III. AGRICULTURAL LANDS.

COVERED LANDS:

Republic of the PhilippinesSUPREME COURT

Manila

FIRST DIVISION

G.R. No. 158228 March 23, 2004

DEPARTMENT OF AGRARIAN REFORM, as represented by its Secretary, ROBERTO M. PAGDANGANAN,petitioner, vs.DEPARTMENT OF EDUCATION, CULTURE AND SPORTS (DECS), respondent.

D E C I S I O N

YNARES-SANTIAGO, J.:

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

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.

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.

SO ORDERED.

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. 169514 March 30, 2007

CONFEDERATION OF SUGAR PRODUCERS ASSOCIATION, INC., (CONFED), NATIONAL FEDERATION OF SUGARCANE PLANTERS, INC. (NFSP), UNITED SUGAR PRODUCERS FEDERATION OF THE PHILS., INC. (UNIFED), PANAY FEDERATION OF SUGAR-CANE FARMERS, INC. (PANAYFED), FIRST FARMERS HOLDING CORPORATION, NATIONAL CONGRESS OF UNIONS IN THE SUGAR INDUSTRY OF THE PHILIPPINES (NACUSIP), LEAGUE OF MUNICIPALITIES OF THE PHILIPPINES – NEGROS OCCIDENTAL CHAPTER.Petitioners, vs.DEPARTMENT OF AGRARIAN REFORM (DAR), (Now also known as DEPARTMENT OF LAND REFORM), LAND BANK OF THE PHILIPPINES (LBP), LAND REGISTRATION AUTHORITY (LRA). Respondents.

D E C I S I O N

CALLEJO, SR., J.:

Before the Court is a petition for prohibition and mandamus under Rule 65 of the Rules of Court with prayer for the issuance of a writ of preliminary injunction or temporary restraining order filed by the

___________

* No part.

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 Parties

The petition is filed by the following: (1) the Confederation of Sugar Producers Association, Inc. (CONFED), a national federation of sugar planters’ associations and cooperatives from Luzon, Visayas and Mindanao, which is purportedly joined by its individual member organizations;1 (2) the National Federation of Sugarcane Planters, Inc. (NFSP), a duly organized federation of sugar planters’ associations and cooperatives from Luzon, Visayas and Mindanao, which is also purportedly joined by its individual member organizations;2 (3) the United Sugar Producers Federation of the Phil., Inc. (UNIFED), likewise a national federation of sugar planters’ associations and cooperatives from Luzon, Visayas and Mindanao, and is purportedly joined by its individual member organizations;3 (4) the Panay Federation of Sugarcane Farmers, Inc. (PANAYFED), a federation of sugarcane planters’ organizations and cooperatives from Panay Island, also purportedly joined by its individual member organizations;4 (5) the First Farmers Holding Co., a domestic corporation principally engaged in operating a sugar mill for the milling and manufacture or processing of sugarcane into sugar and the distribution of sugar and its by-products; (6) the National Congress of Unions in the Sugar Industry of the Philippines (NACUSIP), a labor organization; and (7) the League of Municipalities of the Philippines, Negros Occidental Chapter.

For the purpose of the present petition, CONFED, NFSP, UNIFED and PANAYFED are 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).

The Petitioners’ Case

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.

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 of the Latter and the provisions of the Land Registration Laws.6

It is the principal contention of the petitioners that, in the exercise by the State of the power of eminent domain, which in the case of RA 6657 is the acquisition of private lands for distribution to farmer-beneficiaries, expropriation proceedings, as prescribed in Rule 67 of the Rules of Court, must be strictly complied with. The petitioners rely on the case of Visayas Refining Company v. Camus and Paredes7 decided by the Court in 1919. In the said case, the Government of the Philippine Islands, through the Governor-General, instructed the Attorney-General to initiate condemnation proceedings for the purpose of expropriating a tract of land containing an area of 1,100,463 square meters to be used for military and aviation purposes. In compliance therewith, the Attorney-General filed a complaint with the Court of First Instance (CFI) and among the defendants impleaded was Visayan Refining Co. which owned a portion of the property intended to be expropriated. The CFI provisionally fixed the total value of the subject property at P600,000 and upon payment thereof as deposit, the CFI authorized that the Government be placed in possession thereof.

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 Court, speaking through Justice Street, upheld the right of the Governor-General to authorize the condemnation of the subject property for military and aviation purposes. It pointed to Sections 241 up to 2538 of the Code of Civil Procedure as the applicable provisions for the conduct of expropriation proceedings.

It likewise pointed to Sections 2 and 39 of Act No. 2826 as authorizing immediate possession when the Government is the plaintiff. Further, Article 349 of the Old Civil Code was also cited as it stated that:

ART. 349. No one may be deprived of his property unless it be by competent authority for some purpose of proven public utility and after payment of the proper compensation.

Unless this requisite has been complied with, it shall be the duty of the court to protect the owner of such property in its possession or to restore its possession to him, as the case may be.

The Court stated that "[t]aken together the laws mentioned supply a very complete scheme of judicial expropriation, deducing the authority from its ultimate source in sovereignty, providing in detail for the manner of its exercise, and making the right of the expropriator finally dependent upon the payment of the amount awarded by the court."10

The petitioners also quote the following disquisition in Visayan Refining Co. on expropriation vis-à-vis due process of law:

Nevertheless it should be noted that the whole problem of expropriation is resolvable in its ultimate analysis into a constitutional question of due process of law. The specific provisions that just compensation shall be made is merely in the nature of a superadded requirement to be taken into account by the Legislature in prescribing the method of expropriation. Even were there no organic or constitutional provision in force requiring compensation to be paid, the seizure of one’s property without payment, even though intended for a public use, would undoubtedly be held to be a taking without due process of law and a denial of the equal protection of the laws.

This point is not merely an academic one, as might superficially seem. On the contrary it has a practical bearing on the problem before us, which may be expressed by saying that, if the Legislature has prescribed a method of expropriation which provides for the payment of just compensation, and such method is so conceived and adapted as to fulfill the constitutional requisite of due process of law, any proceeding conducted in conformity with that method must be valid.11

Citing Visayan Refining Co. as well as other cases12 and statutes,13 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.

In this connection, they cite Section 1 of Rule 67, which they stress is entitled EXPROPRIATION, thus:

SEC. 1. The complaint. - The right of eminent domain shall be exercised by the filing of a verified complaint which shall state with certainty the right and purpose of expropriation, describe the real or personal property sought to be expropriated, and join as defendants all persons owning or claiming to own, or occupying, any part thereof or interest therein, showing, so far as practicable, the separate interest of each defendant. If the title to any property sought to be expropriated appears to be in the Republic of the Philippines, although occupied by private individuals, or if the title is otherwise obscure or doubtful so that the plaintiff cannot with accuracy or certainty specify who are the real owners, averment to that effect shall be made in the complaint.

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.

