x x x

"Line 19 refers to genuine reform program founded on the

primary right of farmers and farmworkers. I wonder if it means

that leasehold tenancy is thereby proscribed under this

provision because it speaks of the primary right of farmers and

farmworkers to own directly or collectively the lands they till. As

also mentioned by Commissioner Tadeo, farmworkers include

those who work in piggeries and poultry projects.

I was wondering whether I am wrong in my appreciation that if

somebody puts up a piggery or a poultry project and for that

purpose hires farmworkers therein, these farmworkers will

automatically have the right to own eventually, directly or

ultimately or collectively, the land on which the piggeries and

poultry projects were constructed. (Record, CONCOM, August

2, 1986, p. 618).

x x x

The questions were answered and explained in the statement of

then Commissioner Tadeo, quoted as follows:

x x x

"Sa pangalawang katanungan ng Ginoo ay medyo hindi kami

nagkaunawaan. Ipinaaalam ko kay Commissioner Regalado na

hindi namin inilagay ang agricultural worker sa kadahilanang

kasama rito ang piggery, poultry at livestock workers. Ang

inilagay namin dito ay farm worker kaya hindi kasama ang

piggery, poultry at livestock workers (Record, CONCOM,

August 2, 1986, Vol. II, p. 621).

It is evident from the foregoing discussion that Section II of R.A.

6657 which includes "private agricultural lands devoted to

commercial livestock, poultry and swine raising" in the definition

of "commercial farms" is invalid, to the extent that the aforecited

agro-industrial activities are made to be covered by the agrarian

reform program of the State. There is simply no reason to

include livestock and poultry lands in the coverage of agrarian

reform. (Rollo, p. 21).

Hence, there is merit in Luz Farms' argument that the

requirement in Sections 13 and 32 of R.A. 6657 directing

"corporate farms" which include livestock and poultry raisers to

execute and implement "production-sharing plans" (pending

final redistribution of their landholdings) whereby they are called

upon to distribute from three percent (3%) of their gross sales

and ten percent (10%) of their net profits to their workers as

additional compensation is unreasonable for being confiscatory,

and therefore violative of due process (Rollo, p. 21).:-cralaw

It has been established that this Court will assume jurisdiction

over a constitutional question only if it is shown that the

essential requisites of a judicial inquiry into such a question are

first satisfied. Thus, there must be an actual case or controversy

involving a conflict of legal rights susceptible of judicial

determination, the constitutional question must have been

opportunely raised by the proper party, and the resolution of the

question is unavoidably necessary to the decision of the case

itself (Association of Small Landowners of the Philippines, Inc.

v. Secretary of Agrarian Reform, G.R. 78742; Acuna v. Arroyo,

G.R. 79310; Pabico v. Juico, G.R. 79744; Manaay v. Juico,

G.R. 79777, 14 July 1989, 175 SCRA 343).

However, despite the inhibitions pressing upon the Court when

confronted with constitutional issues, it will not hesitate to

declare a law or act invalid when it is convinced that this must

be done. In arriving at this conclusion, its only criterion will be

the Constitution and God as its conscience gives it in the light to

probe its meaning and discover its purpose. Personal motives

and political considerations are irrelevancies that cannot

influence its decisions. Blandishment is as ineffectual as

intimidation, for all the awesome power of the Congress and

Executive, the Court will not hesitate "to make the hammer fall

heavily," where the acts of these departments, or of any official,

betray the people's will as expressed in the Constitution

(Association of Small Landowners of the Philippines, Inc. v.

Secretary of Agrarian Reform, G.R. 78742; Acuna v. Arroyo,

G.R. 79310; Pabico v. Juico, G.R. 79744; Manaay v. Juico,

G.R. 79777, 14 July 1989).

Thus, where the legislature or the executive acts beyond the

scope of its constitutional powers, it becomes the duty of the

judiciary to declare what the other branches of the government

had assumed to do, as void. This is the essence of judicial

power conferred by the Constitution "(I)n one Supreme Court

and in such lower courts as may be established by law" (Art.

VIII, Section 1 of the 1935 Constitution; Article X, Section I of

the 1973 Constitution and which was adopted as part of the

Freedom Constitution, and Article VIII, Section 1 of the 1987

Constitution) and which power this Court has exercised in many

instances (Demetria v. Alba, 148 SCRA 208 [1987]).

