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1 REVIEWER (AGRARIAN REFORM LAW AND PROCEDURE) I. INTRODUCTION: A. State Policy on Agrarian Reform and Social Justice Article XIII, Sections 1, 2, 4-8 of the 1987 Constitution Section 1. The Congress shall give highest priority to the enactment of measures that protect and enhance the right of all the people to human dignity, reduce social, economic, and political inequalities, and remove cultural inequities by equitably diffusing wealth and political power for the common good. To this end, the State shall regulate the acquisition, ownership, use, and disposition of property and its increments. Section 2. The promotion of social justice shall include the commitment to create economic opportunities based on freedom of initiative and self-reliance. 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 right of small landowners. The State shall further provide incentives for voluntary land-sharing. Section 5. The State shall recognize the right of farmers, farmworkers, and landowners, as well as cooperatives, and other independent farmers' organizations to participate in the planning, organization, and management of the program, and shall provide support to agriculture through appropriate technology and research, and adequate financial, production, marketing, and other support services. Section 6. The State shall apply the principles of agrarian reform or stewardship, whenever applicable in accordance with law, in the disposition or utilization of other natural resources, including lands of the public domain under lease or concession suitable to agriculture, subject to prior rights, homestead rights of small settlers, and the rights of indigenous communities to their ancestral lands. The State may resettle landless farmers and farmworkers in its own agricultural estates which shall be distributed to them in the manner provided by law. Section 7. The State shall protect the rights of subsistence fishermen, especially of local communities, to the preferential use of the communal marine and fishing resources, both inland and offshore. It shall provide support to such fishermen through appropriate technology and research, adequate financial, production, and marketing assistance, and other services. The State shall also protect, develop, and conserve such resources. The protection shall extend to offshore fishing grounds of subsistence fishermen against foreign intrusion. Fishworkers shall receive a just share from their labor in the utilization of marine and fishing resources. Section 8. The State shall provide incentives to landowners to invest the proceeds of the agrarian reform program to promote industrialization, employment creation, and privatization of public sector enterprises. Financial instruments used as payment for their lands shall be honored as equity in enterprises of their choice. Section 2 of Republic Act (R.A) No. 6657, as amended by R.A. No. 9700 SECTION 2. Declaration of Principles and Policies. - It is the policy of the State to pursue a Comprehensive Agrarian Reform Program (CARP). The welfare of the landless farmers and farm workers will receive the highest consideration to promote social justice and to move the nation towards sound rural development and industrialization, and Prepared and Digested by; Madelyn T. Taytayon Page 1

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Page 1: AGRA Reviewer

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REVIEWER (AGRARIAN REFORM LAW AND PROCEDURE)

I. INTRODUCTION:

A. State Policy on Agrarian Reform and Social Justice

Article XIII, Sections 1, 2, 4-8 of the 1987 Constitution

Section 1. The Congress shall give highest priority to the enactment of measures that protect and enhance the right of all the people to human dignity, reduce social, economic, and political inequalities, and remove cultural inequities by equitably diffusing wealth and political power for the common good.To this end, the State shall regulate the acquisition, ownership, use, and disposition of property and its increments.

Section 2. The promotion of social justice shall include the commitment to create economic opportunities based on freedom of initiative and self-reliance.

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 right of small landowners. The State shall further provide incentives for voluntary land-sharing.

Section 5. The State shall recognize the right of farmers, farmworkers, and landowners, as well as cooperatives, and other independent farmers' organizations to participate in the planning, organization, and management of the program, and shall provide support to agriculture through appropriate technology and research, and adequate financial, production, marketing, and other support services.

Section 6. The State shall apply the principles of agrarian reform or stewardship, whenever applicable in accordance with law, in the disposition or utilization of other natural resources, including lands of the public domain under lease or concession suitable to agriculture, subject to prior rights, homestead rights of small settlers, and the rights of indigenous communities to their ancestral lands.

The State may resettle landless farmers and farmworkers in its own agricultural estates which shall be distributed to them in the manner provided by law.

Section 7. The State shall protect the rights of subsistence fishermen, especially of local communities, to the preferential use of the communal marine and fishing resources, both inland and offshore. It shall provide support to such fishermen through appropriate technology and research, adequate financial, production, and marketing assistance, and other services. The State shall also protect, develop, and conserve such resources. The protection shall extend to offshore fishing grounds of subsistence fishermen against foreign intrusion. Fishworkers shall receive a just share from their labor in the utilization of marine and fishing resources.

Section 8. The State shall provide incentives to landowners to invest the proceeds of the agrarian reform program to promote industrialization, employment creation, and privatization of public sector enterprises. Financial instruments used as payment for their lands shall be honored as equity in enterprises of their choice.

Section 2 of Republic Act (R.A) No. 6657, as amended by R.A. No. 9700

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

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

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

The State shall recognize the right of farmers, farm workers and landowners, as well as cooperatives and other independent farmers' organization, to participate in the planning, organization, and management of the program, and shall provide support to agriculture through appropriate technology and research, and adequate financial, production, marketing and other support services.chan robles virtual law library

The State shall apply the principles of agrarian reform or stewardship, whenever applicable, in accordance with law, in the disposition or utilization of other natural resources, including lands of the public domain, under lease

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or concession, suitable to agriculture, subject to prior rights, homestead rights of small settlers and the rights of indigenous communities to their ancestral lands.

The State may resettle landless farmers and farm workers in its own agricultural estates, which shall be distributed to them in the manner provided by law.

By means of appropriate incentives, the State shall encourage the formation and maintenance of economic-sized family farms to be constituted by individual beneficiaries and small landowners.

The State shall protect the rights of subsistence fishermen, especially of local communities, to the preferential use of communal marine and fishing resources, both inland and offshore. It shall provide support to such fishermen through appropriate technology and research, adequate financial, production and marketing assistance and other services, The State shall also protect, develop and conserve such resources. The protection shall extend to offshore fishing grounds of subsistence fishermen against foreign intrusion. Fishworkers shall receive a just share from their labor in the utilization of marine and fishing resources.

The State shall be guided by the principles that land has a social function and land ownership has a social responsibility. Owners of agricultural land have the obligation to cultivate directly or through labor administration the lands they own and thereby make the land productive.

The State shall provide incentives to landowners to invest the proceeds of the agrarian reform program to promote industrialization, employment and privatization of public sector enterprises. Financial instruments used as payment for lands shall contain features that shall enhance negotiability and acceptability in the marketplace.

The State may lease undeveloped lands of the public domain to qualified entities for the development of capital-intensive farms, traditional and pioneering crops especially those for exports subject to the prior rights of the beneficiaries under this Act.

Roxas and Company, Inc. vs. DAMBA-NSFW and DAR

FACTS:

Roxas & Co. is a domestic corporation and is the registered owner of three haciendas. On July 27, 1987, the Congress of the Philippines formally convened and took over legislative power from the President. This Congress passed Republic Act No. 6657, the Comprehensive Agrarian Reform Law (CARL) of 1988. The Act was signed by the President on June 10, 1988 and took effect on June 15, 1988. Before the law’s effectivity, on May 6, 1988, [Roxas & Co.] filed with respondent DAR a voluntary offer to sell [VOS] Hacienda Caylaway   pursuant to the provisions of E.O. No. 229. Haciendas Palico and Banilad were later placed under compulsory acquisition by … DAR in accordance with the CARL. On August 6, 1992, [Roxas & Co.], through its President, sent a letter to the Secretary of …DAR withdrawing its VOS   of Hacienda Caylaway. The Sangguniang Bayan of Nasugbu, Batangas allegedly authorized the reclassification of Hacienda Caylaway from agricultural to non-agricultural. As a result, petitioner informed respondent DAR that it was applying for conversion of Hacienda Caylaway from agricultural to other uses.

The petitions nub on the interpretation of Presidential Proclamation (PP) 1520 reads: DECLARING THE MUNICIPALITIES OF MARAGONDON AND TERNATE IN CAVITE PROVINCE AND THE MUNICIPALITY OF NASUGBU IN BATANGAS AS A TOURIST ZONE, AND FOR OTHER PURPOSES

Essentially, Roxas & Co. filed its application for conversion of its three haciendas from agrricultural to non-agricultural on the assumption that the issuance of PP 1520 which declared Nasugbu, Batangas as a tourism zone, reclassified them to non-agricultural uses. Its pending application notwithstanding, the Department of Agrarian Reform (DAR) issued Certificates of Land Ownership Award (CLOAs) to the farmer-beneficiaries in the three haciendas including CLOA No. 6654 which was issued on October 15, 1993 covering 513.983 hectares, the subject of G.R. No. 167505. Roxas & Co. filed with the DAR an application for exemption from the coverage of the Comprehensive Agrarian Reform Program (CARP) of 1988 on the basis of PP 1520 and of DAR Administrative Order (AO) No. 6, Series of 19943 which states that all lands already classified as commercial, industrial, or residential before the effectivity of CARP no longer need conversion clearance from the DAR.

ISSUES: Whether PP 1520 reclassified in 1975 all lands in the Maragondon-Ternate-Nasugbu tourism zone to non-agricultural use to exempt Roxas & Co.’s three haciendas in Nasugbu from CARP coverage;

RULING:

PP 1520 DID NOT AUTOMATICALLY CONVERT THE AGRICULTURAL LANDS IN THE THREE MUNICIPALITIES INCLUDING NASUGBU TO NON-AGRICULTURAL LANDS.

Roxas & Co. contends that PP 1520 declared the three municipalities as each constituting a tourism zone, reclassified all lands therein to tourism and, therefore, converted their use to non-agricultural purposes.

The perambulatory clauses of PP 1520 identified only "certain areas in the sector comprising the [three Municipalities that] have potential tourism value" and mandated the conduct of "necessary studies" and the segregation of "specific geographic areas" to achieve its purpose. Which is why the PP directed the Philippine Tourism Authority (PTA) to identify what those potential tourism areas are. If all the lands in those tourism zones were to be wholly converted to non-agricultural use, there would have been no need for the PP to direct the PTA to identify what those "specific geographic areas" are.

In the above-cited case of Roxas & Co. v. CA,9 the Court made it clear that the "power to determine whether Haciendas Palico, Banilad and Caylaway are non-agricultural, hence, exempt from the coverage of the [Comprehensive Agrarian Reform Law] lies with the [Department of Agrarian Reform], not with this Court." The DAR, an administrative body of special competence, denied, by Order, the application for CARP exemption of Roxas & Co., it finding that PP 1520 did not automatically reclassify all the lands in the affected municipalities from their original uses. It appears that the PTA had not yet, at that time, identified the "specific geographic

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areas" for tourism development and had no pending tourism development projects in the areas. Further, report from the Center for Land Use Policy Planning and Implementation (CLUPPI) indicated that the areas were planted with sugar cane and other crops.11

Relatedly, the DAR, by Memorandum Circular No. 7, Series of 2004,12 came up with clarificatory guidelines and therein decreed that

B. Proclamations declaring general areas such as whole provinces, municipalities, barangays, islands or peninsulas as tourist zones that merely:

(1) recognize certain still unidentified areas within the covered provinces, municipalities, barangays, islands, or peninsulas to be with potential tourism value and charge the Philippine Tourism Authority with the task to identify/delineate specific geographic areas within the zone with potential tourism value and to coordinate said areas’ development; or

(2) recognize the potential value of identified spots located within the general area declared as tourist zone (i.e. x x x x) and direct the Philippine Tourism Authority to coordinate said areas’ development;

could not be regarded as effecting an automatic reclassification of the entirety of the land area declared as tourist zone. This is so because "reclassification of lands" denotes their allocation into some specific use and "providing for the manner of their utilization and disposition (Sec. 20, Local Government Code) or the "act of specifying how agricultural lands shall be utilized for non-agricultural uses such as residential, industrial, or commercial, as embodied in the land use plan." A proclamation that merely recognizes the potential tourism value of certain areas within the general area declared as tourist zone clearly does not allocate, reserve, or intend the entirety of the land area of the zone for non-agricultural purposes. Neither does said proclamation direct that otherwise CARPable lands within the zone shall already be used for purposes other than agricultural.

Moreover, to view these kinds of proclamation as a reclassification for non-agricultural purposes of entire provinces, municipalities, barangays, islands, or peninsulas would be unreasonable as it amounts to an automatic and sweeping exemption from CARP in the name of tourism development. The same would also undermine the land use reclassification powers vested in local government units in conjunction with pertinent agencies of government.

C. There being no reclassification, it is clear that said proclamations/issuances, assuming [these] took effect before June 15, 1988, could not supply a basis for exemption of the entirety of the lands embraced therein from CARP coverage

D. The DAR’s reading into these general proclamations of tourism zones deserves utmost consideration, more especially in the present petitions which involve vast tracts of agricultural land. To reiterate,  PP 1520 merely recognized the "potential tourism value" of certain areas within the general area declared as tourism zones. It did not reclassify the areas to non-agricultural use.

A mere reclassification of an agricultural land does not automatically allow a landowner to change its use since there is still that process of conversion before one is permitted to use it for other purposes.

B. Concept of an Emancipation Patent

Presidential Decree (P.D.) No. 27 (1972)

DECREEING THE EMANCIPATION OF TENANTS FROM THE BONDAGE OF THE SOIL, TRANSFERRING TO THEM THE OWNERSHIP OF THE LAND THEY TILL AND PROVIDING THE INSTRUMENTS AND MECHANISM THEREFOR

In as much as the old concept of land ownership by a few has spawned valid and legitimate grievances that gave rise to violent conflict and social tension,

The redress of such legitimate grievances being one of the fundamental objectives of the New Society,

Since Reformation must start with the emancipation of the tiller of the soil from his bondage,

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution as Commander-in-Chief of all the Armed Forces of the Philippines, and pursuant to Proclamation No. 1081, dated September 21, 1972, and General Order No. 1 dated September 22, 1972, as amended do hereby decree and order the emancipation of all tenant farmers as of this day, October 21, 1972:

This shall apply to tenant farmers of private agricultural lands primarily devoted to rice and corn under a system of sharecrop or lease-tenancy, whether classified as landed estate or not;

The tenant farmer, whether in land classified as landed estate or not, shall be deemed owner of a portion constituting a family-size farm of five (5) hectares if not irrigated and three (3) hectares if irrigated;

In all cases, the landowner may retain an area of not more than seven (7) hectares if such landowner is cultivating such area or will now cultivate it;

For the purpose of determining the cost of the land to be transferred to the tenant-farmer pursuant to this Decree, the value of the land shall be equivalent to two and one-half (2 1/2) times the average harvest of three normal crop years immediately preceding the promulgation of this Decree;

The total cost of the land, including interest at the rate of six (6) per centum per annum, shall be paid by the tenant in fifteen (15) years of fifteen (15) equal annual amortizations;

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In case of default, the amortization due shall be paid by the farmers' cooperative in which the defaulting tenant-farmer is a member, with the cooperative having a right of recourse against him;

The government shall guaranty such amortizations with shares of stock in government-owned and government-controlled corporations;

No title to the land owned by the tenant-farmers under this Decree shall be actually issued to a tenant-farmer unless and until the tenant-farmer has become a full-fledged member of a duly recognized farmer's cooperative;

Title to land acquired pursuant to this Decree or the Land Reform Program of the Government shall not be transferable except by hereditary succession or to the Government in accordance with the provisions of this Decree, the Code of Agrarian Reforms and other existing laws and regulations;

The Department of Agrarian Reform through its Secretary is hereby empowered to promulgate rules and regulations for the implementation of this Decree.