The petitioners add that Section 22, Article XVII (Transitory Provisions) of the Constitution states that "[a]t the earliest possible time, the Government shall expropriate idle or abandoned lands as may be defined by law, for distribution to the beneficiaries of the agrarian reform program." The use of the word "expropriate" in this provision allegedly underscores the necessity of expropriation proceedings pursuant to Rule 67 of the Rules of Court in the acquisition of private agricultural lands.

It is the petitioners’ view that the following provisions of RA 3844,14 as amended, remain effective:

SEC. 51. Powers and Functions. – It shall be the responsibility of the Department:

(1) to initiate and prosecute expropriation proceedings for the acquisition of private agricultural lands as defined in Section one hundred sixty-six of Chapter XI of this Code for the purpose of subdivision into economic family-size farm units and resale of said farm units to bona fide tenants, occupants and qualified farmers; Provided, That the powers herein granted shall apply only to private agricultural lands subject to the terms and conditions and order of priority hereinbelow specified.

x x x

SEC. 53. Compulsory Purchase of Agricultural Lands. – The Authority shall, upon petition in writing of at least one-third of the lessees and subject to the provisions of Chapter VII of this Code, institute and prosecute expropriation proceedings for the acquisition of private agricultural lands and home lots enumerated under Section fifty-one. In the event a landowner agrees to sell his property under the terms specified in this Chapter and the National Land Reform Council finds it suitable and necessary to acquire such property, a joint motion embodying the agreement, including the valuation of the property, shall be submitted by the Land Authority and the landowner to the court for approval; Provided, That in such case, any person qualified to be a beneficiary of such expropriation or purchase may object to the valuation as excessive, in which case the Court shall determine the just compensation in accordance with Section fifty-six of this Code.

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 specifically refer to Section 16 of RA 6657, which reads:

SEC. 16. Procedure for Acquisition of Private Lands. – For purposes of acquisition of private lands, the following procedures shall be followed:

(a) After having identified the land, the landowners and the beneficiaries, the DAR shall send its notice to acquire the land to the owners thereof, by personal delivery or registered mail, and post the same in a conspicuous place in the municipal building and barangay hall of the place where the property is located. Said notice shall contain the offer of the DAR to pay a corresponding value in accordance with the valuation set forth in Sections 17, 18 and other pertinent provisions hereof.

(b) Within thirty (30) days from the date of receipt of written notice by personal delivery or registered mail, the landowners, his administrator or representative shall inform the DAR of his acceptance or rejection of the former.

(c) If the landowner accepts the offer of the DAR, the LBP shall pay the landowner the purchase price of the land within thirty (30) days after he executes and delivers a deed of transfer in favor of the Government and surrenders the Certificate of Title and other muniments of title.

(d) In case of rejection or failure to reply, 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 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.

(e) 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.

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

They clarify that while they concede the validity of paragraphs (a), (b) and (c), they vigorously assail the validity of paragraphs (d), (e) and (f) of the above-quoted provision. Under the assailed paragraphs, a landowner is allegedly deprived of his right to question or challenge the legality or necessity of the taking of his land by the DAR. The "public purpose and necessity" of the taking is already assumed without the predicate of a prior hearing where the landowner is given an opportunity to be heard. He is allegedly only allowed in paragraph (d) to question or reject the compensation offered by the DAR. This procedure allegedly violates the rights of the landowners under Sections 1 and 9 of Article III (Bill of Rights) of the Constitution, to wit:

SEC. 1. No person shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied the equal protection of the laws.

x x x

SEC. 9. Private property shall not be taken for public use without just compensation.

Paragraph (e) is assailed by the petitioners as it authorizes the DAR, by allegedly merely causing the deposit with the Land Bank of the compensation, to immediately take possession of the property and to direct the Register of Deeds to cancel the certificate of title of the landowner without notice to and consent of the latter. The petitioners contend that, in contrast, under the Civil Code, if the creditor or obligee refuses to accept the tender of payment, it is the duty of the debtor or obligor to make consignation of the thing or amount due. Under the Civil Code, there is no effective payment without valid tender of payment and consignation in court.15 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.

Paragraph (f) is characterized by the petitioners as meaningless and useless to the landowner. It allegedly compels him to file a case, and in the process incur costs therefor, for the final determination of just compensation when, in the meantime, he has already been deprived of possession of his property and his certificate of title cancelled. The petitioners cite EPZA v. Dulay16 where the Court ruled that:

We, therefore, hold that P.D. 1533 which eliminates the court’s discretion to appoint commissioners pursuant to Rule 67 of the Rules of Court, is unconstitutional and void. To hold otherwise would be to undermine the very purpose why this Court exists in the first place.17

Relying on the above pronouncement, the petitioners submit that paragraphs (d), (e) and (f) of Section 16 of RA 6657, as they similarly eliminate the appointment by the court of commissioners to appraise the valuation of the land, are unconstitutional, null and void.

The petitioners next assail the Court’s Decision in Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform18 which affirmed the constitutionality of RA 6657. They describe the Decision as a "riddle wrapped in an enigma." They refer to pronouncements made therein that are allegedly inconsistent with its conclusion, i.e., affirming the validity of RA 6657, including paragraphs (d), (e) and (f) of Section 16. For example, while the Decision, citing EPZA, pronounced that "[t]o be sure, the determination of just compensation is a function addressed to the courts of justice and may not be usurped by any other branch or official of the government"19and that "the determination made by the DAR is only preliminary unless accepted by all parties concerned,"20these pronouncements are allegedly irreconcilable with paragraphs (d) and (e) which allow the DAR, through summary administrative proceeding, "to take immediate possession of the land" and cause "the cancellation of the certificate of title of the landowner."

Further, the petitioners maintain that paragraphs (d) and (e) contemplate a transfer of possession and ownership even before full payment of compensation. They thus wonder how these paragraphs were allowed to survive and remain despite the avowals of the Court in the Decision that "[t]he recognized rule, indeed, is that title to the property expropriated shall pass from the owner to the expropriator only upon full payment of the just compensation"21 and its dispositive portion that "2. Title to all expropriated properties shall be transferred to the State only upon full payment of compensation to their respective owners."22

The petitioners opine that even as the Decision affirmed the validity of RA 6657, the pronouncements made in the body, quoted earlier, actually support their argument that paragraphs (d), (e) and (f) of Section 16 are invalid as they dispense with the expropriation proceedings under Rule 67 of the Rules of Court in the acquisition of private agricultural lands. The petitioners assert that the only procedure for the exercise by the State of eminent domain in the implementation of agrarian reform is through expropriation under Rule 67 of the Rules of Court.

The DAR is also being accused by the petitioners of usurping the powers and functions of the Presidential Agrarian Reform Council (PARC),23 which is allegedly the body charged under RA 6657 with the task of promulgating the rules for the schedule of acquisition and redistribution of agricultural lands.24 No law has allegedly been passed transferring the powers of the PARC to DAR; consequently, the various administrative orders that it has issued to implement RA 6657 are ultra vires.