PREMISES CONSIDERED, the instant petition is hereby

GRANTED. Sections 3(b), 11, 13 and 32 of R.A. No. 6657

insofar as the inclusion of the raising of livestock, poultry and

swine in its coverage as well as the Implementing Rules and

Guidelines promulgated in accordance therewith, are hereby

DECLARED null and void for being unconstitutional and the writ

of preliminary injunction issued is hereby MADE permanent.

SO ORDERED.

CASE DIGEST #7

Luz Farms (petitioner) vs. Secretary of the Department of

Agrarian Reform (respondent) G.R. No. 86889. December 4,

1990

Ponente:

Facts:

This is a petition for prohibition with prayer for restraining order

and/or preliminary and permanent injunction against the

Honorable Secretary of the Department of Agrarian Reform for

acting without jurisdiction in enforcing the assailed provisions of

R.A. No. 6657, otherwise known as the Comprehensive

Agrarian Reform Law of 1988 and in promulgating the

Guidelines and Procedure Implementing Production and Profit

Sharing under R.A. No. 6657, insofar as the same apply to

herein petitioner, and further from performing an act in violation

of the constitutional rights of the petitioner. On June 10,1988,

the President of the Philippines approved R.A. No. 6657, which

includes the raising of livestock, poultry and swine in its

coverage (Rollo, p. 80). On January 2, 1989, the Secretary of

Agrarian Reform promulgated the Guidelines and Procedures

Implementing Production and Profit Sharing as embodied in

Sections 13 and 32 of R.A. No. 6657 (Rollo, p. 80). On January

9, 1989, the Secretary of Agrarian Reform promulgated its

Rules and Regulations implementing Section 11 of R.A. No.

6657. Luz Farms, petitioner in this case, is a corporation

engaged in the livestock and poultry business and together with

others in the same business allegedly stands to be adversely

affected by the enforcement of Section 3(b), Section 11, Section

13, Section 16(d) and 17 and Section 32 of R.A. No. 6657

otherwise known as Comprehensive Agrarian Reform Law and

of the Guidelines and Procedures Implementing Production and

Profit Sharing under R.A. No. 6657 promulgated on January

2,1989 and the Rules and Regulations Implementing Section 11

thereof as promulgated by the DAR on January 9,1989.

Issue:

Whether or not the Sections 3(b), 11, 13 and 32 of R.A. No.

6657 (the Comprehensive Agrarian Reform Law of 1988) is

constitutional.

Held:

Sec. 3 (b) and Sec. 11 of RA 6657 are unconstitutional i n so far as they

include lands devoted to ra ising livestock, swine and poultry within its

coverage. The use of land is incidental to but not the principal factor

or cons ideration of productivity in this industry.

The Supreme Court held that:

The transcripts of deliberations of the Constitutional Commission of

1986 on the meaning of the word "agricultural," clearly show that it

was never the intention of the framers of the Constitution to include

l ivestock and poultry industry in the coverage of the constitutionally-

mandated agrarian reform program of the government.

The Committee adopted the definition of "agricultural land" as

defined under Section 166 of RA 3844, as land devoted to any

growth, including but not limited to crop lands, saltbeds, fishponds,

idle and abandoned land (Record, CONCOM, August 7, 1986, Vol . I II,

p. 11).

The Supreme Court noted that the intention of the Committee to

l imit the application of the word "agriculture" is further shown by the

proposal of Commissioner Jamir to insert the word "arable" to

dis tinguish this kind of agricultural land from such lands as

commercial and industrial lands and residential properties. The

proposal, however, was not considered because the Committee

contemplated that agricultural lands are limited to arable and

sui table agricultural lands and therefore, do not include commercial,

industrial and residential lands (Record, CONCOM, 7 August 1986,

Vol . I I I, p. 30).

Moreover, in his answer to Commissioner Regalado's interpellation,

Commissioner Tadeo clarified that the term "farmworker" was used

instead of "agricultural worker" in order to exclude therein piggery,

poultry and l ivestock workers (Record, CONCOM, August 2, 1986, Vol.

I I , p. 621).

SPECIAL FIRST DIVISION

[G.R. No. 112526. March 16, 2005]

STA. ROSA REALTY DEVELOPMENT CORPORATION,

petitioner, vs. JUAN B. AMANTE, FRANCISCO L. ANDAL

etc respondents.