All laws, executive orders, decrees and rules and regulations, or parts thereof, inconsistent with this Decree are hereby repealed and or modified accordingly.

Done in the City of Manila, this 21st day of October, in the year of Our Lord, nineteen hundred and seventy-two.

PRESIDENTIAL DECREE No. 266 August 4, 1973

PROVIDING FOR THE MECHANICS OF REGISTRATION OF OWNERSHIP AND/OR TITLE TO LAND UNDER PRESIDENTIAL DECREE NO. 27

WHEREAS, the present laws do not adequately provide for a method of registering the ownership of tenant-farmers covered by Presidential Decree No. 27, and

WHEREAS, there is urgent need of registering such rights to prevent confusion in land titles;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers in me vested by the Constitution as Commander-in-Chief of all the Armed Forces of the Philippines, and pursuant to Proclamation No. 1081, dated September 21, 1972, and General Order No. 1, dated September 22, 1972, as amended, do hereby decree and order the registration of said rights in the following manner;

Section 1. All Land Transfer Certificates issued pursuant to Presidential Decree No. 27 shall be filed by the Department of Agrarian Reform and recorded with the Land Registration Commission and forthwith the letter shall transmit a copy thereof to the Register of Deeds of the province or city where the land lies. When involving registered land, the Department of Agrarian Reform shall indicate the number of the corresponding original or transfer certificate of title.

Upon receipt of the copy of the Land Transfer Certificate, the Register of Deeds concerned shall record it in the primary entry book and annotate a memorandum thereof in the corresponding certificate of title covering the land, without need of prior surrender of the owner's duplicate certificate of title. It shall be the duty of the Register of Deeds to notify the registered owner concerned of such fact within a reasonable time. If the land involved is not registered under the Torrens System, the Register of Deeds shall record the Land Transfer Certificate in the primary entry book and in the registration book made and provided for unregistered lands under Act 3344.

Section 2. After the tenant-farmer shall have fully complied with the requirements for a grant of title under Presidential Decree No. 27, an Emancipation Patent and/or Grant shall be issued by the Department of Agrarian Reform on the basis of a duly approved survey plan.

If the land is previously registered under the Torrens System, the Emancipation Patent and/or Grant, if filed with the Register of Deeds, shall constitute conclusive authority for him to enter a transfer certificate of title in accordance with such patent and/or grant: Provided, however, That the Register of Deeds, before cancelling the original of the certificate of title and issuing a new one in favor of the grantee, shall require the registered owner or the party in possession thereof to surrender for cancellation the owner's duplicate within a reasonable period; and Provided, further, That if the owner or party withholding such duplicate certificate shall refuse or fail to surrender the same within thirty (30) days from and after the date of receipt of the proper notice, the Register of Deeds shall be authorized to cancel the original as well as the owner's duplicate certificate of title and issue in lieu thereof a new one, with the corresponding owner's duplicate, in favor of the grantee.

If the patent or grant affects unregistered lands previously recorded under Section one, the filing of the Emancipation Patent and/or Grant with the Register of Deeds for the province or city where the land is situated, shall forthwith bring the land under the operation of Act 496, as amended, and the same shall thenceforth be considered registered lands. It shall thus be the duty of the Register of Deeds, after the entry of the patent and/or grant in the corresponding registration book, to enter an original certificate of title for such registered land, and issue an owner's duplicate certificate to the grantee.

Section 3. No fee, premium, or tax of any kind shall be charged or imposed in connection with the issuance and registration of documents and titles, nor shall postage dues and mailing charges be required in all matters connected with the implementation of this Decree.

Done in the City of Manila, this 4th day of August, in the year of Our Lord, nineteen hundred and seventy-three.

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Spouses Castellano vs. Spouses Francisco (GR No. 155640)

FACTS:

Since 1955, spouses Francisco had been in possession of a parecel of land in Nueva Ecija. In 1976, pursuant to PD No. 27, respondent Florentino Francisco (Florentino) was issued Certificate of Land Transfer. Spouses Francisco alleged that in 1989, due to extreme poverty, they borrowed P50,000 from petitioner Eugenia Castellano (Eugenia) and, in return, Eugenia would cultivate and possess the property until full payment of the loan. Spouses Francisco promised to pay within three years or until 1992. Their agreement was not reduced into writing. According to spouses Francisco, in the latter part of 1992, they offered to pay the loan but Eugenia refused to accept payment. Spouses Francisco later learned that Eugenia was able to secure Emancipation Patent No. 489877 and Transfer Certificate of Title in the name of Erlaine, Eugenia's son.

In 1997, spouses Francisco filed a petition for cancellation of Erlaine's emancipation patent before the DARAB. Spouses Francisco claimed that ownership of the lot was transferred in Erlaine's name without their knowledge and consent. Spouses Francisco asserted that all the documents necessary for the valid transfer of rights were fabricated and falsified. [7]

In their answer, the Castellanos stated that spouses Francisco later informed them that they would no longer redeem the land. A transfer action was later initiated by the Department of Agrarian Reform (DAR) Team Office and, on 15 October 1992, the Regional Director of the DAR, Region III, issued an order approving the transfer action in favor of Erlaine. The Castellanos denied that there was fraud and maintained that the standard procedure for a transfer action was followed.

Regional Adjudicator ruled in favor of the Castellanos. It ruled that there were no irregularities in the transfer proceedings leading to the issuance of Erlaine's emancipation patent. The Regional Adjudicator declared that the waiver of rights executed by Florentino and his heirs, duly acknowledged before a notary public, enjoyed the presumption of regularity and validity. No evidence was presented to contradict the same. The mistake in the status of Florentino describing him as a widower was a mere oversight which Estelita Francisco later on ratified.

Spouses Francisco appealed the decision to the DARAB. DARAB dismissed the appeal for lack of merit and affirmed the Regional Adjudicator's Decision. DARAB stated that it is the issuance of the emancipation patent in favor of the tenant beneficiary that vests him with absolute ownership of the land. The DARAB ruled that, with the issuance of Erlaine's emancipation patent, Erlaine had a superior right over spouses Francisco, who were mere holders of a certificate of land transfer. The DARAB also stated that the issuance of Erlaine's emancipation patent enjoyed the presumption of regularity and validity that is not overcome by the filing of an information for falsification of public document.

Spouses Francisco appealed to the Court of Appeals. CA reversed DARAB’s decision. The Court of Appeals ruled that Erlaine's emancipation patent should be canceled because it was issued in violation of PD No. 27. Under PD No. 27, spouses Francisco could not make any valid form of transfer except to the government or, by hereditary succession, to their heirs. Since the basis for the transfer action and the issuance of Erlaine's emancipation patent was spouses Francisco's alienation of their possessory right in favor of Erlaine, the transaction is void.

ISSUES: Whether Erlaine's emancipation patent is valid.

RULING: Erlaine's emancipation patent is valid

The Court of Appeals ruled that Erlaine's emancipation patent was void and should be canceled because spouses Francisco could not validly transfer ownership of the land to Erlaine. The Court of Appeals ruled that spouses Francisco's transfer of the rights or possession to the Castellanos violated PD No. 27 and is therefore void. Indeed, the sale or transfer of rights over a property covered by a certificate of land transfer is void except when the alienation is made in favor of the government or through hereditary succession. In this case, however, the Court of Appeals failed to consider that the basis for the issuance of Erlaine's emancipation patent was Florentino's voluntary surrender of the land to the Samahang Nayon, which qualifies as surrender or transfer to the government.

Petitioner's voluntary surrender to the Samahang Nayonqualifies as a surrender or transfer to the government because such action forms part of the mechanism for the disposition and the reallocation of farmholdings to tenant-farmers who refuse to become beneficiaries of PD 27. Under Memorandum Circular No. 8-80 of the then Ministry of Agrarian Reform, the Samahan shall, upon notice from the agrarian reform team leader, recommend other tenant-farmers who shall be substituted to all rights and obligations of the abandoning or surrendering tenant-farmer.

In this case, Florentino's intention to surrender the land to the Samahang Nayon was clear. He executed a waiver of rights and voluntarily surrendered ownership over the land to the Samahang Nayon which in return, Samahang Nayon issued Resolution No. 6 acknowledging Florentino's surrender of the land and recommending three farmers, including Erlaine, to the DAR as agrarian reform beneficiaries. Florentino executed anothersalaysay stating that he had no objection to the transfer of the land in Erlaine's name because he already returned the land to the government. The records also show that the proper transfer action was undertaken. Therefore, Erlaine's emancipation patent is valid since it was issued pursuant to Florentino's voluntary surrender of the land to the Samahang Nayon, not pursuant to spouses Francisco's alienation of their possessory right to Eugenia.

II. ON TENANCY RELATIONS

A. Requisites of Tenancy Relations

(G.R. No. 108941) BEJASA vs. CA

FACTS:

This case involves two (2) parcels of land in Oriental Mindoro. The parcels of land are indisputably owned by Isabel Candelaria. On October 20, 1974, Candelaria entered into a three-year lease agreement over the land with Pio Malabanan (hereinafter referred to as "Malabanan"). In the contract, Malabanan agreed among other things: "to clear, clean and cultivate the land, to purchase or procure calamansi, citrus and rambutan seeds or seedlings, to attend and care for whatever plants are thereon existing, to make the necessary harvest of fruits, etc. Malabanan hired the Bejasas to plant on the land and to clear it. The Bejasas claim that they planted citrus,  calamansi, rambutan and banana trees on the land and shouldered all expenses of production.

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Candelaria gave Malabanan a six-year usufruct over the land, modifying their first agreement. As per the agreement, Malabanan was under no obligation to share the harvests with Candelaria. In 1983, Malabanan died. Candelaria constituted respondent Jaime Dinglasan (hereinafter referred to as "Jaime) as her attorney-in-fact, having powers of administration over the disputed land. Candelaria entered into a new lease contract over the land with Victoria Dinglasan, Jaime's wife with a term of one year. Bejasas agreed to pay Victoria rent of P15,000.00 in consideration of an "aryenduhan" or "pakyaw na bunga"13 agreement, with a term of one year. The agreement is below quoted:14

During the first week of December 1984, the Bejasas paid Victoria P7,000.00 as agreed. The balance of P8,000.00 was not fully paid. Only the amount of P4,000.00 was paid on January 11, 1985. After the aryenduhan expired, despite Victoria's demand to vacate the land, the Bejasas continued to stay on the land and did not give any consideration for its use, be it in the form of rent or a shared harvest.

Candelaria and the Dinglasans again entered into a three-year lease agreement over the land. The special power of attorney in favor of Jaime was also renewed by Candelaria on the same date. Jaime filed a complaint before the Commission on the Settlement of Land Problems ("COSLAP"), seeking ejectment of the Bejasas. COSLAP dismissed the complaint.

Jaime filed a complaint with the RTC against the Bejasas for "Recovery of possession with preliminary mandatory injunction and damages." The case was referred to the Department of Agrarian Reform ("DAR"). DAR certified that the case was not proper for trial before the civil courts. The trial court dismissed Jaime's complaint, including the Bejasas' counterclaim for leasehold, home lot and damages. Bejasas filed with the RTC a complaint for "confirmation of leasehold and home lot with recovery of damages against Isabel Candelaria and Jaime Dinglasan. Trial court ruled in favor of the Bejasas. First, they reasoned that a tenancy relationship was established. This relationship can be created by and between a "person who furnishes the landholding as owner, civil law lessee, usufructuary, or legal possessor and the person who personally cultivates the same."25 Second, as bona-fide tenant-tillers, the Bejasas have security of tenure.

Respondents filed their notice of appeal. Court of Appeals promulgated a decision reversing the trial court's ruling. Reasoning:First, not all requisites necessary for a leasehold tenancy relationship were met. There was no consent given by the landowner. The consent of former civil law lessee, Malabanan, was not enough to create a tenancy relationship.31 Second, when Malabanan engaged the services of the Bejasas, he only constituted them as mere overseers and did not make them "permanent tenants". Hence, petitioners elevated the case in SC.

ISSUE: Whether there is a tenancy relationship in favor of the Bejasas.

RULING:

The elements of a tenancy relationship are:37(1) the parties are the landowner and the tenant; (2) the subject is agricultural land; (3) there is consent; (4) the purpose is agricultural production; (5) there is personal cultivation; and (6) there is sharing of harvests.

SC held that there is no tenancy relationship between the parties.

Malabanan and the Bejasas. True, Malabanan (as Candelaria's usufructuary) allowed the Bejasas to stay on and cultivate the land. However, even if we assume that he had the authority to give consent to the creation of a tenancy relation, still, no such relation existed.

There was no proof that they shared the harvests. Candelaria and the Bejasas. Between them, there is no tenancy relationship. Candelaria as landowner never gave her consent.

The Bejasas admit that prior to 1984, they had no contact with Candelaria. They acknowledge that Candelaria could argue that she did not know of Malabanan's arrangement with them. True enough Candelaria disavowed any knowledge that the Bejasas during Malabanan's lease possessed the land.46 However, the Bejasas claim that this defect was cured when Candelaria agreed to lease the land to the Bejasas for P20,000.00 per annum, when Malabanan died.

SC do not agree. In a tenancy agreement, consideration should be in the form of harvest sharing. Even assuming that Candelaria agreed to lease it out to the Bejasas for P20,000 per year, such agreement did not create a tenancy relationship, but a mere civil law lease.

Dinglasan and the Bejasas. Even assuming that the Dinglasans had the authority as civil law lessees of the land to bind it in a tenancy agreement, there is no proof that they did.

Again, there was no agreement as to harvest sharing. The only agreement between them is the "aryenduhan",49which states in no uncertain terms the monetary consideration to be paid, and the term of the contract. Not all the elements of tenancy being met.

(G.R. No. 169691) PEDRITO SALMORIN vs. DR. PEDRO ZALDIVAR

FACTS:

On July 15, 1989, respondent Dr. Pedro Zaldivar, as legal possessor of a lot in Antique, entered into an agreement (Kasugtanan) with Salmorin designating him as administrator of the lot with a monthly salary of P150. Salmorin allegedly did not comply with the terms of the Kasugtanan when he failed to till the vacant areas. This compelled Zaldivar to terminate his services and eject him from the lot. When Salmorin refused to vacate the property, Zaldivar filed a complaint for unlawful detainer against him in the MCTC. In his answer, Salmorin alleged the existence of a tenancy relationship between him and Zaldivar. Thus, he claimed that the case was an agrarian matter over which the MCTC had no jurisdiction. MCTC found that the case was in the nature of an agrarian dispute and dismissed the case for lack of jurisdiction.

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Zaldivar appealed to RTC which ruled in his favor. The RTC found that the consent of the landowner and sharing of the harvest, which were requisites for the existence of a tenancy relationship, did not exist. Thus, it ruled that the MCTC had jurisdiction over the case and ordered the reinstatement of Civil Case. Salmorin appealed the RTC decision to the CA but the latter upheld the decision of the RTC. He now seeks a reversal of the RTC and CA decisions.

ISSUES: Whether or not there is a tenancy relationship between the petitioner and the respondent.