The petitioners also assail as undue and unlawful delegation to the Municipal Agrarian Reform Officers (MAROs) the authority to issue notices of coverage and compulsory acquisition. Section 16 (a), quoted earlier, provides that "[a]fter having identified the land, the landowners and the beneficiaries, the DAR shall send its notice to acquire the land to the owners thereof x x x." According to the petitioners, this function has been delegated to the DAR Secretary and it can and should only be exercised by the said official. The DAR Secretary cannot allegedly delegate the same to a subordinate official or employee. Consequently, the delegation by the DAR Secretary to the MAROs of the authority and discretion to send the notices of coverage and compulsory acquisition involving sugar lands to be brought under RA 6657 allegedly constituted grave abuse of discretion amounting to lack or excess of jurisdiction.

Citing Section 4, Article XIII (Social Justice and Human Rights) which states in part that "[t]he 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 x x x," the petitioners posit that only the regular farmworkers or farmers are entitled to own the land they till. Further, this entitlement or right may be waived or declined by the

regular farmworkers or farmers. As a corollary, they must first express their willingness or conformity to own the lands they are tilling before the DAR may allegedly send the notices of coverage and acquisition.

Allegedly in violation thereof, notices of coverage and acquisition are being sent out by the DAR "indiscriminately" without first identifying the land, the landowners and the beneficiaries. The petitioners emphasize that, with respect to the regular farmworkers in sugar lands, a majority of the regular farmworkers must first agree to exercise their right to own the land they till. In other words, the regular farmworkers in sugar lands can exercise their right to own the land only collectively, not individually. If they decide against the exercise of the said right, the DAR cannot choose to replace them with non-regular farmworkers or non-tillers thereon because they would not qualify as beneficiaries.

What is actually implemented in the sugar lands of the members of petitioners-federations is that the DAR, allegedly in collusion with some non-governmental organizations (NGOs) and farmer organizations, ejects and replaces the regular farmworkers with non-tillers, non-regular farmworkers or outsiders who are falsely designated as "beneficiaries." These "beneficiaries" are then installed on the sugar lands with the assistance of members of the Armed Forces of the Philippines (AFP) or the Philippine National Police (PNP). The petitioners claim that these incidents have resulted in heightened tension and anxiety and even violent confrontations in the sugar lands in the Visayas.

By these alleged acts, the petitioners charge the DAR with "deliberate and unmitigated distortion" of Section 2225of RA 6657. In contravention of the letter of the said provision, the DAR has allegedly included landless residents who are non-tillers and who are outsiders as beneficiaries in the distribution of private agricultural lands.

As an alternative mode of agrarian reform, the petitioners aver that the system of Land Administration, as recognized in RA 3844, should continue to be allowed particularly in sugar lands. Labor Administration,26 they explain, is a farming system that has been adopted and followed by sugar planters in the operation of their farms. Under this system, the planters employ or hire farmworkers who supply the labor required for the entire farm operations. Aside from their salaries and wages, which are covered by the minimum wage law, the farmworkers also receive other benefits from the planters such as housing, medical services and education for their children.

The petitioners contend that RA 6657 expressly recognizes Land Administration as an alternative mode of agrarian reform as it defines "agrarian reform" in this wise:

SEC. 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 farmer and regular farmworkers 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.

Another indication that Land Administration is continued to be recognized in the operation of farms, according to the petitioners, is the fact that after RA 6657, Congress amended the minimum wage law several times to provide for the increase of the minimum wage not only for non-agricultural workers but also for agricultural laborers. Also, in 1991, Congress enacted RA 698227 which, according to the petitioners, granted wage and other benefits to workers in the sugar industry. The said law allegedly recognized that the work in the sugar industry is seasonal. Implicit in these policies of minimum wage increases and amelioration of benefits for sugar farmworkers is allegedly the recognition of the system of Land Administration as a legitimate mode of agrarian reform.

Despite this recognition, the DAR has allegedly outlawed Land Administration as it is bent on acquiring and distributing thousands of hectares of private agricultural lands. In so doing, the DAR is allegedly not bothering to

find out whether the alternative mode of agrarian reform, i.e., Land Administration, is already in place and whether the regular farmworkers entitled to own the land want to exercise their right.

The petitioners explain that there are certain crops, and sugar is one of them, that are more economically and efficiently produced by organized, mechanized and plantation-type agriculture than by small, "parcelized" and owner-cultivated farms. This is allegedly especially true in the sugar producing regions in the Visayas where planting and harvesting of sugarcane have to be synchronized with the milling season of the sugar mill in a particular district. The peculiar nature of the sugar industry is allegedly the reason why RA 3844, RA 6982 and other laws have recognized Labor Administration as an alternative mode of agrarian reform.

The petitioners stress that the mandate of the Constitution is not only to give the landless farmers and regular farmworkers the right to own the land they till but also the right to receive a just share of the fruits of the land. If these farmers then choose not to exercise their right to own the land they till, then it allegedly behooves the DAR to see to it that the other laws, such as the minimum wage law and RA 6982, are implemented to afford the farmworkers a "just share of the fruits of the land." Instead, the DAR, by its stance of singularly implementing RA 6657, is allegedly violating the rights of the sugar farmworkers guaranteed by other applicable laws.28 Specifically, the DAR is ousting regular farmworkers and installing outsiders to take over the lands.

The DAR is further allegedly committing grave abuse of discretion by assuming jurisdiction, through the Department of Agrarian Reform Adjudication Board (DARAB), over cases and controversies which, by virtue of Batas Pambansa Blg. (BP) 129, known as "The Judiciary Reorganization Act," are properly cognizable by the Regional Trial Courts (RTCs). The petitioners note that prior to BP 129, "cases involving expropriation of all kinds of land in furtherance of the agrarian reform program" and "expropriation proceedings for public purpose of all kinds of tenanted agricultural lands x x x"29 were exclusively within the jurisdiction of the Court of Agrarian Relations (CAR). With the enactment of BP 129, the CAR was abolished and cases under its jurisdiction were transferred to the exclusive and original jurisdiction of RTCs. The petitioners advance the view that RA 6657 did not repeal BP 129 such that the RTCs are not divested of their exclusive and original jurisdiction over cases formerly under the jurisdiction of the CAR. This is so, according to the petitioners, because the jurisdiction of the CAR involved the exercise of judicial power that could not be properly transferred to an administrative body like the DAR. The latter’s jurisdiction is allegedly limited only to matters involving the administrative implementation of agrarian reform laws, e.g., disputes and controversies "relating to tenurial arrangements."

With respect to the Land Bank, the petitioners allege that in the light of the Court’s pronouncement in Association of Small Landowners that "the determination made by the DAR is only preliminary unless accepted by all parties concerned, [o]therwise, the courts of justice will still have the right to review with finality the said determination in the exercise of what is admittedly a judicial function," the Land Bank cannot effect the payment of compensation as determined by the DAR which is considered as preliminary. The Land Bank must allegedly wait until such compensation is determined with finality by the courts.