[G.R. No. 118838. March 16, 2005]

JUAN B. AMANTE, IGNACIO PETATE, DOMINGO CANUBAS,

FLORENCIO CANUBAS, CRESENCIO AMANTE, etc

respondents.

A M E N D E D D E C I S I O N

AUSTRIA-MARTINEZ, J.:

By virtue of the En Banc Resolution issued on January 13,

2004, the Court authorized the Special First Division to suspend

the Rules so as to allow it to consider and resolve the second

Motion for Reconsideration of respondents,[1] after the motion

was heard on oral arguments on August 13, 2003. On July 9,

2004,[2] the Court resolved to submit for resolution the second

Motion for Reconsideration in G.R. No. 112526 together with

G.R. No. 118338 in view of the Resolution of the Court dated

January 15, 2001 issued in G.R. No. 118838,[3] consolidating

the latter case with G.R. No. 112526, the issues therein being

interrelated.[4] Hence, the herein Amended Decision.

The factual background of the two cases is as follows:

The Canlubang Estate in Laguna is a vast landholding

previously titled in the name of the late Speaker and Chief

Justice Jose Yulo, Sr. Within this estate are two parcels of land

(hereinafter referred to as the subject property) covered by TCT

Nos. 81949 and 84891 measuring 254.766 hectares and part of

Barangay Casile, subsequently titled in the name of Sta. Rosa

Realty Development Corporation (SRRDC), the majority

stockholder of which is C.J. Yulo and Sons, Inc.

The subject property was involved in civil suits and

administrative proceedings that led to the filing of G.R. Nos.

112526 and 118838, thus:

Injunction Case Filed by Amante, et al.

On December 6, 1985, Amante, et al., who are the private

respondents in G.R. No. 112526 and petitioners in G.R. No.

118838, instituted an action for injunction with damages in the

Regional Trial Court of Laguna (Branch 24) against Luis Yulo,

SRRDC, and several SRRDC security personnel, docketed as

Civil Case No. B-2333. Amante, et al. alleged that: they are

residents of Barangay Casile, Cabuyao, Laguna, which covers

an area of around 300 hectares; in 1910, their ancestors started

occupying the area, built their houses and planted fruit-bearing

trees thereon, and since then, have been peacefully occupying

the land; some time in June 3, 1985, SRRDCs security people

illegally entered Bgy. Casile and fenced the area; SRRDCs men

also entered the barangay on November 4, 1985, cut down the

trees, burned their huts, and barred the lone jeepney from

entering the Canlubang Sugar Estate; as a result of these acts,

Amante, et al. were deprived of possession and cultivation of

their lands. Thus, they claimed damages, sought the issuance

of permanent injunction and proposed that a right of way be

declared.[5]

In their Answer, the defendants denied the allegations and

disclaimed any control and supervision over its security

personnel. Defendant SRRDC also alleged that as the real

owner of the property, it was the one that suffered damages due

to the encroachment on the property.[6]

A writ of preliminary injunction was issued by the trial court on

August 17, 1987,[7] but this was subsequently dissolved by the

Court of Appeals (CA) on April 22, 1988 in its decision in CA-

G.R. SP No. 13908.[8]

After trial on the merits, the trial court, on January 20, 1992,

rendered a decision ordering Amante, et al. to vacate the

property, the dispositive portion of which reads:

WHEREFORE, premises considered, judgment is hereby

rendered in favor of the defendants and against the plaintiffs

hereby dismissing the complaint and amended complaint.

The plaintiffs are hereby ordered to vacate the parcels of land

belonging to the defendants Luis Yulo and Sta. Rosa Realty.

They are likewise enjoined from entering the subject parcels of

land.

Although attorneys fees and expenses of litigation are

recoverable in case of a clearly unfounded civil action against

the plaintiff (Enervida vs. De la Torre, 55 SCRA 339), this Court

resolves not to award attorneys fees etc. in favor of the

defendants because the plaintiffs appear to have acted in good

faith in filing the present civil action (Salao vs. Salao, 70 SCRA

65) and that it would not be just and equitable to award the

same in the case at bar. (Liwanag vs. Court of Appeals, 121

SCRA 354) Accordingly, the other reliefs prayed for by the

defendants are hereby dismissed.