RULING:

Contrary to the findings of the MCTC, both the RTC and the CA found that there was no tenancy relationship between Salmorin and Zaldivar. A tenancy relationship cannot be presumed.11 In Saul v. Suarez, 12 we held:

There must be evidence to prove the tenancy relations such that all its indispensable elements must be established, to wit: (1) the parties are the landowner and the tenant; (2) the subject is agricultural land; (3) there is consent by the landowner; (4) the purpose is agricultural production; (5) there is personal cultivation; and (6) there is sharing of the harvests. All these requisites are necessary to create tenancy relationship, and the absence of one or more requisites will not make the alleged tenant a de facto tenant.

All these elements must concur. It is not enough that they are alleged. To divest the MCTC of jurisdiction, these elements must all be shown to be present.13

Tenancy is a legal relationship established by the existence of particular facts as required by law . In this case, the RTC and CA correctly found that the third and sixth elements, namely, consent of the landowner and sharing of the harvests, respectively, were absent. We find no compelling reason to disturb the factual findings of the RTC and the CA.

The fact alone of working on another's landholding does not raise a presumption of the existence of agricultural tenancy. 14   There must be substantial evidence on record adequate to prove the element of sharing. Salmorin’s attempt to persuade us by way of a certification coming from the Barangay Agrarian Reform Committee attesting that he was a bona fide tenant of Zaldivar deserves scant consideration. Certifications issued by municipal agrarian reform officers are not binding on the courts. In a given locality, merely preliminary or provisional are the certifications or findings of the secretary of agrarian reform (or of an authorized representative) concerning the presence or the absence of a tenancy relationship between the contending parties; hence, such certifications do not bind the judiciary.

SC noted that agricultural share tenancy was declared contrary to public policy and, thus, abolished by the passage of RA 3844, as amended. Share tenancy exists: [W]henever two persons agree on a joint undertaking for agricultural production wherein one party furnishes the land and the other his labor, with either or both contributing any one or several of the items of production, the tenant cultivating the land personally with the aid of labor available from members of his immediate farm household, and the produce thereof to be divided between the landholder and the tenant.17

Saul vs. Suarez (G.R. No. 166664)

FACTS:

          Petitioner Domingo C. Suarez owns hectares agricultural land in South Cotabato. A complaint for reinstatement with preliminary mandatory injunction, recovery of possession and damages was filed against him and T’boli Agro-Industrial Development, Inc. (TADI) before the Office of the Provincial Adjudicator, Department of Agrarian Reform Adjudicatory Board (DARAB), by respondents Leo B. Saul, Roger S. Brillo, Efrain S. Brillo, Eleno S. Brillo and Ignacio G. Pelaez.           Respondents alleged that they were agricultural tenants in petitioner’s land on a 25-75 sharing agreement; that after two croppings, petitioner voluntarily offered the land for sale to the government under a Voluntary Offer to Sell (VOS) that they signed the documents for the transfer of the land under the Comprehensive Agrarian Reform Program (CARP) as farmer-beneficiaries, and petitioner, as landowner; and that the sale was approved by the local Land Valuation Office of the Land Bank of the Philippines (LBP). Respondents claimed that while the VOS was being processed, they were summarily ejected from the property by TADI after the latter entered into a Grower Agreement with Contract to Buy with petitioner thereby depriving them of their landholdings.           Petitioner filed an Answer contending that respondents were installed as tenants, not by him, but by the Department of Agrarian Reform (DAR) in South Cotabato.  He admitted that he voluntarily offered his land for sale to the government under the CARP but denied knowledge of the certification issued by the LBP.  He denied the existence of a grower’s contract between him and TADI over the subject land. For its part, TADI claimed that its grower’s contract with petitioner covered parcels of land different from those being claimed by respondents.  

Regional Adjudicator dismissed the complaint for lack of merit.  The adjudicator found that respondents failed to prove their alleged tenancy over petitioner’s land. While they were identified as potential farmer-beneficiaries of the land subject of the VOS, they only have an “inchoate right” to the land since its coverage under the CARP has yet to be completed.

 On appeal, the DARAB Central Office rendered a Decision reversing the Regional Adjudicator.  It observed that petitioner

admitted that respondents were his tenants.  It further held that: ... it is in fact immaterial whether the subject landholding is covered by the alleged grower’s contract or not. What is clear in the instant case is the fact that herein appellants were illegally ejected from their respective tenanted lands. If indeed the subject land is not covered by the grower’s contract, if there’s any, the act of defendant-appellee TADI in ejecting the tenants-appellants was beyond authority, hence, illegal. Assuming arguendo that the subject landholding is truly covered in the said contract, the contracting parties are required under the law to respect the tenurial rights of the tenants therein.[11]

   

          Petitioner elevated the matter to the Court of Appeals which affirmed the DARAB. Upon denial of the motion for reconsideration, petitioner filed the instant petition. Petitioner contends that there is no basis in holding that respondents were his tenants.  He denies having admitted that they were his tenants, and insists that there is no proof to prove the existence of tenancy

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relations.  He asserts that he did not eject respondents from their landholdings by entering into a grower’s contract over the subject land with TADI.

 ISSUE: Whether or not, the respondents are bona fide agricultural tenants under the law.

RULING:  There is nothing in the records to suggest that respondents were petitioner’s bona fide tenants prior to their designation by the DAR as potential farmer-beneficiaries under the CARP.  There is no evidence to prove tenancy arrangement between petitioner and respondents before the former’s voluntary offer to convey the land to the government.            In holding that respondents were bona fide tenants of petitioner, the DARAB and the appellate court relied solely on the alleged admission in petitioner’s answer to the complaint, to wit:

             3.         Defendant admits the averments in paragraph IV of the complaint.

 The fourth paragraph of the complaint states:

             4.         That plaintiffs were instituted sometime in 1993 and were given three (3) hectares each respectively, while for plaintiff Roger Brillo was given 2 hectares; the sharing of the parties involved was 25-75 in favor of the tenants; after for two croppings defendant D. Suarez approached and offered the land by Voluntary Offer to Sale (VOS) last November 1993 in our favor (plaintiffs-tenants) and the papers for VOS was processed in the office of Department [of] Agrarian Reform (DAR) Koronadal, South Cotabato;[16]

 We find that the above admission was taken out of context.  While petitioner admitted that respondents were tenants in

the land, he qualified in paragraph 2 of his answer that it was the DAR who installed them as such.   Clearly, it was the DAR who placed respondents in actual possession of the land upon petitioner’s offer to transfer the same to the government.   Other than this supposed admission, there is no evidence on record to prove the tenancy relations.  Respondents did not substantiate their claim with evidence to show that they were agricultural tenants in petitioner’s land.  They did not allege actual cultivation or specify the crop produced thereby.  Neither did they mention how much of the produce was delivered to petitioner or submit receipts to prove the purported 25-75 sharing of harvests.  They did not state, much less prove, the circumstances of their agreement with petitioner as to the alleged tenancy relationship.  Thus, there is no basis to the claim that they are agricultural tenants on the property.

 SC held that a tenancy relationship cannot be presumed. There must be evidence to prove the tenancy relations such that all its indispensable elements must be established, to wit: (1) the parties are the landowner and the tenant; (2) the subject is agricultural land; (3) there is consent by the landowner; (4) the purpose is agricultural production; (5) there is personal cultivation; and (6) there is sharing of the harvests.  All these requisites are necessary to create tenancy relationship, and the absence of one or more requisites will not make the alleged tenant a   de facto   tenant.

           It is clear therefore that the subject matter of the grower’s contract did not include the land subject of the VOS.  Thus, petitioner could not have caused respondents’ ejectment from the subject property by virtue of his transactions with TADI, since he never authorized the latter to plant on the subject land.  Respondents’ ejectment from the land was not pursuant to the contract petitioner had entered into with TADI who appears to have entered the land without petitioner’s consent.   Thus, it was error for the appellate court to affirm DARAB’s conclusion that it is “immaterial whether the subject landholding is covered by the alleged grower’s contract or not.”  It is, in every sense, material to the determination of the case because petitioner is sought to be held liable for respondents’ ejectment due allegedly to the contract.  If the disputed land is not the subject of the contract, as in fact it is not, then respondents cannot claim that petitioner illegally ejected them from the land.  Consequently, they have no cause of action against petitioner, since the latter did not commit any act that resulted in their dispossession.     

In this case, there is no showing that there exists a tenancy relationship between petitioner and respondents.  Likewise, respondents have no tenancy relationship with TADI, against whom they principally have a cause of action.   The controversy is civil in nature since it involves the issue of material possession, independent of any question pertaining to agricultural tenancy.  Hence, the case falls outside the jurisdiction of DARAB; it is cognizable by the regular courts.[31]

  WHEREFORE, the instant petition is GRANTED. The complaint in DARAB Case No. XI-249-SC-95 is

hereby DISMISSED.

Soliman, et al vs. PASUDECO (GR No. 169589)

FACTS:  

         The property subject of this case is situated in Pampanga, with an area of ten (10) hectares, more or less, previously covered by Transfer Certificate of Title (TCT) and formerly owned by one Dalmacio Sicat (Dalmacio). Dalmacio offered to sell the subject property to respondent Pampanga Sugar Development Company (PASUDECO), a domestic corporation engaged in sugar milling, to be used as a housing complex for PASUDECO's laborers and employees.  The land was offered for sale at the price of P8.00 per square meter. On January 26, 1970, Dalmacio reduced the price to P5.00 per square meter.  In a meeting held on April 15, 1970, the Board of Directors of PASUDECO issued Board Resolution No. 057 [7] authorizing the purchase of the subject property at P4.00 per square meter. Dalmacio and his tenants jointly filed a Petition with the then Court of Agrarian Relations (CAR) seeking approval of the voluntary surrender of the subject property with payment of disturbance compensation. On the same date, the CAR  rendered a Decision, approving the voluntary surrender of the subject property by the tenants to Dalmacio, thus, terminating their tenancy relationship effective May 21, 1970, the date when the parties entered into the agreement.                 On May 22, 1970, a Deed of Sale with Mortgage was executed between Dalmacio and PASUDECO. Thereafter, the documents needed for the conversion of the land to residential purposes were prepared, However, due to financial setbacks suffered after the imposition of Martial Law in 1972, PASUDECO deferred the construction of the housing project. PASUDECO averred that no person was authorized to occupy and/or cultivate the subject property.          On the other hand, the petitioners have a totally different version.          Petitioners claimed that, sometime in November 1970, they started working on the subject property with a corresponding area of tillage. A Certification was also issued by the Samahang Nayon in favor of petitioner Joaquin Soliman with respect to the remaining area of 1.5 hectares. Likewise, the Barangay Chairperson of Macabacle, Bacolor, Pampanga, certified that the eight (8) petitioners had been the actual tenant-tillers of the subject property from 1970 up to the present, and that petitioner Baldomero Almario (Baldomero) was issued  Certificate of Land Transfer (CLT).

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          The Ocular Inspection and the Investigation Report issued by the Municipal Agrarian Reform Officer (MARO) on March 13, 1990 showed that since 1970, petitioners cultivated the subject property, allegedly managed by the late respondent Gerry Rodriguez (Gerry), manager of PASUDECO from 1970-1991. Petitioners alleged that in 1970, Gerry made one Ciriaco Almario (Ciriaco) his overseer/caretaker, tasked to collect lease rentals from petitioners. In turn, Ciriaco remitted the rentals to Gerry.   On May 14, 1990, Ciriaco  certified that petitioners were the actual tenant-tillers of  the  subject  property.   Moreover, petitioners  deposited  their  alleged rentals with the Land Bank of the Philippines (LBP), as land amortizations, in varying amounts, from  1989 to 1993, as shown by the official receipts issued by LBP. Thus, petitioners averred that from 1970 up to 1990 or for a period of almost twenty (20) years, they had been in actual and peaceful possession and cultivation of the subject property.          The real controversy arose when PASUDECO decided to pursue the development of the property into a housing project for its employees. Petitioners filed a Complaint for Maintenance of Peaceful Possession with a Prayer for the issuance of a Preliminary Injunction against Gerry before the PARAD to restrain him from harassing and molesting petitioners in their respective landholdings. Petitioners alleged that Gerry, together with armed men, entered the property and destroyed some of their crops. Traversing the complaint, Gerry raised as one of his defenses the fact that PASUDECO was the owner of the subject property. Thus, on November 26, 1990, petitioners filed their Amended Complaint impleading PASUDECO as a party-defendant. Meanwhile, PASUDECO asserted that petitioners were not tenants but merely interlopers, usurpers and/or intruders into the subject property.          Trial on the merits ensued. In the process, the PARAD conducted an ocular inspection and found that the subject property was planted with palay. There were also several dikes or pilapil dividing the subject property. The PARAD also observed that there was a big sign installed therein, reading “Future Site of PASUDECO Employees Housing Project.”

The PARAD dismissed petitioners' complaint and denied their application for the writ of preliminary injunction. The PARAD held that petitioners had not shown direct and convincing proof that they were tenants of the subject property. Petitioners could not show any receipt proving payment of lease rentals either to PASUDECO or Gerry.   In addition to the absence of sharing, the PARAD ruled that there was no consent given by PASUDECO in order to create a tenancy relationship in favor of the petitioners.          Aggrieved, petitioners filed a Notice of Appeal with the DARAB. DARAB rendered its Decision in favor of the petitioners, reversing the findings and conclusions of the PARAD. The DARAB held that, without the approval of the conversion application filed by PASUDECO, it could not be substantiated that the subject property was indeed residential property intended for housing purposes. Because of this, and the fact that petitioners tilled the subject property for almost twenty (20) years, the same remained agricultural in character. Moreover, the DARAB held that, contrary to the findings of the PARAD, the elements of consent and sharing were present in this case. The DARAB, citing Section 5 of Republic Act (R.A.) No. 3844, ratiocinated that petitioners entered the subject property in 1970 upon the request of Ciriaco who, with the consent of Gerry as manager of PASUDECO, was authorized to look for people to cultivate the subject property. Petitioners cultivated the same and shared their harvests with PASUDECO, received by Gerry through Ciriaco. Later on, when Gerry refused to accept their lease rentals, petitioners deposited the money with LBP. The DARAB opined that these pieces of evidence established the fact of consent and sharing. While express consent was not given, the fact that Gerry accepted the lease rentals for a considerable number of years signified an implied consent which, in turn, bound PASUDECO.  

CA reversed the DARAB's ruling and reinstated the PARAD's decision. The CA held that, while the subject property was agricultural, there was no tenancy relationship between the parties, express or implied. The CA concurred in the findings of the PARAD and found no credible evidence to support the contention that petitioners were de jure tenants inasmuch as the elements of consent and sharing were absent. CA reiterated that tenancy is not merely a factual relationship but also a legal relationship; hence, the fact that PASUDECO, being the owner of the subject property, was uninvolved in and oblivious to petitioners' cultivation thereof, tenancy relations did not exist.  Thus, the CA concluded that in the absence of any tenancy relationship between the parties, the case was outside the jurisdiction of the DARAB.  Petitioners filed their Motion for Reconsideration, which was denied by the CA in its Resolution. ISSUE: Whether petitioners are de jure tenants of the subject property.