The Land Registration Authority is similarly assailed as committing grave abuse of discretion since it, through the various Registers of Deeds in the country and particularly in the sugar producing regions in the Visayas, has been allegedly summarily canceling certificates of title merely upon the directive or request of the DAR and without the knowledge and consent of the registered owners. In violation of the pertinent provisions30 of the Land Registration Act (Act No. 496), the Registers of Deeds are allegedly canceling certificates of title of landowners without asking them to surrender their owners’ duplicate certificates of titles.

The petitioners thus pray, inter alia, for the issuance of a writ to prohibit the DAR, the Land Bank and the Land Registration Authority from subjecting the petitioners’ sugarcane farms 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 petitioners likewise pray that paragraphs (d), (e) and (f) of Section 16 of RA 6657 be declared unconstitutional.

The Respondents’ Counter-Arguments

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. Further, some of the grounds relied upon by the petitioners allege matters that require factual determination. For example, the allegation that the DAR is subjecting the sugar lands to the coverage of RA 6657 without first ascertaining whether there are regular farmworkers therein and whether they are interested to own, directly or collectively, the land they till, allegedly requires factual determination. 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.

Refuting the petitioners, the Land Bank asserts that taking of private property for agrarian reform purposes can be effected even without full payment of just compensation. It cites the following commentary of Fr. Bernas:

x x x x

IS SUCH RIGHT OF IMMEDIATE ENTRY CONSTITUTIONAL? x x x Reviewing conflicting American authorities, the Court said that "ACCORDING TO THE WEIGHT OF AUTHORITY, IF THE CONSTITUTION OR STATUTES DO NOT EXPRESSLY REQUIRE IT, ACTUAL PAYMENT OR TENDER BEFORE TAKING IS UNNECESSARY, and it will be sufficient if a certain and adequate remedy is provided by which the owner can obtain compensation without any unreasonable delay." THE COURT OPTED FOR THIS MORE LIBERAL VIEW and found that the statute in question with its provision for deposit of the money with the court satisfied constitutional requirements.31

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. It cites Fr. Bernas anew:

x x x

ANOTHER MATTER TAKEN UP BY THE COMMISSION WAS THE PROPOSAL TO REQUIRE ‘PRIOR PAYMENT OF JUST COMPENSATION’ IN LAND REFORM EXPROPRIATIONS. Commissioner Regalado proposed the amendment as a measure to protect the interest of landowners. Regalado’s explanation, however, revealed that ALL HE WANTED WAS WHAT ALREADY OBTAINS IN EXPROPRIATION LAWS WHICH REQUIRES A COURT DEPOSIT PRIOR TO ENTRY INTO THE CONDEMNED PROPERTY. BUT REGALADO WAS SATISFIED WHEN THIS MEANING WAS ACCEPTED BY THE COMMISSION and he did not insist on an explicit constitutional provision.32

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.

The Land Bank thus denies committing any grave abuse of discretion in "making or causing the payment of the initial amount of valuation regarding private lands acquired pursuant to RA 6657 notwithstanding the lack of finality of the decision adjudging the amount of just compensation of subject properties."33

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.

In this connection, the DAR informs the Court that the concerns of the petitioners are appropriately within the domain of the Task Force Sugarlandia, created pursuant to Memorandum Order No. 199 dated December 5, 2005 issued by President Gloria Macapagal-Arroyo, which reads:

Section 2. Powers and Functions. Task Force Sugarlandia shall exercise the following powers and functions:

a. Conduct and complete a study identifying and addressing specific problems in the implementation of the Comprehensive Agrarian Reform Program as provided under Republic Act 6657 directly affecting the development of the sugar industry and conduct consultations in areas to be identified by the Task Force;

b. Submit recommendations to the President on the formulation of policies, plans, programs and projects relative to the development of the sugar industry and implementation of the ethanol program;

c. Recommend modifications/amendments to existing laws, rules, regulations and procedures to remove impediments in the immediate, effective and efficient implementation of the programs and activities relative to the Comprehensive Agrarian Reform Program under Republic Act 6657;

d. Enlist the assistance of any branch, department, bureau, office, agency or instrumentality of the Government, including government-owned and controlled corporations, to carry out the provisions of this Memorandum Order;

e. Perform such other functions as may be directed by the President.

Anent the alleged unconstitutionality of paragraphs (d), (e) and (f) of Section 16 of RA 6657, the DAR invokes Association of Small Landowners which affirmed the constitutionality of the said law.

For its part, the Land Registration Authority observes that it was impleaded as a nominal party; nonetheless, it adopts the Comment of the DAR as its own.

The Court’s Rulings

The petition lacks merit.

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.

Objection is raised, however, to the manner of fixing the just compensation, which it is claimed is entrusted to the administrative authorities in violation of judicial prerogatives. Specific reference is made to Section 16(d), which provides that in case of the rejection or disregard by the owner of the offer of the government to buy his land -

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.

To be sure, the determination of just compensation is a function addressed to the courts of justice and may not be usurped by any other branch or official of the government. EPZA v. Dulay resolved a challenge to several decrees promulgated by President Marcos providing that the just compensation for property under expropriation should be either the assessment of the property by the government or the sworn valuation thereof by the owner, whichever was lower. In declaring these decrees unconstitutional, the Court held through Mr. Justice Hugo E. Gutierrez, Jr.:

The method of ascertaining just compensation under the aforecited decrees constitutes impermissible encroachment on judicial prerogatives. It tends to render this Court inutile in a matter which under this Constitution is reserved to it for final determination.

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

x x x

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.

x x x

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

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

The foregoing disquisition is binding and applicable to the present case following the salutary doctrine of stare decisis et non quieta movere which means "to adhere to precedents, and not to unsettle things which are established."37 Under the doctrine, when the Supreme Court has once laid down a principle of law as applicable to a certain state of facts, it will adhere to that principle, and apply it to all future cases, where facts are substantially the same; regardless of whether the parties and property are the same.38 The doctrine of stare decisis is based upon the legal principle or rule involved and not upon the judgment which results therefrom. In this particular sense stare decisis differs from res judicata which is based upon the judgment.39

The doctrine of stare decisis is one of policy grounded on the necessity for securing certainty and stability of judicial decisions, thus:

Time and again, the Court has held that it is a very desirable and necessary judicial practice that when a court has laid down a principle of law as applicable to a certain state of facts, it will adhere to that principle and apply it to all future cases in which the facts are substantially the same. Stare decisis et non quieta movere. Stand by the decisions and disturb not what is settled. Stare decisis simply means that for the sake of certainty, a conclusion reached in one case should be applied to those that follow if the facts are substantially the same, even though the parties may be different. It proceeds from the first principle of justice that, absent any powerful countervailing considerations, like cases ought to be decided alike. Thus, where the same questions relating to the same event have been put forward by the parties similarly situated as in a previous case litigated and decided by a competent court, the rule of stare decisis is a bar to any attempt to relitigate the same.40

A careful reading of the petition shows that while it purports to be one for prohibition and mandamus, it practically seeks a reconsideration, albeit partial, of the Decision in Association of Small Landowners. It is noted that in G.R. 79310, one of the consolidated cases therein, the petitioners were landowners and sugar planters in Victorias, Negros Occidental and Planters’ Committee, Inc., an organization composed of 1,400 planter-members. Also allowed to intervene as petitioner therein was the National Federation of Sugarcane Planters, presumably the same organization as one of the petitioners in this case, which then claimed to represent its members of at least 20,000 individual sugar planters all over the country. The Decision in Association of Small Landowners is thus final and conclusive on these parties not only on the ground of stare decisis, but res judicata as well.