SO ORDERED.[9]

Amante, et al. appealed the aforesaid decision to the CA,

docketed as CA-G.R. CV No. 38182.

On June 28, 1994, the CA affirmed with modification the

decision of the trial court in the injunction case. The dispositive

portion of the appellate courts decision[10] reads as follows:

WHEREFORE, the judgment herein appealed from is hereby

AFFIRMED, with the modification that the defendants-appellees

are hereby ordered, jointly and severally, to pay the plaintiffs -

appellants nominal damages in the amount of P5,000.00 per

plaintiff. No pronouncement as to costs.

SO ORDERED.[11]

Nominal damages were awarded by the CA because it found

that SRRDC violated Amante, et al.s rights as possessors of the

subject property.[12]

Amante, et al. filed a motion for reconsideration thereof,

pointing out the DARABs decision placing the property under

compulsory acquisition, and the CA decision in CA-G.R. SP No.

27234, affirming the same.[13] The CA, however, denied the

motion, with the modification that only SRRDC and the

defendants-security guards should be held jointly and severally

liable for the nominal damages awarded. It also made the

clarification that the decision should not preempt any judgment

or prejudice the right of any party in the agrarian reform case

pending before the Supreme Court (G.R. No. 112526).[14]

Thus, Amante, et al. filed on March 2, 1995, herein petition,

docketed as G.R. No. 118838 on the following grounds:

4.1. THE COURT OF APPEALS DECIDED THE CASE

CONTRARY TO LAW OR APPLICABLE SUPREME COURT

DECISIONS BECAUSE:

4.1.1 FIRST, PETITIONERS MAY NOT BE LAWFULLY

EVICTED FROM THEIR LANDHOLDINGS CONSIDERING

THAT:

-- (A) PETITIONERS ARE ALREADY THE REGISTERED

OWNERS UNDER THE TORRENS SYSTEM OF THE

PROPERTIES IN QUESTION SINCE FEBRUARY 26, 1992 BY

VIRTUE OF RA 6657 OR THE COMPREHENSIVE AGRARIAN

REFORM LAW;

-- (B) THE COURT OF APPEALS HAS AFFIRMED THE

REGIONAL TRIAL COURT OF LAGUNAS DISMISSAL OF THE

EJECTMENT CASES FILED BY RESPONDENT SRRDC

AGAINST PETITIONERS; AND

-- (C) ASSUMING FOR THE SAKE OF ARGUMENT ONLY

THAT PETITIONERS ARE NOT YET THE REGISTERED

OWNERS OF THE PROPERTIES IN QUESTION,

RESPONDENTS MAY NOT RAISE THE ISSUE OF

OWNERSHIP IN THIS CASE FOR INJUNCTION WITH

DAMAGES, THE SAME TO BE VENTILATED IN A SEPARATE

ACTION, NOT IN THIS CASE BROUGHT TO PREVENT

RESPONDENTS FROM COMMITTING FURTHER ACTS OF

DISPOSSESSION [BACAR V. DEL ROSARIO ET AL., 171

SCRA 451 (1989)].

4.1.2 SECOND, PETITIONERS ARE ENTITLED TO MORAL,

EXEMPLARY DAMAGES AND ATTORNEYS FEES, INSTEAD

OF MERE NOMINAL DAMAGES, CONSIDERING THAT THE

COURT OF APPEALS FOUND RESPONDENTS TO HAVE

UNLAWFULLY AND ILLEGALLY DISTURBED PETITIONERS

PEACEFUL AND CONTINUOUS POSSESSION.[15]

Ejectment Cases Filed by SRRDC

Between October 1986 and August 1987, after the injunction

case was filed by Amante, et al., SRRDC filed with the

Municipal Trial Court (MTC) of Cabuyao, Laguna, several

complaints for forcible entry with preliminary injunction and

damages against Amante, et al., docketed as Civil Cases Nos.

250, 258, 260, 262 and 266. SRRDC alleged that some time in

July 1987, they learned that Amante, et al., without their

authority and through stealth and strategy, were clearing,

cultivating and planting on the subject property; and that despite

requests from SRRDCs counsel, Amante, et al. refused to

vacate the property, prompting them to file the ejectment

cases.[16] Amante, et al. denied that SRRDC are the absolute

owners of the property, stating that they have been in peaceful

possession thereof, through their predecessors -in-interest,

since 1910.[17]

On May 24, 1991, the MTC-Cabuyao rendered its decision in

favor of SRRDC. Amante, et al. were ordered to surrender

possession and vacate the subject property. The decision was

appealed to the Regional Trial Court of Bian, Laguna (Assisting

Court).