 RULING:  

         Tenants are defined as persons who — in themselves and with the aid available from within their immediate farm households — cultivate the land belonging to or possessed by another, with the latter's consent, for purposes of production, sharing the produce with the landholder under the share tenancy system, or paying to the landholder a price certain or ascertainable in produce or money or both under the leasehold tenancy system.          Based on the foregoing definition of a tenant, entrenched in jurisprudence are the following essential elements of tenancy:   1) the parties are the landowner and the tenant or agricultural lessee; 2) the subject matter of the relationship is an agricultural land; 3) there is consent between the parties to the relationship; 4) the purpose of the relationship is to bring about agricultural production; 5) there is personal cultivation on the part of the tenant or agricultural lessee; and 6) the harvest is shared between landowner and tenant or agricultural lessee. The presence of all these elements must be proved by substantial evidence. Unless a person has established his status as a de jure tenant, he is not entitled to security of tenure and is not covered by the Land Reform Program of the Government under existing tenancy laws. Tenancy relationship cannot be presumed. Claims that one is a tenant do not automatically give rise to security of tenure.           The pronouncement of the DARAB that there is, in this case, tenancy by operation of law under Section 5 of R.A. No. 3844 is not correct. In Reyes v. Reyes, SC held: 

            Under R.A. 3844, two modes are provided for in the establishment of an agricultural leasehold relation: (1) by operation of law in accordance with Section 4 of the said act; or (2) by oral or written agreement, either express or implied.             By operation of law simply means the abolition of the agricultural share tenancy system and the conversion of share tenancy relations into leasehold relations. The other method is the agricultural leasehold contract, which may either be oral or in writing.

 Rather, consistent with the parties' assertions, what we have here is an alleged case of tenancy by implied consent.   As such, crucial for the creation of tenancy relations would be the existence of two of the essential elements, namely, consent and sharing and/or payment of lease rentals.          After a meticulous review of the records, we find that the elements of consent and sharing and/or payment of lease rentals are absent in this case. 

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         Tenancy relationship can only be created with the consent of the true and lawful landholder who is either the owner, lessee, usufructuary or legal possessor of the property, and not through the acts of the supposed landholder who has no right to the property subject of the tenancy. To rule otherwise would allow collusion among the unscrupulous to the prejudice of the true and lawful landholder.[48] As duly found by the PARAD and the CA, Gerry was not authorized to enter into a tenancy relationship with the petitioners.  In fact, there is no proof that he, indeed, entered into one. Other than their bare assertions, petitioners rely on the certification of Ciriaco who, likewise, failed to substantiate his claim that Gerry authorized him to select individuals and install them as tenants of the subject property. Absent substantial evidence showing Ciriaco's authority from PASUDECO, or even from Gerry, to give consent to the creation of a tenancy relationship, his actions could not give rise to an implied tenancy.[49]

          Likewise, the alleged sharing and/or payment of lease rentals was not substantiated other than by the deposit-payments with the LBP, which petitioners characterized as amortizations. We cannot close our eyes to the absence of any proof of payment prior to the deposit-payments with LBP.  Not a single receipt was ever issued by Gerry, duly acknowledging payment of these rentals from Ciriaco who, allegedly, personally collected the same from the petitioners. Notably, the fact of working on another's landholding, standing alone, does not raise a presumption of the existence of agricultural tenancy. Substantial evidence necessary to establish the fact of sharing cannot be satisfied by a mere scintilla of evidence; there must be concrete evidence on record adequate to prove the element of sharing. Thus, to prove sharing of harvests, a receipt or any other credible evidence must be presented, because self-serving statements are inadequate.[50]

          The certifications attesting to petitioners' alleged status as de jure tenants are insufficient.  In a given locality, the certification issued by the Secretary of Agrarian Reform or an authorized representative, like the MARO or the BARC, concerning the presence or the absence of a tenancy relationship between the contending parties, is considered merely preliminary or provisional, hence, such certification does not bind the judiciary.[51]

          The onus rests on the petitioners to prove their affirmative allegation of tenancy, which they failed to discharge with substantial evidence.  Simply put, he who makes an affirmative allegation of an issue has the burden of proving the same, and in the case of the plaintiff in a civil case, the burden of proof never parts. The same rule applies to administrative cases. In fact, if the complainant, upon whom rests the burden of proving his cause of action, fails to show in a satisfactory manner the facts upon which he bases his claim, the respondent is under no obligation to prove his exception or defense.[52]

                 Petitioners' assertion that they were allowed to cultivate the subject property without opposition, does not mean that PASUDECO impliedly recognized the existence of a leasehold relation. Occupancy and continued possession of the land will not ipso facto make one a de jure tenant, because the principal factor in determining whether a tenancy relationship exists is intent.[53] This much we said in VHJ Construction and Development Corporation v. Court of Appeals,[54]  where we held that:                                   

         Indeed, a tenancy relationship cannot be presumed. There must be evidence to prove this allegation. The principal factor in determining whether a tenancy relationship exists is intent. Tenancy is not a purely factual  relationship  dependent  on  what the alleged tenant does upon the land. It is also a legal relationship. As we ruled in Chico v. Court of Appeals[347 SCRA 35 (2000)]:              "Each of the elements hereinbefore mentioned is essential to create a de jure leasehold or tenancy relationship between the parties. This de jure relationship, in turn, is the terra firma for a security of tenure between the landlord and the tenant. The leasehold relationship is not brought about by a mere congruence of facts but, being a legal relationship, the mutual will of the parties to that relationship should be primordial."             Thus, the intent of the parties, the understanding when the farmer is installed, and their written agreements, provided these are complied with and are not contrary to law, are even more important.

                               WHEREFORE , the instant Petition is   DENIED   and the Decision of the Court of Appeals is   AFFIRMED .

Section 3 of R.A. No. 6657, as amended by R.A No. 9700

SECTION 3. Definitions. - For the purpose of this Act, unless the context indicates otherwise:

(a) Agrarian Reform means the redistribution of lands, regardless of crops or fruits produced, to farmers and regular farm workers who are landless, irrespective of tenurial arrangement, to include the totality of factors and support services designed to lift the economic status of the beneficiaries and all other arrangements alternative to the physical redistribution of lands, such as production or profit-sharing, labor administration, and the distribution of shares of stock which will allow beneficiaries to receive a just share of the fruits of the lands they work.

(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 of juridical. (As amended by R. A. 7881)chan robles virtual law library

(c) Agricultural Land refers to land devoted to agricultural activity as defined in this Act and not classified as mineral, forest, residential, commercial or industrial land.

(d) Agrarian Dispute refers to any controversy relating to tenurial arrangements, whether leasehold, tenancy, stewardship or otherwise, over lands devoted to agriculture, including disputes concerning farm workers' associations or representation of persons in negotiating, fixing, maintaining, changing or seeking to arrange terms or conditions of such tenurial arrangements.

It includes any controversy relating to compensation of lands acquired under this Act and other terms and conditions of transfer of ownership from landowners to farm workers, tenants and other agrarian reform beneficiaries, whether the disputants stand in the proximate relation of farm operator and beneficiary, landowner and tenant, or lessor and lessee.

(e) Idle or Abandoned Land refers to any agricultural land not cultivated, tilled or developed to produce any crop nor devoted to any specific economic purpose continuously for a period of three (3) years

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immediately prior to the receipt of notice of acquisition by the government as provided under this Act, but does not include land that has become permanently or regularly devoted to non-agricultural purposes. It does not include land which has become unproductive by reason of force majeure or any other fortuitous event: Provided, that prior to such event, such land was previously used for agricultural or other economic purposes.

(f) Farmer refers to a natural person whose primary livelihood is cultivation of land or the production of agricultural crops either by himself, or primarily with the assistance of his immediate farm household, whether the land is owned by him, or by another person under a leasehold or share tenancy agreement or arrangement with the owner thereof.

(g) Farmworker is a natural person who renders service for value as an employee or laborer in an agricultural enterprise or farm regardless of whether his compensation is paid on a daily, weekly, monthly or "pakyaw" basis. The term includes an individual whose work has ceased as a consequence of, or in connection with, a pending agrarian dispute who has not obtained a substantially equivalent and regular farm employment.

(h) Regular Farmworker is a natural person who is employed on a permanent basis by an agricultural enterprise or farm.

(i) Seasonal Farmworker is a natural person who is employed on a recurrent, periodic or intermittent basis by an agricultural enterprise or farm, whether as a permanent or a non-permanent laborer, such as "dumaan", "sacada", and the like.

(j) Other Farmworker is a farmworker who does not fall under paragraphs (g), (h) and (i).

(k) Cooperatives shall refer to organizations composed primarily of small agricultural producers, farmers, farm workers, or other agrarian reform beneficiaries who voluntarily organize themselves for the purpose of pooling land, human, technological, financial or other economic resources, and operated on the principle of one member, one vote. A juridical person may be a member of a cooperative, with the same rights and duties as a natural person.

B. Burden of Proof

Jeremias vs. Estate of Mariano (GR No. 174649)

FACTS:

Irene P. Mariano (Irene), a widow, owned two parcels of land covered by Transfer Certificates of Title (TCTs) with an aggregate area of a little more than 27 hectares.   In 1972, the said parcels of land were placed under the Operation Land Transfer program pursuant to Presidential Decree No. 27, and accordingly, the tenanted portion of the landholdings were subdivided among identified tenant-beneficiaries, and a subdivision plan was made. One of the more than 40 tenant-beneficiaries of the two titled properties of Irene P. Mariano, who were already given emancipation patents, was Santiago Jeremias, father of petitioner Leopoldo Jeremias (Leopoldo), whose apportionments consisted of three lots within TCT.  On 26 June 1988, Irene P. Mariano died intestate and was succeeded by her two children, Jose P. Mariano and Erlinda M. Villanueva. In an unsigned hand-written letter dated, Helen S. Mariano, wife of heir Jose P. Mariano, and despite the fact that the estate of the late Irene Mariano remained unpartitioned and still under intestate proceedings, allegedly instituted Ruben Vias (Ruben) as a tenant.   

 Sometime in 1991, Danilo David P. Mariano (Danilo) was appointed as administrator of respondent Estate of Irene P. Mariano. Danilo, lodged before the PARAD two separate complaints for ejectment and damages against Leopoldo and Ruben. In the complaint against Leopoldo, respondent Danilo averred that sometime in July 1993, he discovered that the former entered the land, which lands were inside the Estates landholding covered by TCT No. 6887, and planted various agricultural products, without his knowledge and consent. Respondent Danilo further alleged that Leopoldo was not a tenant of Irene. It was his father, Santiago Jeremias, who was her tenant in lots, which are also inside the property covered by TCT No. 6887.  After Leopoldos refusal to vacate said lots despite oral and formal demands, respondent made a formal complaint for ejectment with the Barangay Agrarian Reform Council (BARC), which proved futile since the parties failed to amicably settle the case. In his answer, Leopoldo denied he unlawfully entered the lots. He claimed that he cultivated and farmed these lots upon the permission and tolerance of Irene P. Mariano, the registered owner. He likewise averred that being the son of Santiago Jeremias, the tenant of Irene P. Mariano, he lawfully acquired the right to cultivate said lots by virtue of succession. In the case against Ruben Vias (Ruben), respondent Danilo alleged that in June 1993, he came to know of the fact of Rubens intrusion and cultivation of Lots No. 25 and No. 48 which are within the landholding covered by TCT No. 6886.  When respondent made verbal and formal demands for Ruben to vacate the areas, the latter declined to heed the demands.  Ruben, on the other hand, answered that his cultivation of the areas was pursuant to a hand-written letter of Helen S. Mariano instituting him as a tenant of said lots. PARAD ruled in favor of the respondent and ordered Leopoldo and Ruben to vacate the subject lots.

  Leopoldo and Ruben filed a notice of appeal with the PARAD. In their Appellants Brief before the DARAB, they assailed the PARADs reliance on the subdivision plan in ruling that the lots that were the subject matter of the controversy were not tenanted. They asserted that the PARAD should not take all the annotations in the subdivision plan as the absolute truth, since they were not privy to its preparation; there was a possibility therefore, that they were not notified by the authorities of the date of the survey; hence, it could happen that the lots they tilled as tenants were not identified or listed in their names. Leopoldo lamented the PARADs failure to give weight to the receipts of rentals and certification from the Land Bank of the Philippines in his favor. Although these receipts and certifications did not indicate the farm lots the payments pertained to, he insisted that such doubt must be resolved in his favor in line with the constitutional and agrarian statutes mandate that interpretation must be on the tenants side. 

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For his part, Ruben stressed that the proviso in the letter instituting him as tenant in Lots No. 25 and No. 48, which stipulated that he would vacate the same was neither legal nor binding on him since it violated Section 49 [6] of Republic Act No. 1199,[7] otherwise known as the Agricultural Tenancy Act of 1954. DARAB promulgated its decision which favored Leopoldo and Ruben, by reversing and setting aside the PARAD decision. Under the belief that all the lots of respondent Estates landholdings covered under TCTs No. 6886 and No. 6887 were tenanted, the DARAB was of the opinion that respondent could not claim that the disputed lots (within TCTs No. 6886 and No. 6887) could not be legally retained by respondent Estate, since the area of respondents landholdings exceeded 24 hectares; and under Presidential Decree No. 27, landowners are not entitled to retention if they own more than 24 hectares of rice and corn lands. The DARAB said that even if respondent merely owned tenanted rice and corn land totaling less than 24 hectares, still it had no right of retention, since he had other lands used for residential, commercial and other urban purposes wherein it derived sufficient income to support itself. Under Administrative Order No. 4, Series of 1991, a supplemental guideline of Presidential Decree No. 27, the right of retention cannot be had by a landowner even if he has less than 24 hectares of rice and corn lands if he additionally owns lands for residential, commercial, industrial or urban purposes, from which he derives adequate income to support himself and his family. The DARAB considered the subdivision plan as a mere scrap of paper, and it could not be used as evidence, because said document was not signed by the approving officer who made it. Moreover, the DARAB ruled that the letter signed by Mrs. Helen Mariano, the wife of Jose Mariano, a co-owner of the subject lots, effectively made Ruben a lawful possessor and cultivator. The DARAB explained that since Helen Mariano signed on behalf of her husband, the principal, then she became the agent of her husband. Considering that the husband did not repudiate the act of Helen Mariano, such agency subsists. Hence, the institution of Ruben to till the lots in question must be respected. Petitioners filed a motion for reconsideration but it was denied by DARAB.  Dissatisfied, respondent appealed the judgment to the Court of Appeals. The Court of Appeals promulgated a decision in favor of respondent. It reversed and set aside the verdict of the DARAB and reinstated the decision of the PARAD. Leopoldo filed a motion for reconsideration as well as Ruben’s heirs but it was denied by CA. 

To support his stance, Leopoldo maintains that he cultivated Lots No. 1B3D, No. 1B3E, No. 1B3H and No. 1B3Q since the 1960s with the consent and permission of the late Irene P. Mariano. The Heirs of Ruben are of the posture that Ruben became a tenant of Lots No. 25 and No. 48 pursuant to a written letter instituting him as such.