In any case, despite its lengthy discussion, the petition has failed to present any cogent argument for the Court to re-examine Association of Small Landowners. As correctly observed by the Solicitor General, the petition does not allege that the farm lands of any of the petitioners have actually been subjected to compulsory acquisition or, at the least, that the DAR, following Section 16 of RA 6657, has actually given any of the petitioners notice that it is acquiring their respective properties for the purpose of agrarian reform. In other words, the allegations of the petition have failed to present an actual case or controversy, or that it is ripe for adjudication, which would warrant the Court’s re-examination of its rulings in Association of Small Landowners, including those pertaining to the validity of Section 16, including paragraphs (d), (e) and (f), of RA 6657.

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 procedure is as follows:

"II. OPERATING PROCEDURE

A. The Municipal Agrarian Reform Officer, with the assistance of the pertinent Barangay Agrarian Reform Committee (BARC), shall:

1. Update the master list of all agricultural lands covered under the CARP in his area of responsibility. The master list shall include such information as required under the attached CARP Master List Form which shall include the name of the landowner, landholding area, TCT/OCT number, and tax declaration number.

2. Prepare a Compulsory Acquisition Case Folder (CACF) for each title (OCT/TCT) or landholding covered under Phase I and II of the CARP except those for which the landowners have already filed applications to avail of other modes of land acquisition. A case folder shall contain the following duly accomplished forms:

a) CARP CA Form 1—MARO Investigation Report

b) CARP CA Form 2-- Summary Investigation Report of Findings and Evaluation

c) CARP CA Form 3—Applicant’s Information Sheet

d) CARP CA Form 4—Beneficiaries Undertaking

e) CARP CA Form 5—Transmittal Report to the PARO

The MARO/ BARC shall certify that all information contained in the above-mentioned forms have been examined and verified by him and that the same are true and correct.

3. Send a Notice of Coverage and a letter of invitation to a conference/ meeting to the landowner covered by the Compulsory Case Acquisition Folder. Invitations to the said conference/ meeting shall also be sent to the prospective farmer-beneficiaries, the BARC representative(s), the Land Bank of the Philippines (LBP) representative and other interested parties to discuss the inputs to the valuation of the property. He shall discuss the MARO/ BARC investigation report and solicit the views, objection, agreements or suggestions of the participants thereon. The landowner shall also be asked to indicate his retention area. The minutes of the meeting shall be signed by all participants in the conference and shall form an integral part of the CACF.

4. Submit all completed case folders to the Provincial Agrarian Reform Officer (PARO).

B. The PARO shall:

1. Ensure that the individual case folders are forwarded to him by his MAROs.

2. Immediately upon receipt of a case folder, compute the valuation of the land in accordance with A.O. No. 6, Series of 1988. The valuation worksheet and the related CACF valuation forms shall be duly certified correct by the PARO and all the personnel who participated in the accomplishment of these forms.

3. In all cases, the PARO may validate the report of the MARO through ocular inspection and verification of the property. This ocular inspection and verification shall be mandatory when the computed value exceeds 500,000 per estate.

4. Upon determination of the valuation, forward the case folder, together with the duly accomplished valuation forms and his recommendations, to the Central Office. The LBP representative and the MARO concerned shall be furnished a copy each of his report.

C. DAR Central Office, specifically through the Bureau of Land Acquisition and Distribution (BLAD), shall:

1. Within three days from receipt of the case folder from the PARO, review, evaluate and determine the final land valuation of the property covered by the case folder. A summary review and evaluation report shall be prepared and duly certified by the BLAD Director and the personnel directly participating in the review and final valuation.

2. Prepare, for the signature of the Secretary or her duly authorized representative, a Notice of Acquisition (CARP CA Form 8) for the subject property. Serve the Notice to the landowner personally or through registered mail within three days from its approval. The Notice shall include, among others, the area subject of compulsory acquisition, and the amount of just compensation offered by DAR.

3. Should the landowner accept the DAR’s offered value, the BLAD shall prepare and submit to the Secretary for approval the Order of Acquisition. However, in case of rejection or non-reply, the DAR Adjudication Board (DARAB) shall conduct a summary administrative hearing to determine just compensation, in accordance with the procedures provided under Administrative Order No. 13, Series of 1989. Immediately upon receipt of the DARAB’s decision on just compensation, the BLAD shall prepare and submit to the Secretary for approval the required Order of Acquisition.

4. Upon the landowner’s receipt of payment, in case of acceptance, or upon deposit of payment in the designated bank, in case of rejection or non-response, the Secretary shall immediately direct the pertinent Register of Deeds to issue the corresponding Transfer Certificate of Title (TCT) in the name of the Republic of the Philippines. Once the property is transferred, the DAR, through the PARO, shall take possession of the land for redistribution to qualified beneficiaries."

Administrative Order No. 12, Series of 1989 requires that the Municipal Agrarian Reform Officer (MARO) keep an updated master list of all agricultural lands under the CARP in his area of responsibility containing all the required information. The MARO prepares a Compulsory Acquisition Case Folder (CACF) for each title covered by CARP. The MARO then sends the landowner a "Notice of Coverage" and a "letter of invitation" to a "conference/ meeting" over the land covered by the CACF. He also sends invitations to the prospective farmer-beneficiaries, the representatives of the Barangay Agrarian Reform Committee (BARC), the Land Bank of the Philippines (LBP) and other interested parties to discuss the inputs to the valuation of the property and solicit views, suggestions, objections or agreements of the parties. At the meeting, the landowner is asked to indicate his retention area.

The MARO shall make a report of the case to the Provincial Agrarian Reform Officer (PARO) who shall complete the valuation of the land. Ocular inspection and verification of the property by the PARO shall be mandatory when the computed value of the estate exceeds P500,000.00. Upon determination of the valuation, the PARO shall forward all papers together with his recommendation to the Central Office of the DAR. The DAR Central Office, specifically, the Bureau of Land Acquisition and Distribution (BLAD), shall review, evaluate and determine the final land valuation of the property. The BLAD shall prepare, on the signature of the Secretary or his duly authorized representative, a Notice of Acquisition for the subject property. From this point, the provisions of Section 16 of R.A. 6657 then apply.