On February 18, 1992, the RTC dismissed the ejectment cases

on the ground that the subject property is an agricultural land

being tilled by Amante, et al., hence it is the Department of

Agrarian Reform (DAR), which has jurisdiction over the

dispute.[18] The RTCs dismissal of the complaints was brought

to the CA via a petition for review, docketed as CA-G.R. SP No.

33382.[19] In turn, the CA dismissed the petition per its

Decision dated January 17, 1995 on the ground that SRRDC

failed to show any prior physical possession of the subject

property that would have justified the filing of the ejectment

cases.[20] Also, the CA did not sustain the RTCs finding that

the subject properties are agricultural lands and Amante, et al.

are tenant/farmers thereof, as the evidence on record does not

support such finding. The parties did not file any motion for

reconsideration from the Court of Appeals dismissal, hence, it

became final and executory.[21]

Administrative Proceedings

While the injunction and ejectment cases were still in process, it

appears that in August, 1989, the Municipal Agrarian Reform

Office (MARO) issued a Notice of Coverage to SRRDC,

informing petitioners that the property covered by TCT Nos. T-

81949, T-84891 and T-92014 is scheduled for compulsory

acquisition under the Comprehensive Agrarian Reform Program

(CARP).[22] SRRDC filed its Protest and Objection with the

MARO on the grounds that the area was not appropriate for

agricultural purposes, as it was rugged in terrain with slopes of

18% and above, and that the occupants of the land were

squatters, who were not entitled to any land as

beneficiaries.[23] Thereafter, as narrated in the Decision of the

Court dated October 12, 2001 in G.R. No. 112526, the following

proceedings ensued:

On August 29, 1989, the farmer beneficiaries together with the

BARC chairman answered the protest and objection stating that

the slope of the land is not 18% but only 5-10% and that the

land is suitable and economically viable for agricultural

purposes, as evidenced by the Certification of the Department

of Agriculture, municipality of Cabuyao, Laguna.

On September 8, 1989, MARO Belen dela Torre made a

summary investigation report and forwarded the Compulsory

Acquisition Folder Indorsement (CAFI) to the Provincial

Agrarian Reform Officer (hereafter, PARO).

On September 21, 1989, PARO Durante Ubeda forwarded his

endorsement of the compulsory acquisition to the Secretary of

Agrarian Reform.

On November 23, 1989, Acting Director Eduardo C. Visperas of

the Bureau of Land Acquisition and Development, DAR

forwarded two (2) Compulsory Acquisition Claim Folders

covering the landholding of SRRDC, covered by TCT Nos. T-

81949 and T-84891 to the President, Land Bank of the

Philippines for further review and evaluation.

On December 12, 1989, Secretary of Agrarian Reform Miriam

Defensor Santiago sent two (2) notices of acquisition to

petitioner, stating that petitioners landholdings covered by TCT

Nos. T-81949 and T-84891, containing an area of 188.2858 and

58.5800 hectares, valued at P4,417,735.65 and P1,220,229.93,

respectively, had been placed under the Comprehensive

Agrarian Reform Program.

On February 6, 1990, petitioner SRRDC in two letters

separately addressed to Secretary Florencio B. Abad and the

Director, Bureau of Land Acquisition and Distribution, sent its

formal protest, protesting not only the amount of compensation

offered by DAR for the property but also the two (2) notices of

acquisition.

On March 17, 1990, Secretary Abad referred the case to the

DARAB for summary proceedings to determine just

compensation under R.A. No. 6657, Section 16.

On March 23, 1990, the LBP returned the two (2) claim folders

previously referred for review and evaluation to the Director of

BLAD mentioning its inability to value the SRRDC landholding

due to some deficiencies.

On March 28, 1990, Executive Director Emmanuel S. Galvez

wrote the Land Bank President Deogracias Vistan to forward

the two (2) claim folders involving the property of SRRDC to the

DARAB for it to conduct summary proceedings to determine the

just compensation for the land.

On April 6, 1990, petitioner sent a letter to the Land Bank of the