ISSUE: Whether or not they are tenants of the lands belonging to respondent and, consequently, entitled to security of tenure. RULING: Tenancy relationship arises if all the following essential requisites are present: 

1) that the parties are the landowner and the tenant or agricultural lessee; 2) that the subject matter of the relationship is an agricultural land; 3) that there is consent between the parties to the relationship; 4) that the purpose of the relationship is to bring about agricultural production; 5) that there is personal cultivation on the part of the tenant or agricultural lessee; and 6) that the harvest is shared between the landowner and the tenant or agricultural lessee.[9]

  

Claims that one is a tenant do not automatically give rise to security of tenure. [10] The elements of tenancy must first be proved in order to entitle the claimant to security of tenure.[11]

 A tenant has been defined under Section 5(a) of Republic Act No. 1199, otherwise known as the Agricultural Tenancy Act of the Philippines, as a person who, himself, and with the aid available from within his immediate farm household, cultivates the land belonging to or possessed by another, with the latters consent for purposes of production, sharing the produce with the landholder under the share tenancy system, or paying to the landholder a price certain or ascertainable in produce or in money or both, under the leasehold system. This Court had once ruled that self-serving statements regarding tenancy relations could not establish the claimed relationship. The fact alone of working on another’s landholding does not raise a presumption of the existence of agricultural tenancy. Substantial evidence entails not only the presence of a mere scintilla of evidence in order that the fact of sharing can be established; there must also be concrete evidence on record that is adequate to prove the element of sharing.[14] In fact, this Court likewise ruled that to prove sharing of harvests, a receipt or any other evidence must be presented; self-serving statements are deemed inadequate.  In this case, there is no substantial evidence that the petitioners were installed by the owner of the lots in question as agricultural tenants on the property.   There is, likewise, no evidence that the petitioners shared with the landowner the harvest and/or produce from the landholding. There is no evidence on record, other than the self-serving declaration of Leopoldo and his witnesses, that indeed, the landowner had authorized him to till the disputed lots.   Leopoldos failure to adduce a significant morsel of evidence that he was authorized as an agricultural tenant of the contested lands makes his supposition - that he has legal right to work on the said lands - frail and empty.   This makes him a usurper, devoid of any right to remain in the premises of the properties in question.  Rubens evidence is likewise remotely substantial. The hand-written letter allegedly instituting Ruben as tenant is unsigned. This Court has ruled that the unsigned handwritten documents and unsigned computer printouts, which are unauthenticated, are unreliable.  This is mere self-serving evidence, which should be rejected as evidence without any rational probative value, even in administrative proceedings. The letter presented by Ruben, being unsigned, falls within this category of evidence. It hardly has any probative value; hence, it barely bolsters his hypothesis.  Presidential Decree No. 27 provides: This shall apply to tenant-farmers of private agricultural lands primarily devoted to rice and corn under a system of share-crop or lease-tenancy, whether classified as landed estate or not.For lands to fall under the coverage of the said law, the same must be tenanted private agricultural lands. Thus, inDaez v. Court of Appeals,[24] the Court said that Presidential Decree No. 27 would not apply if: (1) the land is not devoted to rice or corn crops even if it is tenanted; or (2) the land is untenanted even though it is devoted to rice or corn crops. 

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There is no question that Irenes landholdings with a total area of a little more than 27 hectares, of which the disputed lots form a part, were subjected to agrarian reform in 1972 under Presidential Decree No. 27. However, it is also established by the records of the case that disputed lots were classified as untenanted by the Bureau of Lands. This important piece of evidence, absent any substantial evidence to the contrary, only leads to the conclusion that the lots which are the subject matter of the controversy are beyond the pale of the said statute.  WHEREFORE, the Decision of the Court of Appeals, reinstating the decision of the Provincial Agrarian Reform Adjudicator of Camarines Sur, is hereby AFFIRMED.

 Ceneze vs. Ramos (GR No. 172287)

FACTS:

Petitioner Welfredo Ceneze filed an action for declaration as bona fide tenant-lessee of two parcels of agricultural land owned by respondent Feliciana Ramos. Petitioner alleged that in 1981, Julian Ceneze, Sr. (Julian, Sr.), petitioner’s father, transferred his tenurial rights over the landholding to him with the consent and approval of respondent and that, since then, petitioner had been in actual and peaceful possession of the landholding until April 12, 1991, when respondent forcibly entered and cultivated the land for the purpose of dispossessing petitioner of his right as tenant. The complaint prayed that judgment be rendered declaring petitioner as the bona fide tenant-lessee of the landholding.

 In her defense, respondent denied that a tenancy relationship existed between her and petitioner, asserting that she had

never instituted petitioner as a tenant in any of her landholdings. She averred that petitioner had never been in possession of the landholding, but admitted that it was Julian, Sr. who was the tenant of the landholding. When Julian, Sr. migrated to the United States of America (USA) in 1985, respondent allowed Julian, Sr.’s wife to cultivate the land, but she herself migrated to the  USA in June 1988. Respondent later allowed Julian, Sr.’s son, Julian Ceneze, Jr. (Julian, Jr.), to cultivate the landholding, but he likewise migrated to the USA in 1991 without informing respondent. From then on, she took possession of the landholding, cultivated it and appropriated for herself the harvest therefrom. On April 8, 1991, she reported to Gloria Calpito, Municipal Agrarian Reform Officer (MARO) of Manaoag, Pangasinan, the abandonment of the landholding by Julian, Sr., his wife and his son, Julian, Jr. [5]

 On December 19, 1997, the Provincial Adjudicator rendered a decision in favor of petitioner. Provincial Adjudicator relied

on the following documents: (a) Certification issued by Perfecto Dacasin, Barangay Agrarian Reform Committee (BARC) Chairman that petitioner is a bona fide tenant of the subject landholding and that he was ejected from it sometime in April 1991; (b) Affidavit executed by Julian, Sr., stating that, with respondent’s consent and approval, he transferred his tenurial rights to petitioner before he migrated to the United States in 1981; and (c) Joint Affidavit of Epifanio Castillo, Romulo Camesario and Maximo Caquin, tenants of adjacent landholdings, attesting that petitioner was a tenant of the landholding since 1988, and that they helped in harvesting palay products and delivering to respondent her share in the harvest.

 On April 21, 2004, the Department of Agrarian Reform Adjudication Board (DARAB) affirmed the decision. Respondent elevated the case to the CA through a petition for review. On December 29, 2005, the CA resolved the

petition in favor of respondent landowner and dismissed petitioner’s complaint. 

          In a Resolution, the CA denied petitioner’s motion for reconsideration for lack of merit. Petitioner filed this petition for review, alleging that the CA decided the case not in accord with existing law and jurisprudence when it held that petitioner failed to establish that he had a tenancy relationship with respondent.[10]  

 ISSUE: Whether the petitioner had a tenancy relationship with the respondent.

RULING:

In resolving this petition, the Court is guided by the principle that tenancy is not purely a factual relationship dependent on what the alleged tenant does upon the land; it is also a legal relationship. A tenancy relationship cannot be presumed.   There must be evidence to prove the presence of all its indispensable elements, to wit: (1) the parties are the landowner and the tenant; (2) the subject is agricultural land; (3) there is consent by the landowner; (4) the purpose is agricultural production; (5) there is personal cultivation; and (6) there is sharing of the harvest. The absence of one element does not make an occupant of a parcel of land, its cultivator or planter, a de jure tenant.

  From our own assessment of the evidence at hand, we find that petitioner failed to establish the existence of a tenancy

relationship between him and respondent.  To prove a tenancy relationship, the requisite quantum of evidence is substantial evidence, or such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. The Certification of the BARC Chairman and the affidavits of Julian, Sr. and of the tenants of the adjacent landholdings certainly do not suffice. By themselves, they do not show that the elements of consent of the landowner and of sharing of harvests are present.

 To establish consent, petitioner presented the Affidavit executed by Julian, Sr.  However, the affidavit —which was not

notarized— cannot be given credence considering that it was not authenticated.  It is self-serving and unreliable. There should have been other corroborative evidence showing that respondent consented to and approved of the transfer of tenurial rights to petitioner.  

 The other tenants’ Joint Affidavit, likewise, fails to prove that petitioner is a tenant, more particularly, that there was

personal cultivation and sharing of the harvest.  In this affidavit, the affiants stated that they “helped hand in hand with [petitioner] in harvesting and threshing our palay products and helped him in delivering the share of [respondent] every year.”  The affidavit is ambiguously worded, considering that the affiants are also tenant-lessees of respondent and they could be referring to their own harvest. Moreover, as noted by the CA, the affiants’ averment that petitioner became a tenant of the landholding since 1988 runs counter to petitioner’s allegation that he became a tenant in 1981.

 In any case, the fact alone of working on a landholding does not give rise to a presumption of the existence of agricultural

tenancy. Substantial evidence requires more than a mere scintilla of evidence in order that the fact of sharing can be established; there must be concrete evidence on record adequate enough to prove the element of sharing. [16]  To prove sharing of harvests, a receipt or any other evidence must be presented, because self-serving statements are inadequate. In this case, petitioner failed to present a receipt for respondent’s share in the harvest, or any other solid evidence proving that there was a sharing of harvest.

 To recap, petitioner is not a de jure tenant entitled to security of tenure. There being no tenancy relationship between the

parties, the DARAB did not have jurisdiction over the case. We, therefore, sustain the ruling of the CA, dismissing petitioner’s complaint.

 WHEREFORE, the petition is DENIED. The Court of Appeals Decision are AFFIRMED.

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III. AGRICULTURAL LANDS

A. Covered Lands

Article XII, Section 3 of the 1987 Constitution

Section 3. Lands of the public domain are classified into agricultural, forest or timber, mineral lands and national parks. Agricultural lands of the public domain may be further classified by law according to the uses to which they may be devoted. Alienable lands of the public domain shall be limited to agricultural lands. Private corporations or associations may not hold such alienable lands of the public domain except by lease, for a period not exceeding twenty-five years, renewable for not more than twenty-five years, and not to exceed one thousand hectares in area. Citizens of the Philippines may lease not more than five hundred hectares, or acquire not more than twelve hectares thereof, by purchase, homestead, or grant.

Taking into account the requirements of conservation, ecology, and development, and subject to the requirements of agrarian reform, the Congress shall determine, by law, the size of lands of the public domain which may be acquired, developed, held, or leased and the conditions therefor.

Sections 4-9 of R.A. No. 6657, as amended by R.A. No. 9700

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 or 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 to the specific limits as 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. 5. Schedule of Implementation. - The distribution of all lands covered by this Act shall be implemented immediately and completed within ten (10) years from the effectivity thereof.

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

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

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

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

SEC. 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:

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Phase One: Rice and corn lands under Presidential Decree No. 27; all idle or abandoned lands; all private lands voluntarily offered by the owners for agrarian reform; all lands foreclosed by government financial institution; all lands acquired by the Presidential Commission on Good Government (PCGG); and all other lands owned by the government devoted to or suitable for agriculture, which shall be acquired and distributed immediately upon the effectivity of this Act, with the implementation to be completed within a period of not more than four (4) years;

Phase two: All alienable and disposable public agricultural lands; all arable public agricultural lands under agro-forest, pasture and agricultural leases already cultivated and planted to crops in accordance with Section 6, Article XIII of the Constitution; all public agricultural lands which are to be opened for new development and resettlement; and all private agricultural lands in excess of fifty (50) hectares, insofar as the excess hectarage is concerned, to implement principally the right of farmers and regular farm workers, who are landless, to own directly or collectively the lands they till, which shall be distributed immediately upon the effectivity of this Act, with the implementation to be completed within a period of not more than four (4) years.

Phase Three: All other private agricultural lands commencing with large landholdings and proceeding 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; and

b) Landholdings from the retention limit up to twenty-four (24) hectares, to begin on the sixth (6th) year from the effectivity of this Act and to be completed within four (4) years; to implement principally the right of farmers and regular farmworkers who are landless, to own directly or collectively the lands they till.

The schedule of acquisition and redistribution of all agricultural lands covered by this program shall be made in accordance with the above order of priority, which shall be provided in the implementing rules to be prepared by the Presidential Agrarian Reform Council (PARC), taking into consideration the following: the need to distribute lands to the tiller at the earliest practicable time; the need to enhance agricultural productivity; and the availability of funds and resources to implement and support the program.

In any case, the PARC, upon recommendation by the Provincial Agrarian Reform Coordinating Committee (PARCCOM), may declare certain provinces or regions as priority land reform areas, in which case the acquisition and distribution of private agricultural lands therein may be implemented ahead of the above schedules. In effecting the transfer within these guidelines, priority must be given to lands that are tenanted.

The PARC shall establish guidelines to implement the above priorities and distribution scheme, including the determination of who are qualified beneficiaries: Provided, That an owner-tiller may be a beneficiary of the land he does not own but is actually cultivating to the extent of the difference between the area of the land he owns and the award ceiling of three (3) hectares.

SEC. 8. Multinational Corporations. - All lands of the public domain leased, held or possessed by multinational associations, institutions or entities, devoted to existing and operational agribusiness or agro-industrial enterprises, operated by multinational corporations and associations, shall be programmed for acquisition and distribution immediately upon the effectivity of this Act, with the implementation to be completed within three (3) years.

Lands covered by the paragraph immediately preceding, under lease, management, grower or service contracts, and the like, shall be disposed of as follows:

(a)  Lease, management, grower or service contracts covering such lands covering an aggregate area in excess of 1,000 hectares, leased or held by foreign individuals in excess of 500 hectares are deemed amended to confirm with the limits set forth in Section 3 of Article XIII of the Constitution.

(b)  Contracts covering areas not in excess of 1,000 hectares in the case of such individuals shall be allowed to continue under their original terms and conditions but not beyond August 29, 1992, or their valid termination, whichever comes sooner, after which, such agreements shall continue only when confirmed by the appropriate government agency. Such contracts shall likewise continue even after the land has been transferred to beneficiaries or awardees thereof, which transfer shall be immediately commenced and implemented within the period of three (3) years mentioned in paragraph 1 hereof.

(c) In no case will such leases and other agreements now being implemented extend beyond August 29, 1992, when all lands subject hereof shall have been distributed completely to qualified beneficiaries or awardees. Such agreements can continue thereafter only under a new contract between the government or qualified beneficiaries or awardees, on the one hand, and said enterprises, on the other.

Lands leased, held or possessed by multinational corporations, owned by private individuals and private non-governmental corporations, associations, institutions, and entities, citizens of the Philippines, shall be subject to immediate compulsory acquisition and distribution upon the expiration of the applicable lease, management grower of service contract in effect as of August 29, 1987, or otherwise, upon its valid termination, whichever comes sooner, but not later than after ten (10) years following the effectivity of this Act . However, during the said period of effectivity, the government shall take steps to acquire these lands for immediate distribution thereafter.

In general, lands shall be distributed directly to the individual worker-beneficiaries. In case it is not economically feasible and sound to divide the land, then they shall form a workers' cooperative or association which will deal with the corporation or business association or any other proper party, for the purpose of entering into a lease or growers agreement and for all other legitimate purposes.  Until a new agreement is entered into by and between the workers' cooperative or association and the corporation or business association or any other proper party, any agreement existing at the time this Act takes effect between the former and the previous landowner shall be respected by both the workers' cooperative or association and the corporation, business association or such other proper party.  In no case shall the implementation or application of this Act justify or

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result in the reduction of status or diminution of any benefits received or enjoyed by the worker-beneficiaries, or in which they may have a vested right, at the time this Act becomes effective.

The provision of Section 32 of this Act, with regard to production and income-sharing shall apply to farms operated by multinational corporations.

During the transition period, the new owners shall be assisted in their efforts to learn modern technology in production. Enterprises which show a willingness and commitment and good faith efforts to impart voluntarily such advanced technology will be given preferential treatment where feasible.

In no case shall a foreign corporation, association, entity or individual enjoy any rightr or privileges better than those enjoyed by a domestic corporation, association, entity or individual.

SEC. 9. Ancestral Lands. - For purposes of this Act, ancestral lands of each indigenous cultural community shall include, but not be limited to, lands in the actual, continuous and open possession and occupation of the community and its members: Provided, That the Torrens System shall be respected.