For a valid implementation of the CAR Program, two notices are required: (1) the Notice of Coverage and letter of invitation to a preliminary conference sent to the landowner, the representatives of the BARC, LBP, farmer beneficiaries and other interested parties pursuant to DAR A. O. No. 12, Series of 1989; and (2) the Notice of Acquisition sent to the landowner under Section 16 of the CARL.

The importance of the first notice, i.e., the Notice of Coverage and the letter of invitation to the conference, and its actual conduct cannot be understated. They are steps designed to comply with the requirements of administrative due process. The implementation of the CARL is an exercise of the State’s police power and the power of eminent domain. To the extent that the CARL prescribes retention limits to the landowners, there is an exercise of police power for the regulation of private property in accordance with the Constitution. But where, to carry out such regulation, the owners are deprived of lands they own in excess of the maximum area allowed, there is also a taking under the power of eminent domain. The taking contemplated is not a mere limitation of the use of the land. What is required is the surrender of the title to and physical possession of the said excess and all beneficial rights accruing to the owner in favor of the farmer beneficiary. The Bill of Rights provides that "[n]o person shall be deprived of life, liberty or property without due process of law." The CARL was not intended to take away property without due process of law. The exercise of the power of eminent domain requires that due process be observed in the taking of private property.

DAR A. O. No. 12, Series of 1989, from whence the Notice of Coverage first sprung, was amended in 1990 by DAR A.O. No. 9, Series of 1990 and in 1993 by DAR A.O. No. 1, Series of 1993. The Notice of Coverage and letter of invitation to the conference meeting were expanded and amplified in said amendments.

DAR A. O. No. 9, Series of 1990 entitled "Revised Rules Governing the Acquisition of Agricultural Lands Subject of Voluntary Offer to Sell and Compulsory Acquisition Pursuant to R. A. 6657," requires that:

"B. MARO

1. Receives the duly accomplished CARP Form Nos. 1 & 1.1 including supporting documents.

2. Gathers basic ownership documents listed under 1.a or 1.b above and prepares corresponding VOCF/ CACF by landowner/ landholding.

3. Notifies/ invites the landowner and representatives of the LBP, DENR, BARC and prospective beneficiaries of the schedule of ocular inspection of the property at least one week in advance.

4. MARO/ LAND BANK FIELD OFFICE/ BARC

a) Identify the land and landowner, and determine the suitability for agriculture and productivity of the land and jointly prepare Field Investigation Report (CARP Form No. 2), including the Land Use Map of the property.

b) Interview applicants and assist them in the preparation of the Application For Potential CARP Beneficiary (CARP Form No. 3).

c) Screen prospective farmer-beneficiaries and for those found qualified, cause the signing of the respective Application to Purchase and Farmer’s Undertaking (CARP Form No. 4).

d) Complete the Field Investigation Report based on the result of the ocular inspection/ investigation of the property and documents submitted. See to it that Field Investigation Report is duly accomplished and signed by all concerned.

5. MARO

a) Assists the DENR Survey Party in the conduct of a boundary/ subdivision survey delineating areas covered by OLT, retention, subject of VOS, CA (by phases, if possible), infrastructures, etc., whichever is applicable.

b) Sends Notice of Coverage (CARP Form No. 5) to landowner concerned or his duly authorized representative inviting him for a conference.

c) Sends Invitation Letter (CARP Form No. 6) for a conference/ public hearing to prospective farmer-beneficiaries, landowner, representatives of BARC, LBP, DENR, DA, NGO’s, farmers’ organizations and other interested parties to discuss the following matters:

Result of Field Investigation

Inputs to valuation

Issues raised

Comments/ recommendations by all parties concerned.

d) Prepares Summary of Minutes of the conference/ public hearing to be guided by CARP Form No. 7.

e) Forwards the completed VOCF/CACF to the Provincial Agrarian Reform Office (PARO) using CARP Form No. 8 (Transmittal Memo to PARO).

x x x."

DAR A. O. No. 9, Series of 1990 lays down the rules on both Voluntary Offer to Sell (VOS) and Compulsory Acquisition (CA) transactions involving lands enumerated under Section 7 of the CARL. In both VOS and CA transactions, the MARO prepares the Voluntary Offer to Sell Case Folder (VOCF) and the Compulsory Acquisition Case Folder (CACF), as the case may be, over a particular landholding. The MARO notifies the landowner as well as representatives of the LBP, BARC and prospective beneficiaries of the date of the ocular inspection of the property at least one week before the scheduled date and invites them to attend the same. The MARO, LBP or BARC conducts the ocular inspection and investigation by identifying the land and landowner, determining the suitability of the land for agriculture and productivity, interviewing and screening prospective farmer beneficiaries. Based on its investigation, the MARO, LBP or BARC prepares the Field Investigation Report which shall be signed by all parties concerned. In addition to the field investigation, a boundary or subdivision survey of the land may also be conducted by a Survey Party of the Department of Environment and Natural Resources (DENR) to be assisted by the MARO. This survey shall delineate the areas covered by Operation Land Transfer (OLT), areas retained by the landowner, areas with infrastructure, and the areas subject to VOS and CA. After the survey and field investigation, the MARO sends a "Notice of Coverage" to the landowner or his duly authorized representative inviting him to a conference or public hearing with the farmer beneficiaries, representatives of the BARC, LBP, DENR, Department of Agriculture (DA), non-government organizations, farmer’s organizations and other interested parties. At the public hearing, the parties shall discuss the results of the field investigation, issues that may be raised in relation thereto, inputs to the valuation of the subject landholding, and other comments and recommendations by all parties concerned. The Minutes of the conference/ public hearing shall form part of the VOCF or CACF which files shall be forwarded by the MARO to the PARO. The PARO reviews, evaluates and validates the Field Investigation Report and other documents in the VOCF/ CACF. He then forwards the records to the RARO for another review.

DAR A. O. No. 9, Series of 1990 was amended by DAR A. O. No. 1, Series of 1993. DAR A. O. No. 1, Series of 1993 provided, among others, that:

"IV. OPERATING PROCEDURES:

"Steps Responsible Agency/Unit

Activity Forms/Document(Requirements)

A. Identification and Documentationx x x

5 DARMO Issues Notice of Coverage to LO CARP by personal delivery with proof of service, or by registered mail with return card, informing him that his property is now under CARP coverage and for LO to select his retention area, if he desires to avail of his right of retention; and at the same time invites him to join the field investigation to be conducted on his property which should be scheduled at least two weeks in advance of said notice.

Form No. 2

A copy of said Notice shall be posted for at least one week on bulletin board of the municipal and barangay halls where the property is located. LGU office concerned notifies DAR about compliance with posting requirement thru return indorsement on CARP Form No. 17. Notify prospective ARBs of the schedule of the field 6 DARMO Sends notice to the LBP, BARC, Form No.3 CARP DENR representatives and prospective ARBs of the schedule of the field investigation to be conducted on the subject property.

CARP Form No. 17

7 DARMOLBPDENRLocal Office

With the participation of LO, BARC, and DENR prospective ARBs, conducts the investigation on subject Office property to identify the landholding, deter- mines its suitability and product- vity; and jointly prepares the Field Investigation Report (FIR) and Land Use Map. However, the field investigation shall proceed even if the LO, the representatives of the DENR and prospective ARBs are not available provided, they were given

CARP BARC No. 4 Land Use Map

representatives of the LBP Form

due notice of the time and date of the investigation to be conducted. Similarly, if the LBP representative is not available or court or could not come on the scheduled date, the field investigation shall also be conducted, after which the duly accomplished Part I of CARP Form No. 4 shall be forwarded to the LBP representative for validation. If he agrees to the ocular inspection report of DAR, he signs the FIR (Part I) and accomplishes Part II thereof.

In the event that there is a difference or variance between the findings of the DAR and the LBP as to the propriety of covering the land under CARP, whether in whole or in part, on the issue of suitability to agriculture, degree of development or slope, and on issues affecting idle lands, the conflict shall be resolved by a composite team of DAR, LBP, DENR and DA which shall jointly conduct further investigation thereon. The team shall submit its report of findings which shall be binding to both DAR and LBP, pursuant to Joint Memorandum Circular of the DAR, LBP, DENR and DA dated 27 January 1992. 8 DARMO Screens prospective ARBS and CARP BARC causes the signing of Application Form of Purchase and Farmers' under- No. 5 taking (APFU).

9 DARMO Furnishes a copy of the duly accomplished FIR to the landowner by personal delivery with proof of service or regis- tered mail with return card and posts a copy thereof for at least one week on the bulletin board of the municipal and barangay halls where the property is located.

CARP Form No. 4

LGU office concerned notifies notifies DAR about posting requirement thru return endorsement on CARP Form No. 17.

CARP Form No. 17

B. Land Survey

10

DARMOand/orLocal Office

Conducts perimeter or segregation survey covered by OLT , "uncarpable areas such as 18% slope and above, unproductive/unsuit- able to agriculture, retention, infrastructure. In case of segregation or subdivision survey, the plan shall be approved by DENR-LMS.

Perimeter or Survey Plan

DENR delineating areas Segregation

C. Review and Completion of Documents.

11

DARMO Forwards VOCF/CACFto DARPO. CARP Form No 6

x x x."

DAR A. O. No. 1, Series of 1993, modified the identification process and increased the number of government agencies involved in the identification and delineation of the land subject to acquisition. This time, the Notice of Coverage is sent to the landowner before the conduct of the field investigation and the sending must comply with specific requirements. Representatives of the DAR Municipal Office (DARMO) must send the Notice of Coverage to the landowner by "personal delivery with proof of service, or by registered mail with return card," informing him that his property is under CARP coverage and that if he desires to avail of his right of retention, he may choose which area he shall retain. The Notice of Coverage shall also invite the landowner to attend the field investigation to be scheduled at least two weeks from notice. The field investigation is for the purpose of identifying the landholding and determining its suitability for agriculture and its productivity. A copy of the Notice of Coverage shall be posted for at least one week on the bulletin board of the municipal and barangay halls where the property is located. The date of the field investigation shall also be sent by the DAR Municipal Office to representatives of the LBP, BARC, DENR and prospective farmer beneficiaries. The field investigation shall be conducted on the date set with the participation of the landowner and the various representatives. If the landowner and other representatives are absent, the field investigation shall proceed, provided they were duly notified thereof. Should there be a variance between the findings of the DAR and the LBP as to whether the land be placed under agrarian reform, the land’s suitability to agriculture, the degree or development of the slope, etc., the conflict shall be resolved by a composite team of the DAR, LBP, DENR and DA which shall jointly conduct further investigation. The team’s findings shall be binding on both DAR and LBP. After the field investigation, the DAR Municipal Office shall prepare the Field Investigation Report and Land Use Map, a copy of which shall be furnished the landowner "by personal delivery with proof of service or registered mail with return card." Another copy of the Report and Map shall likewise be posted for at least one week in the municipal or barangay halls where the property is located.

Clearly then, the notice requirements under the CARL are not confined to the Notice of Acquisition set forth in Section 16 of the law. They also include the Notice of Coverage first laid down in DAR A. O. No. 12, Series of 1989 and subsequently amended in DAR A. O. No. 9, Series of 1990 and DAR A. O. No. 1, Series of 1993. This Notice of Coverage does not merely notify the landowner that his property shall be placed under CARP and that he is entitled to exercise his retention right; it also notifies him, pursuant to DAR A. O. No. 9, Series of 1990, that a public hearing shall be conducted where he and representatives of the concerned sectors of society may attend to discuss the results of the field investigation, the land valuation and other pertinent matters. Under DAR A. O. No. 1, Series of 1993, the Notice of Coverage also informs the landowner that a field investigation of his landholding shall be conducted where he and the other representatives may be present.42

The procedure prescribed in Section 16 of RA 6657 is a summary administrative proceeding. As outlined in Roxas, the said procedure, taken together with the pertinent administrative issuances of the DAR, ensures compliance with the due process requirements of the law. More importantly, this summary administrative proceeding does not preclude judicial

determination of just compensation. In fact, paragraph (e) of Section 16 of RA 6657 is categorical on this point as it provides that "[a]ny party who disagrees with the decision may bring the matter to the court of proper jurisdiction for final determination of just compensation."

In Land Bank of the Philippines v. Court of Appeals,43 the Court underscored that the jurisdiction of the RTCs, sitting as Special Agrarian Courts, over petitions for the determination of just compensation is original and exclusive as provided in Section 5744 of RA 6657. As such, direct resort to the RTC, sitting as a Special Agrarian Court, is valid:

x x x It is clear from Sec. 57 that the RTC, sitting as a Special Agrarian Court, has "original and exclusive jurisdiction over all petitions for the determination of just compensation to landowners." This "original and exclusive" jurisdiction of the RTC would be undermined if the DAR would vest in administrative officials original jurisdiction in review of administrative decisions. Thus, although the new rules speak of directly appealing the decision of adjudicators to the RTCs sitting as Special Agrarian Courts, it is clear from Sec. 57 that the original and exclusive

jurisdiction to determine such cases is in the RTCs. Any effort to transfer such jurisdiction of the RTCs into an appellate jurisdiction would be contrary to Sec. 57 and therefore would be void. Thus, direct resort to the SAC by private respondent is valid.45

In relation thereto, the Court in its Administrative Circular No. 29-2002 dated July 1, 2002, delineated the jurisdiction of the DAR and the Special Agrarian Courts with the view of avoidance of conflict of jurisdiction under RA 6657, thus:

In view of the increasing number of complaints on matters of jurisdiction over agrarian disputes, the concerned trial court judges are reminded of the need for a careful and judicious application of Republic Act No. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988, in order to avoid conflict of jurisdiction with the Department of Agrarian Reform (DAR) or the Department of Environment and Natural Resources (DENR). Conflict in jurisdiction must be avoided to prevent delay in the resolution of agrarian problems. In appropriate cases before it the court concerned must not tolerate any delay.