The right of these communities to their ancestral lands shall be protected to ensure their economic, social and cultural well-being. In line with the other principles of self-determination and autonomy, the systems of land ownership, land use, and the modes of settling land disputes of all these communities must be recognized and respected.

Any provision of law to the contrary notwithstanding, the PARC may suspend the implementation of this Act with respect to ancestral lands for the purpose of identifying and delineating such lands: Provided, That in the autonomous regions, the respective legislatures may enact their own laws on ancestral domain subject to the provisions of the Constitution and the principles enunciated in this Act and other national laws.

G.R. No. 158228 - DAR vs. DECS

FACTS:

This petition for review on certiorari seeks to set aside the decision1 of the Court of Appeals dated October 29, 2002 in CA-G.R. SP No. 64378, which reversed the August 30, 2000 decision of the Secretary of Agrarian Reform, as well as the Resolution dated May 7, 2003, which denied petitioner’s motion for reconsideration.

In controversy are Lot No. 2509 and Lot No. 817-D consisting of an aggregate area of 189.2462 hectares located at Hacienda Fe, Escalante, Negros Occidental and Brgy. Gen. Luna, Sagay, Negros Occidental, respectively. On October 21, 1921, these lands were donated by the late Esteban Jalandoni to respondent DECS (formerly Bureau of Education).2 Consequently, titles thereto were transferred in the name of respondent DECS under Transfer Certificate of Title No. 167175.3

On July 15, 1985, respondent DECS leased the lands to Anglo Agricultural Corporation for 10 agricultural crop years, commencing from crop year 1984-1985 to crop year 1993-1994. The contract of lease was subsequently renewed for another 10 agricultural crop years, commencing from crop year 1995-1996 to crop year 2004-2005.4

On June 10, 1993, Eugenio Alpar and several others, claiming to be permanent and regular farm workers of the subject lands, filed a petition for Compulsory Agrarian Reform Program (CARP) coverage with the Municipal Agrarian Reform Office (MARO) of Escalante.5

After investigation, MARO Jacinto R. Piñosa, sent a "Notice of Coverage" to respondent DECS, stating that the subject lands are now covered by CARP and inviting its representatives for a conference with the farmer beneficiaries.6 Then, MARO Piñosa submitted his report to OIC-PARO Stephen M. Leonidas, who recommended to the DAR Regional Director the approval of the coverage of the landholdings.

On August 7, 1998, DAR Regional Director Dominador B. Andres approved the recommendation, the dispositive portion of which reads:

WHEREFORE, all the foregoing premises considered, the petition is granted. Order is hereby issued:

1. Placing under CARP coverage Lot 2509 with an area of 111.4791 hectares situated at Had. Fe, Escalante, Negros Occidental and Lot 817-D with an area of 77.7671 hectares situated at Brgy. Gen. Luna, Sagay, Negros Occidental;

2. Affirming the notice of coverage sent by the DAR Provincial Office, Negros Occidental dated November 23, 1994;

3. Directing the Provincial Agrarian Reform Office of Negros Occidental and the Municipal Agrarian Reform Officers of Sagay and Escalante to facilitate the acquisition of the subject landholdings and the distribution of the same qualified beneficiaries.

SO ORDERED.7

Respondent DECS appealed the case to the Secretary of Agrarian Reform which affirmed the Order of the Regional Director. 8

Aggrieved, respondent DECS filed a petition for certiorari with the Court of Appeals, which set aside the decision of the Secretary of Agrarian Reform.9

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Hence, the instant petition for review.

The pivotal issue to be resolved in this case is whether or not the subject properties are exempt from the coverage of Republic Act No. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1998 (CARL).

The general policy under CARL is to cover as much lands suitable for agriculture as possible.10 Section 4 of R.A. No. 6657 sets out the coverage of CARP. It states that the program 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 or 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 as 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.

Section 3(c) thereof defines "agricultural land," as "land devoted to agricultural activity as defined in this Act and not classified as mineral, forest, residential, commercial or industrial land." The term "agriculture" or "agricultural activity" is also defined by the same law as follows:

Agriculture, Agricultural Enterprises or Agricultural Activity means the cultivation of the soil, planting of crops, growing of fruit trees, raising of livestock, poultry or fish, including the harvesting of such farm products, and other farm activities, and practices performed by a farmer in conjunction with such farming operations done by persons whether natural or juridical.11

The records of the case show that the subject properties were formerly private agricultural lands owned by the late Esteban Jalandoni, and were donated to respondent DECS. From that time until they were leased to Anglo Agricultural Corporation, the lands continued to be agricultural primarily planted to sugarcane, albeit part of the public domain being owned by an agency of the government.12 Moreover, there is no legislative or presidential act, before and after the enactment of R.A. No. 6657, classifying the said lands as mineral, forest, residential, commercial or industrial land. Indubitably, the subject lands fall under the classification of lands of the public domain devoted to or suitable for agriculture.

Respondent DECS sought exemption from CARP coverage on the ground that all the income derived from its contract of lease with Anglo Agricultural Corporation were actually, directly and exclusively used for educational purposes, such as for the repairs and renovations of schools in the nearby locality.

Petitioner DAR, on the other hand, argued that the lands subject hereof are not exempt from the CARP coverage because the same are not actually, directly and exclusively used as school sites or campuses, as they are in fact leased to Anglo Agricultural Corporation. Further, to be exempt from the coverage, it is the land per se, not the income derived therefrom, that must be actually, directly and exclusively used for educational purposes.

We agree with the petitioner.

Section 10 of R.A. No. 6657 enumerates the types of lands which are exempted from the coverage of CARP as well as the purposes of their exemption, viz:

x x x x x x x x x

c) Lands actually, directly and exclusively used and found to be necessary for national defense, school sites and campuses, including experimental farm stations operated by public or private schools for educational purposes, … , shall be exempt from the coverage of this Act.13

x x x x x x x x x

Clearly, a reading of the paragraph shows that, in order to be exempt from the coverage: 1) the land must be "actually, directly, and exclusively used and found to be necessary;" and 2) the purpose is "for school sites and campuses, including experimental farm stations operated by public or private schools for educational purposes."

The importance of the phrase "actually, directly, and exclusively used and found to be necessary" cannot be understated, as what respondent DECS would want us to do by not taking the words in their literal and technical definitions. The words of the law are clear and unambiguous. Thus, the "plain meaning rule" or verba legis in statutory construction is applicable in this case. Where the words of a statute are clear, plain and free from ambiguity, it must be given its literal meaning and applied without attempted interpretation.14

We are not unaware of our ruling in the case of Central Mindanao University v. Department of Agrarian Reform Adjudication Board,15 wherein we declared the land subject thereof exempt from CARP coverage. However, respondent DECS’ reliance thereon is misplaced because the factual circumstances are different in the case at bar.

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Firstly, in the CMU case, the land involved was not alienable and disposable land of the public domain because it was reserved by the late President Carlos P. Garcia under Proclamation No. 476 for the use of Mindanao Agricultural College (now CMU).16 In this case, however, the lands fall under the category of alienable and disposable lands of the public domain suitable for agriculture.

Secondly, in the CMU case, the land was actually, directly and exclusively used and found to be necessary for school sites and campuses. Although a portion of it was being used by the Philippine Packing Corporation (now Del Monte Phils., Inc.) under a "Management and Development Agreement", the undertaking was that the land shall be used by the Philippine Packing Corporation as part of the CMU research program, with direct participation of faculty and students. Moreover, the land was part of the land utilization program developed by the CMU for its "Kilusang Sariling Sikap Project" (CMU-KSSP), a multi-disciplinary applied research extension and productivity program.17 Hence, the retention of the land was found to be necessary for the present and future educational needs of the CMU. On the other hand, the lands in this case were not actually and exclusively utilized as school sites and campuses, as they were leased to Anglo Agricultural Corporation, not for educational purposes but for the furtherance of its business. Also, as conceded by respondent DECS, it was the income from the contract of lease and not the subject lands that was directly used for the repairs and renovations of the schools in the locality.

Anent the issue of whether the farmers are qualified beneficiaries of CARP, we disagree with the Court of Appeals’ finding that they were not.

At the outset, it should be pointed out that the identification of actual and potential beneficiaries under CARP is vested in the Secretary of Agrarian Reform pursuant to Section 15, R.A. No. 6657, which states:

SECTION 15. Registration of Beneficiaries. — The DAR in coordination with the Barangay Agrarian Reform Committee (BARC) as organized in this Act, shall register all agricultural lessees, tenants and farmworkers who are qualified to be beneficiaries of the CARP. These potential beneficiaries with the assistance of the BARC and the DAR shall provide the following data:

(a) names and members of their immediate farm household;

(b) owners or administrators of the lands they work on and the length of tenurial relationship;

(c) location and area of the land they work;

(d) crops planted; and

(e) their share in the harvest or amount of rental paid or wages received.

A copy of the registry or list of all potential CARP beneficiaries in the barangay shall be posted in the barangay hall, school or other public buildings in the barangay where it shall be open to inspection by the public at all reasonable hours.

In the case at bar, the BARC certified that herein farmers were potential CARP beneficiaries of the subject properties.18 Further, on November 23, 1994, the Secretary of Agrarian Reform through the Municipal Agrarian Reform Office (MARO) issued a Notice of Coverage placing the subject properties under CARP. Since the identification and selection of CARP beneficiaries are matters involving strictly the administrative implementation of the CARP,19 it behooves the courts to exercise great caution in substituting its own determination of the issue, unless there is grave abuse of discretion committed by the administrative agency. In this case, there was none.

The Comprehensive Agrarian Reform Program (CARP) is the bastion of social justice of poor landless farmers, the mechanism designed to redistribute to the underprivileged the natural right to toil the earth, and to liberate them from oppressive tenancy. To those who seek its benefit, it is the means towards a viable livelihood and, ultimately, a decent life. The objective of the State is no less certain: "landless farmers and farmworkers will receive the highest consideration to promote social justice and to move the nation toward sound rural development and industrialization."20

WHEREFORE, in view of the foregoing, the petition is GRANTED. The decision of the Court of Appeals dated October 29, 2002, in CA-G.R. SP No. 64378 is REVERSED and SET ASIDE. The decision dated August 30, 2000 of the Secretary of Agrarian Reform placing the subject lands under CARP coverage, is REINSTATED.

G.R. No. 169514- March 30, 2007- CONFED vs.DAR

FACTS:

Confederation of Sugar Producers Association, Inc., et al. It seeks, inter alia, to enjoin the Department of Agrarian Reform, the Land Bank of the Philippines, and the Land Registration Authority from "subjecting the sugarcane farms of Petitioner Planters to eminent domain or compulsory acquisition without filing the necessary expropriation proceedings pursuant to the provisions of Rule 67 of the Rules of Court and/or without the application or conformity of a majority of the regular farmworkers on said farms."

The petition is filed by the following: CONFED, NFSP, UNIFED and PANAYFED represented by their Chairman or President, namely, Bernardo C. Trebol, Enrique D. Rojas, Manuel R. Lamata and Francis P. Trenas, respectively. On the other hand, named as respondents are the Department of Agrarian Reform (DAR), the Land Bank of the Philippines (LBP) and the Land Registration Authority (LRA).

Petitioners CONFED, NFSP, UNIFED and PANAYFED claim that their members own or administer private agricultural lands devoted to sugarcane. They and their predecessors-in-interest have been planting sugarcane on their lands allegedly since time immemorial. While their petition is denominated as one for prohibition and mandamus, the petitioners likewise seek to nullify paragraphs (d), (e) and (f) of Section 165 of Republic Act No. (RA) 6657, otherwise known as the Comprehensive Agrarian Reform Law. In other words, their arguments, which will be discussed shortly, are anchored on the proposition that these provisions are unconstitutional.

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They allege the following grounds in support of their petition:

A. RESPONDENT DAR ACTED WITHOUT OR IN EXCESS OF JURISDICTION OR WITH GRAVE ABUSE OF DISCRETION BY THE COMMISSION OF THE FOLLOWING ACTS:

1. By Exercising the Power of Eminent Domain to Deprive Thousands of Landowners, including the Member-Planters of Petitioner-Federations of their Private Agricultural Lands, without Filing the Necessary Expropriation Proceedings pursuant to Rule 67 of the Rules of Court in Gross Violation of the Bill of Rights of the Constitution and in Lawless Usurpation of the Exclusive Power of the Supreme Court to Promulgate Rules of Procedure as vested by the Constitution. Paragraphs (d), (e) and (f) Section 16 of R.A. 6657 are Unconstitutional.

2. In Usurping the Powers and Functions of the Presidential Agrarian Reform Council or PARC by Promulgating and Issuing Ultra Vires Rules and Procedures Governing the Acquisition and Distribution of Agricultural Lands in Gross Violation of the Provisions of E.O. 229 and R.A. 6657 or the CARL.

3. In Unlawfully Delegating to the MAROs the Authority to Issue Notices of Coverage and Acquisition to Landowners of Private Agricultural Lands in their Respective Cities and Municipalities in violation of R.A. 6657.

4. In Subjecting the Sugar Lands of the Planters to CARP Coverage and Acquisition, Without First Ascertaining: No. 1. Whether there are Regular Farmworkers on said lands and No. 2. Whether the Regular Farmworkers, if any, are Interested to Own, Directly or Collectively the Lands they Till.

5. In Choosing and Designating Non-Tillers, Non-Regular Farmworkers and Outsiders of the sugar lands as Beneficiaries and later, Forcibly Installing Them in said lands.

6. By Disturbing and Outlawing the Farming System of LABOR ADMINISTRATION obtaining in the Sugar Lands Knowing As it Does that Under R.A. 6657 and By the Very Definition of Agrarian Reform in said Act, Labor Administration is Recognized as an Alternative Mode of Agrarian Reform.

7. In Assuming Jurisdiction, through DARAB, over Cases and Controversies which, by virtue of the provisions of B.P. 129 or the Judiciary Reorganization Act, in relation to P.D. 946 should fall under the original jurisdiction of the Regional Trial Courts.

B. THE LAND BANK OF THE PHILIPPINES ACTED WITHOUT OR IN EXCESS OF JURISDICTION OR WITH GRAVE ABUSE OF DISCRETION.

By Making or Causing Payment, Through a Deposit or Opening a Trust Account with a Bank designated by DAR for the Alleged Compensation for the Land, without Waiting For the Final Determination of Such Compensation By the Court.

C. THE LAND REGISTRATION AUTHORITY OR LRA ACTED WITHOUT OR IN EXCESS OF JURISDICTION OR WITH GRAVE ABUSE OF DISCRETION.

By Authorizing the Registers of Deeds under its Jurisdiction to Cancel, upon being directed by DAR, the Certificates of Title of the Registered Owners without the Notice to or Consent of the latter or an Order from the Court in Gross Violation of the Property Rights

The petitioners rely on the case of Visayas Refining Company v. Camus and Paredes7 decided by the Court in 1919. Visayan Refining Co. questioned the validity of the proceedings on the ground that there was no law enacted by the Philippine Legislature authorizing the exercise of the power of eminent domain to acquire land for military or aviation purposes.

The petitioners thus contend that a landowner cannot be deprived of his property until expropriation proceedings are instituted in court. They insist that the expropriation proceedings to be followed are those prescribed under Rule 67 of the Revised Rules of Court. In other words, for a valid exercise of the power of eminent domain, the Government must institute the necessary expropriation proceedings in the competent court in accordance with the provisions of the Rules of Court.

The DAR, however, according to the petitioners, particularly through the process of compulsory acquisition, has managed to operate outside of the Constitution and the Rules of Court. They alleged that the compulsory acquisition process adopted by the DAR is absolutely without any constitutional or lawful basis whatsoever. It is allegedly "utterly repugnant to the principle of eminent domain" or "expropriation" and an "unmitigated and lawless usurpation of the constitutional power of the Supreme Court to promulgate rules of procedure." As such, the process of compulsory acquisition is allegedly null and void.

According to the petitioners, the foregoing provisions have not been repealed by RA 6657; hence, in consonance therewith, the acquisition of private agricultural lands for purposes of agrarian reform can only be exercised by the Government through expropriation proceedings under Rule 67 of the Rules of Court. On the other hand, the process of compulsory acquisition adopted by the DAR, as embodied in its administrative orders, is allegedly violative of the landowners’ rights enshrined in the Constitution.

The petitioners theorize that, in the same manner, the DAR cannot be allowed to take possession of the property of a landowner, by mere deposit of the compensation that it has summarily fixed under paragraph (e), without having to go to court.

The Respondents alleged that; The Land Bank urges the Court to dismiss the petition since the constitutionality of RA 6657 had already been categorically upheld by the Court in Association of Small Landowners. Considering that the Court is not a trier of facts, the Land Bank argues that these matters are better threshed out in a trial court.

The Land Bank is also of the view that the framers of the Constitution did not intend to require full payment of just compensation before taking of private lands for agrarian reform purposes could be effected.

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By insisting that title should remain with the landowners until the issue of just compensation is finally adjudicated by the courts, the petitioners allegedly simply want to interminably delay the acquisition of lands covered by RA 6657.

Debunking the petitioners’ argument that it may have been "unwise" and "impractical" for Congress to include sugar lands within the coverage of RA 6657 as certain crops, including sugar, are more efficiently and more economically produced by organized, mechanized, plantation-type agriculture than by small, "parcelized," owner-cultivated farms, the Land Bank opines that the wisdom, morality or practicability of acquiring sugar lands for agrarian reform is beyond the ambit of judicial review. The remedy to address this issue, according to the Land Bank, is legislative not judicial. Absent any amendment to RA 6657 with respect to its coverage, there can be no basis to prohibit the DAR and the Land Bank from acquiring all agricultural lands, sugar lands included, for purposes of agrarian reform.

Through the Office of the Solicitor General, the DAR urges the Court to dismiss the petition outright on the ground that it is premature. It avers that when issues of constitutionality are raised, as in this case, the Court can exercise its power of judicial review only if the following requisites are present: (1) an actual and appropriate case exists; (2) a personal and substantial interest of the party raising the constitutional question; (3) the exercise of judicial review is pleaded at the earliest possible opportunity; and (4) the constitutional question is the lis mota of the case.34

In the present case, the DAR contends that the first requisite, i.e., the existence of an actual or appropriate case, is not attendant. There is allegedly no showing that the petitioners’ sugar lands have been subjected to compulsory acquisition by the DAR. Even the petition itself is allegedly devoid of such allegation. Accordingly, there is no actual case or controversy to speak of and the instant petition is, at best, premature.

RULING:

The validity of Section 16, including paragraphs (d), (e) and (f) thereof, of RA 6657 has already been affirmed in Association of Small Landowners

In Association of Small Landowners, the Court categorically passed upon and upheld the validity of Section 16 of RA 6657, including paragraphs (d), (e) and (f), which sets forth the manner of acquisition of private agricultural lands and ascertainment of just compensation, in this wise:

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

Upon receipt by the landowner of the corresponding payment, or in case of rejection or no response from the landowner, upon the deposit with an accessible bank designated by the DAR of the compensation in cash or in LBP bonds in accordance with this Act, the DAR shall take immediate possession of the land and shall request the proper Register of Deeds to issue a Transfer Certificate of Title (TCT) in the name of the Republic of the Philippines. The DAR shall thereafter proceed with the redistribution of the land to the qualified beneficiaries. x x x the DAR shall conduct summary administrative proceedings to determine the compensation for the land by requiring the landowner, the LBP and other interested parties to submit evidence as to the just compensation for the land, within fifteen (15) days from the receipt of the notice. After the expiration of the above period, the matter is deemed submitted for decision. The DAR shall decide the case within thirty (30) days after it is submitted for decision.

The method of ascertaining just compensation under the aforecited decrees constitutes impermissible encroachment on judicial prerogatives. It tends to render this Court inutile in a matter which under this Constitution is reserved to it for final determination. Thus, although in an expropriation proceeding the court technically would still have the power to determine the just compensation for the property, following the applicable decrees, its task would be relegated to simply stating the lower value of the property as declared either by the owner or the assessor. As a necessary consequence, it would be useless for the court to appoint commissioners under Rule 67 of the Rules of Court. Moreover, the need to satisfy the due process clause in the taking of private property is seemingly fulfilled since it cannot be said that a judicial proceeding was not had before the actual taking.

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

This time we answer in the affirmative.

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

A reading of the aforecited Section 16(d) will readily show that it does not suffer from the arbitrariness that rendered the challenged decrees constitutionally objectionable. Although the proceedings are described as summary, the landowner and other interested parties are nevertheless allowed an opportunity to submit evidence on the real value of the property. But more importantly, the determination of the just compensation by the DAR is not by any means final and conclusive upon the landowner or any other interested party, for Section(f) clearly provides:

(f) Any party who disagrees with the decision may bring the matter to the court of proper jurisdiction for final determination of just compensation.

The determination made by the DAR is only preliminary unless accepted by all parties concerned. Otherwise, the courts of justice will still have the right to review with finality the said determination in the exercise of what is admittedly a judicial function.35

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On the matter of when transfer of possession and ownership of the land to the Government is reckoned, Association of Small Landowners instructs:

The CARP Law, for its part, conditions the transfer of possession and ownership of the land to the government on receipt by the landowner of the corresponding payment or the deposit by the DAR of the compensation in cash or LBP bonds with an accessible bank. Until then, title also remains with the landowner. No outright change of ownership is contemplated either.36

DAR’s compulsory acquisition procedure is based on Section 16 of RA 6657. It does not, in any way, preclude judicial determination of just compensation

Contrary to the petitioners’ submission that the compulsory acquisition procedure adopted by the DAR is without legal basis, it is actually based on Section 16 of RA 6657. Under the said law, there are two modes of acquisition of private agricultural lands: compulsory and voluntary. The procedure for compulsory acquisition is that prescribed under Section 16 of RA 6657.

In Roxas & Co., Inc. v. Court of Appeals,41 the Court painstakingly outlined the procedure for compulsory acquisition, including the administrative orders issued by the DAR in relation thereto, in this manner:

In the compulsory acquisition of private lands, the landholding, the landowners and the farmer beneficiaries must first be identified. After identification, the DAR shall send a Notice of Acquisition to the landowner, by personal delivery or registered mail, and post it in a conspicuous place in the municipal building and barangay hall of the place where the property is located. Within thirty days from receipt of the Notice of Acquisition, the landowner, his administrator or representative shall inform the DAR of his acceptance or rejection of the offer. If the landowner accepts, he executes and delivers a deed of transfer in favor of the government and surrenders the certificate of title. Within thirty days from the execution of the deed of transfer, the Land Bank of the Philippines (LBP) pays the owner the purchase price. If the landowner rejects the DAR’s offer or fails to make a reply, the DAR conducts summary administrative proceedings to determine just compensation for the land. The landowner, the LBP representative and other interested parties may submit evidence on just compensation within fifteen days from notice. Within thirty days from submission, the DAR shall decide the case and inform the owner of its decision and the amount of just compensation. Upon receipt by the owner of the corresponding payment, or, in case of rejection or lack of response from the latter, the DAR shall deposit the compensation in cash or in LBP bonds with an accessible bank. The DAR shall immediately take possession of the land and cause the issuance of a transfer certificate of title in the name of the Republic of the Philippines. The land shall then be redistributed to the farmer beneficiaries. Any party may question the decision of the DAR in the regular courts for final determination of just compensation.

The DAR has made compulsory acquisition the priority mode of land acquisition to hasten the implementation of the Comprehensive Agrarian Reform Program (CARP). Under Section 16 of the CARL, the first step in compulsory acquisition is the identification of the land, the landowners and the beneficiaries. However, the law is silent on how the identification process must be made. To fill in this gap, the DAR issued on July 26, 1989 Administrative Order No. 12, Series of 1989, which set the operating procedure in the identification of such lands.

The inclusion of sugar lands in the coverage of RA 6657 delves into the wisdom of an act of Congress, beyond the ambit of judicial review The other issues raised by the petitioners require factual determination which the Court cannot properly undertake in the present case

WHEREFORE, premises considered, the petition is DISMISSED for lack of merit.

DAR vs. POLO COOCONUT PLANTATION (GR. No. 168787)

FACTS:

Polo Coconut Plantation Co., Inc. (PCPCI) sought to convert 280 hectares of its Polo Coconut Plantation[7] (Polo estate) in Tanjay,

Negros Oriental into a special economic zone (ecozone) under the Philippine Economic Zone Authority (PEZA). On December 19,

1998, PEZA issued Resolution No. 98-320 favorably recommending the conversion of the Polo estate into an ecozone[8] subject to

certain terms and conditions. The following year, PCPCI applied for the reclassification of its agricultural lands into mixed residential,

commercial and industrial lands with the municipal government of Tanjay. Sangguniang Bayan of Tanjay adopted Resolution No.

344 granting PCPCI's application When Tanjay became a city, its Sangguniang Panglungsod adopted Resolution No. 16 approving

Tanjay's Comprehensive Land Use Plan and Zoning Ordinance where PCPCI's real properties, including the Polo estate, were

reclassified as mixed residential, commercial and industrial lands. Department of Agrarian Reform (DAR), through Provincial

Agrarian Reform Officer Stephen M. Leonidas, notified PCPCI that 394.9020 hectares of the Polo estate had been placed under the

Comprehensive Agrarian Reform Program (CARP) and would be acquired by the government. A new certificate of title was issued in

the name of the Republic of the Philippines.The next day, that title was cancelled and another was issued in the name of petitioners

in G.R. No. 169271 (petitioners-beneficiaries).[13]

Aggrieved, PCPCI filed a petition for certiorari[16] in the Court of Appeals (CA) asserting that the DAR acted with grave abuse of

discretion in placing the Polo estate under the CARP. It argued that the Polo estate should not be subjected to the CARP because

Resolution No. 16 had already designated it as mixed residential, commercial and industrial land. Moreover, petitioners-beneficiaries

were not qualified to receive land under the CARP.

CA found that the Polo estate was no longer agricultural land when the DAR placed it under the CARP in view of Resolution No. 16.

Furthermore, petitioners-beneficiaries were not qualified beneficiaries as they were not tenants of PCPCI. Thus:

Both the DAR and petitioners-beneficiaries moved for reconsideration but they were denied. Hence, this recourse.

The DAR asserts that the reclassification of the Polo estate under Resolution No. 16 as mixed residential, commercial and industrial land did not place it beyond the reach of the CARP. Petitioners-beneficiaries, on the other hand, insist that they were qualified

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beneficiaries. While they were neither farmers nor regular farmworkers of PCPCI, they were either seasonal or other farmworkers.

ISSUE: WON the Polo estate is covered by CARP.

RULING: YES

The presumption is that, “all agricultural land are presumed by the law that they are subjected to CARP unless otherwise the owner of the land proven it on the contrary. SC held that reclassified agricultural lands must undergo the process of conversion in the DAR

before they may be used for other purposes. Since the DAR never approved the conversion of the Polo estate from agricultural to another use, the land was never placed beyond the scope of the CARP.

The approval of the DAR for the conversion of agricultural land into an industrial estate is a condition precedent for its conversion into an ecozone. A proposed ecozone cannot be considered for Presidential Proclamation unless the landowner first submits to PEZA a land use conversion clearance certificate from the DAR.

G.R. No. 180471               March 26, 2010Alangilan Realty and Development Corporation vs. Office of the President

FACTS:

Petitioner is the owner/developer of a 17.4892-hectare land in Batangas City (Alangilan landholding). Petitioner filed an Application and/or Petition for Exclusion/Exemption from Comprehensive Agrarian Reform Program (CARP) Coverage3 of the Alangilan landholding with the Municipal Agrarian Reform Office (MARO) of the Department of Agrarian Reform (DAR). It averred that, in 1982, the Sangguniang Bayan of Batangas City classified the subject landholding as reserved for residential under a zoning ordinance (1982 Ordinance), which was approved by the Human Settlement Regulatory Commission. It further alleged that, Sangguniang Panglungsod of Batangas City approved the City Zoning Map and Batangas Comprehensive Zoning and Land Use Ordinance (1994 Ordinance), reclassifying the landholding as residential-1. Petitioner thus claimed exemption of its landholding from the coverage of the CARP.

DAR Secretary Ernesto Garilao issued an Order denying petitioner’s application for exemption. The DAR Secretary noted that, as of February 15, 1993, the Alangilan landholding remained agricultural, reserved for residential. It was classified as residential-1 only on December 12, 1994 under Sangguniang Panlalawigan Resolution No. 709, series of 1994. Clearly, the subject landholding was still agricultural at the time of the effectivity of Republic Act No. 6657, or the Comprehensive Agrarian Reform Law (CARL), on June 15, 1988. The qualifying phrase reserved for residential means that the property is still classified as agricultural, and is covered by the CARP. Petitioner moved for reconsideration of the Order, arguing that the Alangilan landholding was already reserved for residential use as early as October 6, 1982. DAR Secretary was not at all persuaded, and denied petitioner’s motion for reconsideration on December 21, 1998, viz.:

Administrative Order No. 6, series of 1994 provides that "lands that are classified as commercial, industrial or residential before 15 June 1988 no longer need any conversion clearance"; as such, they are exempt from the coverage of R.A. [No.] 6657.

The phrase "Reserved for Residential" is not a zoning classification contemplated in the aforestated A.O. as to exempt a particular land from the coverage of R.A. 6657. More so in this case, because the phrase was attached to the word "Agricultural"; in fact, we can say that it merely qualified the term "Agricultural." We believe that the correct interpretation of the zoning should be that the land is agricultural, but it may be classified and used for residential purposes in some future time, precisely, because it has been reserved for residential use. This interpretation is supported by the fact that the zoning of the land became Residential only in 1994, per Ordinance No. 3, series of 1994, which established a Comprehensive Zoning Regulation and Land Use for Batangas City. To reiterate, the Sanggunian Members of Batangas City would have expressly, unequivocably, and unqualifiedly zoned the area as "residential" if they had intended it to be zoned as such in 1982. They never did until the issuance of Ordinance No. 3 in 1994.

As to what ordinance the Applicant was referring to was not specified. However, it seems obvious that he was referring to the 1994 Comprehensive Zoning Regulations and Land Use for Batangas City (Ordinance No. 3, series of 1994). The previous zoning ordinance, i.e. the Batangas City Zoning Ordinance approved under HSRC Resolution No. R-92, series of 1982, dated 6 October 1982, classified the said landholding as "Agricultural, Reserved for Residential." It was Ordinance No. 3, series of 1994 that explicitly classified the area as "Residential-1."

This Office, therefore, is convinced that the zoning classification of the Alangilan Landholding prior to 15 June 1988 was Agricultural, although with the qualification that it had been reserved for residential use. The ocular inspection conducted in 1996 by the representatives of the MARO, PARO and RARO confirmed that the Alangilan Landholding was still used for agricultural purposes. The area was planted with mangoes and coconuts. A motion for reconsideration was filed, but the motion also suffered the same fate, as the OP denied it.

Petitioner went up to the CA via a petition for review on certiorari, assailing the OP decision. CA dismissed the petition. The CA noted the report of MARO, Provincial Agrarian Reform Office (PARO), and Regional Agrarian Reform Office (RARO) that the Alangilan landholding was devoted to agricultural activities prior to the effectivity of the CARP.

ISSUE: WON THE COURT OF APPEALS SERIOUSLY ERRED IN HOLDING THAT PETITIONER’S ALANGILAN LANDHOLDING IS SUBJECT TO THE COVERAGE OF THE COMPREHENSIVE AGRARIAN REFORM LAW, NOTWITHSTANDING THAT THE PROPERTY HAS BEEN CONVERTED TO NON-AGRICULTURAL USES BY THE ZONING ORDINANCE OF THE CITY OF BATANGAS PRIOR TO THE LAW.14

RULING:

Indeed, lands devoted to non-agricultural activity are outside the coverage of CARL. These include lands previously converted into non-agricultural uses prior to the effectivity of the CARL on June 15, 1988. Unfortunately, petitioner failed to convince us that the Alangilan landholding ceased to be agricultural at the time of the effectivity of the CARL.

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It is beyond cavil that the Alangilan landholding was classified as agricultural, reserved for residential in 1982, and was reclassified as residential-1 in 1994. However, contrary to petitioner’s assertion, the term reserved for residential does not change the nature of the land from agricultural to non-agricultural. As aptly explained by the DAR Secretary, the term reserved for residential simply reflects the intended land use. It does not denote that the property has already been reclassified as residential, because the phrase reserved for residential is not a land classification category.

Indubitably, at the time of the effectivity of the CARL in 1988, the subject landholding was still agricultural. This was bolstered by the fact that the Sangguniang Panlalawigan had to pass an Ordinance in 1994, reclassifying the landholding as residential-1. If, indeed, the landholding had already been earmarked for residential use in 1982, as petitioner claims, then there would have been no necessity for the passage of the 1994 Ordinance.

Not having been converted into, or classified as, residential before June 15, 1988, the Alangilan landholding is, therefore, covered by the CARP. The subsequent reclassification of the landholding as residential-1 in 1994 cannot place the property outside the ambit of the CARP, because there is no showing that the DAR Secretary approved the reclassification.

RETENTION LIMITS

G.R. No. 158314             June 3, 2004SAMAHAN NG MAGSASAKA vs.MARIETTA VALISNO, ET AL

ISSUE: Whether or not the grandchildren of the late Dr. Nicolas Valisno Sr. are entitled to retention rights as landowners under Republic Act No. 6657, or the Comprehensive Agrarian Reform Law (hereafter, "CARL").

FACTS:

The original 57-hectare property, situated in La Fuente, Sta. Rosa, Nueva Ecija, was formerly registered in the name of Dr. Nicolas Valisno, Sr. under Transfer Certificate of Title No. NT-38406. Before the effectivity of Presidential Decree No. 27,1 the land was the subject of a judicial ejectment suit, whereby in 1971, the Valisnos’ tenants were ejected from the property.2 Among these tenants was Dominador Maglalang, who represents the SMSJ in the instant proceedings.

Meanwhile, on October 20 and 21, 1972, Dr. Valisno mortgaged 12 hectares of his property to Renato and Angelito Banting.3 Thereafter, the property was subdivided into ten lots and on November 8, 1972, individual titles were issued in the name of the eight children of Nicolas, Angelito Banting, and Renato Banting.4

After the mortgage on the 12 hectare portion was foreclosed and the property sold at public auction, four grandchildren of Dr. Nicolas Valisno, namely: Maria Cristina F. Valisno, daughter of Romulo D. Valisno; and Leonora Valisno Yujuico, Benedicto Valisno Yujuico and Gregorio Valisno Yujuico, children of Marietta Valisno redeemed the same from the mortgagees.5 At the time of the redemption, Maria Cristina, Leonora and Gregorio were all minors; only Benedicto was of legal age, being then 26 years old.6 The redemption was made on October 25, 1973, but the titles to the land were not transferred to the redemptioners until November 26, 1998.7

Subsequently, the entire 57-hectare property became the subject of expropriation proceedings before the Department of Agrarian Reform ("DAR"). In 1994, Dominador Maglalang, in behalf of the SMSP, filed a petition for coverage of the subject landholding under the CARL, which petition was dismissed for want of jurisdiction.8 On June 14, 1995, Rogelio Chaves, DAR Provincial Agrarian Reform Officer ("PARO"), issued a Memorandum stating that the property had been subdivided among the heirs of Dr. Nicolas Valisno Sr. before the issuance of PD 27 into tracts of approximately six hectares each.9 Nevertheless, PARO Chaves added that the excess over the five-hectare retention limit could still be covered under RA 6657.10

On appeal, the Office of the Regional Director issued an Order dated January 2, 1996, declaring the Valisno property exempt from the coverage of PD 27 and RA 6657.11 This was reversed by then Secretary Garilao, who held that the property is covered by the Comprehensive Agrarian Reform Program, subject to the retention rights of the heirs of Nicolas, Sr. The Valisno heirs filed a motion for reconsideration of the said order, but the same was denied.

On September 25, 1997, the Valisno heirs filed a Consolidated Application for Retention and Award under RA 6657. Specifically, the petition was filed by (1) Adela, Aquiles, Leandro, Honorio, Lumen, Nicolas and Marietta Valisno, seven children of Nicolas Valisno, Sr., who applied for retention rights as landowners; (2) Randy V. Wagner, Maria Marta B. Valisno, Noelito Valisno, Mary Ann L. Valisno, Philip V. Branzuela and Brendon V. Yujuico, grandchildren of Nicolas Sr. (hereafter collectively the "Grandchildren-Awardees"), who applied to be considered qualified child-awardees; and (3) Ma. Cristina Valisno, Benedicto V. Yujuico, Gregorio V. Yujuico and Leonora V. Yujuico, likewise grandchildren of Nicolas Sr. (hereafter collectively the "Redemptioner-Grandchildren"), who applied for retention rights as landowners over the 12-hectare portion of the property alleged to have been mortgaged by Nicolas Sr. in 1972 to Angelito and Renato Banting.

The SMSJ, through Dominador Maglalang, opposed the Consolidated Application for Retention, specifically objecting to the award in favor of the Grandchildren-Awardees because they are not actually tilling nor directly managing the land in question as required by law.

On November 4, 1998, Regional Director Renato F. Herrera issued an Order which pertinently reads:

WHEREFORE, premises considered, an ORDER is hereby issued as follows:

1. GRANTING the application for retention of the heirs of Dr. Nicolas Valisno, Sr., namely: Marietta Valisno; Honorio Valisno; Leandro Valisno; Adela Valisno; Nicolas Valisno, Jr.; Aquiles Valisno; and Lumen Valisno of not more than five (5) hectares each or a total of 35 hectares covered by Title Nos. 118446, 118443, 118442, 118440, 118445, 118441 and 118444, respectively, all located at La Fuente, Sta. Rosa, Nueva Ecija;

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2. PLACING the excess of 19.0 hectares, more or less, under RA 6657 and acquiring the same thru Compulsory Acquisition for distribution to qualified farmer-beneficiaries taking into consideration the basic qualifications set forth by law;

3. DENYING the request for the award to children of the applicants for utter lack of merit; and

4. DIRECTING the applicants-heirs to cause the segregation and survey of the retained area at their own expense and to submit within thirty (30) days the final approved survey plan to this Office.

SO ORDERED.12

On appeal, the DAR Secretary affirmed the Order of the Regional Director with the following relevant ratiocination:

In the second assignment of error, appellants faulted the Regional Director for not giving due consideration to the two (2) mortgages constituted by the original owner over a portion of his landholding in 1972 and redeemed by the latter’s grandchildren in 1973, when the 12-hectare land subject of the mortgages were ordered to be distributed to CARP beneficiaries.

x x x           x x x           x x x

The alleged redemption of the mortgaged property by the four (4) grandchildren of Nicolas Valisno, Sr., namely Ma. Cristina, Leonora, Gregorio and Benedicto, is not likewise worthy of any credence. The mortgaged property was allegedly redeemed on October 25, 1973. From the evidence on record, three (3) of the alleged redemptioners represented to be of legal age in the Discharge of Mortgage were still minors, hence, without any legal capacity at the time the redemption was made.13

On June 23, 2000, the motion for reconsideration filed by the heirs of Dr. Valisno was denied.14

Respondent heirs filed a petition for review with the Court of Appeals, arguing that the Secretary of Agrarian Reform erred (1) in disallowing the award of one hectare to each of the seven Grandchildren-Awardees of Dr. Nicolas Valisno, as qualified children-awardees under the CARL; and (2) in not recognizing the redemption made by the four grandchildren of Dr. Nicolas Valisno over the 12-hectare riceland mortgaged to Renato and Angelito Banting.15

On March 26, 2002, the Court of Appeals reversed the Orders of the DAR Secretary, granted the award of one hectare each for the seven Grandchildren-Awardees, and affirmed the retention rights of the Redemptioner-Grandchildren over three hectares each, or a total of 12 hectares.16

Petitioners filed a partial motion for reconsideration, assailing the right of retention of the four Redemptioner-Grandchildren over the 12-hectare property, and praying that an amended decision be rendered placing the 12 hectares under the coverage of the CARP.17 This motion was denied on March 25, 2003.18

Hence, this appeal, on the sole assignment of error:

THE HONORABLE COURT OF APPEALS ERRED WHEN, IN EFFECT, IT RULED THAT THE REDEMPTIONERS (GRANDCHILDREN OF THE DECEASED NICOLAS VALISNO, SR.) WERE ENTITLED TO RETENTION RIGHTS AS LANDOWNERS UNDER THE AGRARIAN REFORM LAW DESPITE THE FACT THAT THE REDEMPTION WAS DONE BY THEIR PARENTS (CHILDREN OF THE DECEASED) ONLY IN THEIR NAME AND FOR THEIR BENEFIT.19

The appeal lacks merit.

The Court of Appeals found the following facts relevant: First, that the mortgages were constituted over a 12-hectare portion of Dr. Valisno’s estate in 1972. Second, that the titles to the property were transferred to the names of the mortgagees in 1972, viz., TCT No. NT-118447, covering a 6-hectare property in La Fuente, Sta. Rosa, Nueva Ecija, issued in the name of Angelito Banting; and TCT No. NT-118448, likewise covering a 6-hectare property in La Fuente, Sta. Rosa, Nueva Ecija, issued in the name of Renato Banting. Third, these properties were redeemed by the Redemptioner-Grandchildren on October 25, 1973, at the time of which redemption three of the four Redemptioner-Grandchildren were minors.

It is a well-settled rule that only questions of law may be reviewed by the Supreme Court in an appeal bycertiorari.20 Findings of fact by the Court of Appeals are final and conclusive and cannot be reviewed on appeal to the Supreme Court.21 The only time this Court will disregard the factual findings of the Court of Appeals (which are ordinarily accorded great respect) is when these are based on speculation, surmises or conjectures or when these are not based on substantial evidence.22

In the case at bar, no reason exists for us to disregard the findings of fact of the Court of Appeals. The factual findings are borne out by the record and are supported by substantial evidence.

Given these settled facts, the resolution of the sole issue in this case hinges on (1) the validity of the redemption in 1973, made when three of the Redemptioner-Grandchildren were minors; and (2) if the redemption was valid, the determination of the retention rights of the Redemptioner-Grandchildren, if any, under RA 6557.

The relevant laws governing the minors’ redemption in 1973 are the general Civil Code provisions on legal capacity to enter into contractual relations. Article 1327 of the Civil Code provides that minors are incapable of giving consent to a contract. Article 1390 provides that a contract where one of the parties is incapable of giving consent is voidable or annullable. Thus, the redemption made by the minors in 1973 was merely voidable or annullable, and was not void ab initio, as petitioners argue.

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Any action for the annulment of the contracts thus entered into by the minors would require that: (1) the plaintiff must have an interest in the contract; and (2) the action must be brought by the victim and not the party responsible for the defect.23 Thus, Article 1397 of the Civil Code provides in part that "[t]he action for the annulment of contracts may be instituted by all who are thereby obliged principally or subsidiarily. However, persons who are capable cannot allege the incapacity of those with whom they contracted." The action to annul the minors’ redemption in 1973, therefore, was one that could only have been initiated by the minors themselves, as the victims or the aggrieved parties in whom the law itself vests the right to file suit. This action was never initiated by the minors. We thus quote with approval the ratiocination of the Court of Appeals:

Respondents contend that the redemption made by the petitioners was simulated, calculated to avoid the effects of agrarian reform considering that at the time of redemption the latter were still minors and could not have resources, in their own right, to pay the price thereof.

We are not persuaded. While it is true that a transaction entered into by a party who is incapable of consent is voidable, however such transaction is valid until annulled. The redemption made by the four petitioners has never been annulled, thus, it is valid.24

The transfer of the titles to the two 6-hectare properties in 1972 removed the parcels of land from the entire Valisno estate. The evidence clearly demonstrates that Renato Banting and Angelito Banting became the registered owners of the property in 1972. These two separate properties were then transferred to the Redemptioner-Grandchildren in 1973. Regardless of the source of their funds, and regardless of their minority, they became the legal owners of the property in 1973.

Moreover, although Maria Cristina, Leonora and Gregorio were all minors in 1973, they were undoubtedly of legal age in 1994, when SMSP initiated the petition for coverage of the subject landholding under the CARL, and of course were likewise of legal age in 1997, when all the Valisno heirs filed their Consolidated Application for Retention and Award under RA 6657.

As owners in their own right of the questioned properties, Redemptioner-Grandchildren enjoyed the right of retention granted to all landowners. This right of retention is a constitutionally guaranteed right, which is subject to qualification by the legislature.25 It serves to mitigate the effects of compulsory land acquisition by balancing the rights of the landowner and the tenant and by implementing the doctrine that social justice was not meant to perpetrate an injustice against the landowner.26 A retained area, as its name denotes, is land which is not supposed to leave the landowner’s dominion, thus sparing the government from the inconvenience of taking land only to return it to the landowner afterwards, which would be a pointless process.

In the landmark case of Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform,27 we held that landowners who have not yet exercised their retention rights under PD 27 are entitled to the new retention rights under RA 6657.28 The retention rights of landowners are provided in Sec. 6 of RA 6657, which reads in relevant part:

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

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

This section defines the nature and incidents of a landowner’s right of retention. For as long as the area to be retained is compact or contiguous and it does not exceed the retention ceiling of five hectares, a landowner’s choice of the area to be retained must prevail.

Each of the four Redemptioner-Grandchildren is thus entitled to retain a parcel of land with a ceiling of five hectares, for a total of 20 hectares. The parcels of land in question total only 12 hectares, or only three hectares each, which is well within the statutory retention limits.

WHEREFORE, premises considered, the Decision of the Court of Appeals in CA-G.R. SP No. 59752 dated March 26, 2002, and Resolution of the Court of Appeals dated March 25, 2003, which upheld the retention rights of respondents Ma. Cristina Valisno, Benedicto V. Yujuico, Gregorio V. Yujuico and Leonora V. Yujuico, areAFFIRMED.

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