For this purpose, pertinent provisions of R.A. No. 6657 delineating jurisdiction over agrarian disputes are hereby reproduced:

Section 50. Quasi-Judicial Powers of the DAR. – The DAR is hereby vested with primary jurisdiction to determine and adjudicate agrarian reform matters and shall have exclusive original jurisdiction over all matters involving the implementing of agrarian reform, except those falling under the exclusive jurisdiction of the Department of Agriculture (DA) and the Department of Environment and Natural Resources (DENR).

Section 55. No Restraining Order or Preliminary Injunction. – No court in the Philippines shall have jurisdiction to issue any restraining order or writ of preliminary injunction against PARC or any of its duly authorized or designated agencies in any case, dispute or application, implementation, enforcement, or interpretation of this Act and other pertinent laws on agrarian reform.

Section 56. Special Agrarian Courts. -- The Supreme Court shall designate at least one (1) branch of the Regional Trial Court (RTC) within each province to act as a Special Agrarian Court.

The Supreme Court may designate more branches to constitute such additional Special Agrarian Courts as may be necessary to cope with the number of agrarian cases in each province. In the designation, the Supreme Court shall give preference to the Regional Trial Courts which have been assigned to handle agrarian cases or whose presiding judges were former judges of the defunct Court of Agrarian Relations.

The Regional Trial Court (RTC) judges assigned to said courts shall exercise said special jurisdiction in addition to the regular jurisdiction of their respective courts.

The Special Agrarian Courts shall have the powers and prerogatives inherent in or belonging to the Regional Trial Courts.

Section 57. Special Jurisdiction. – The special Agrarian Courts shall have original and exclusive jurisdiction over all petitions for the determination of just compensation to land owners, and the prosecution of all criminal offenses under this Act. The Rules of Court shall apply to all proceedings before the Special Agrarian Courts, unless modified by this Act.

The Special Agrarian Courts shall decide all appropriate cases under their special jurisdiction within thirty (30) days from submission of the case for decision.

Further, the trial court judges concerned are directed to take note of the decisions of the Supreme Court of 3 December 1990 in Vda. De Tangub vs. Court of Appeals [191 SCRA 885), and of 13 September 1991 in Quismundo vs. Court of Appeals (201 SCRA 609).

Strict compliance is hereby enjoined. The Office of the Court Administrator is directed to implement this Administrative Circular, which shall take effect upon its issuance.

Rule 67 of the Rules of Court is not entirely disregarded in the implementation of RA 6657

The petitioners’ main objection to paragraphs (d), (e) and (f) of Section 16 of RA 6657 is that they are allegedly in complete disregard of the expropriation proceedings prescribed under Rule 67 of the Rules of Court. The petitioners’ argument does not persuade. As declared by the Court in Association of Small Landowners, we are not dealing here with the traditional exercise of the power of eminent domain, but a revolutionary kind of expropriation:

x x x However, we do not deal here with the traditional exercise of the power of eminent domain. This is not an ordinary expropriation where only a specific property of relatively limited area is sought to be taken by the State from its owner for a specific and perhaps local purpose. What we deal with here is a revolutionary kind of expropriation.

The expropriation before us affects all private agricultural lands whenever found and of whatever kind as long as they are in excess of the maximum retention limits allowed their owners. This kind of expropriation is intended for the benefit not only of a particular community or of a small segment of the population but of the entire Filipino nation, from all levels of our society, from the impoverished farmer to the land-glutted owner. Its purpose does not cover only the whole territory of this country but goes beyond in time to the foreseeable future, which it hopes to secure and edify with the vision and the sacrifice of the present generation of Filipinos. Generations yet to come are as involved in this program as we are today, although hopefully only as beneficiaries of a richer and more fulfilling life we will guarantee to them tomorrow through our thoughtfulness today. And, finally, let it not be forgotten that it is no less than the Constitution itself that has ordained this revolution in the farms, calling for "a just distribution" among the farmers of lands that have heretofore been the prison of their dreams and deliverance.46

Despite the revolutionary or non-traditional character of RA 6657, however, the chief limitations on the exercise of the power of eminent domain, namely: (1) public use; and (2) payment of just compensation, are embodied therein as well as in the Constitution.

With respect to "public use," the Court in Association of Small Landowners declared that the requirement of public use had already been settled by the Constitution itself as it "calls for agrarian reform, which is the reason why private agricultural lands are to be taken from their owners, subject to the prescribed maximum retention limits. The purposes specified in P.D. No. 27,47 Proc. No. 13148 and RA No. 6657 are only an elaboration of the constitutional injunction that the State adopt the necessary measures ‘to encourage and undertake the just distribution of all agricultural lands to enable farmers who are landless to own directly or collectively the lands they till.’ That public use, as pronounced by the fundamental law itself, must be binding on us."49

On the other hand, judicial determination of just compensation is expressly prescribed in Section 57 of RA 6657, quoted above, as it vests on the Special Agrarian Courts original and exclusive jurisdiction over all petitions for the determination of just compensation to landowners. It bears stressing that the determination of just compensation during the compulsory acquisition proceedings of Section 16 of RA 6657 is preliminary only.

Section 57 of RA 6657 authorizes not only direct resort to the Special Agrarian Courts in cases involving petitions for the determination of just compensation, it likewise mandates that the "Rules of Court shall apply to all

proceedings before the Special Agrarian Courts, unless modified by this Act." Hence, contrary to the contention of the petitioners, the Rules of Court, including Rule 67 thereof, is not completely disregarded in the implementation of RA 6657 since the Special Agrarian Courts, in resolving petitions for the determination of just compensation, are enjoined to apply the pertinent provisions of the Rules of Court. Moreover, Section 58 of RA 6657, like Rule 67 of the Rules of Court, provides for the appointment of commissioners by the Special Agrarian Courts:

SEC. 58. Appointment of Commissioners. – The Special Agrarian Courts, upon their own initiative or at the instance of any of the parties, may appoint one or more commissioners to examine, investigate and ascertain facts relevant to the dispute, including the valuation of properties, and to file a written report thereof to the court.

The petitioners’ contention that RA 6657 contradicts the dictum in EPZA by eliminating the appointment by the court of commissioners to appraise the valuation of the land is, therefore, erroneous.

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 scope of lands subjected to agrarian reform under RA 6657 has been characterized as overwhelming, even broader in scope than that of PD 27. While the latter (PD 27) applies to all private agricultural lands primarily devoted to rice and corn with tenant farmers under a system of sharecrop or lease tenancy, RA 6657 generally covers all public and private agricultural lands regardless of tenurial arrangement and commodity produced.50

The petitioners insist that the system of Land Administration should be maintained to govern the relations between the sugar planters and the farmworkers because sugar is one of the crops that is more suitably and efficiently produced by plantation-type agriculture rather than by small and owner-cultivated farms. In Association of Small Landowners, however, the matter of the inclusion of sugar farms in the coverage of RA 6657 had already been settled. The sugar planters therein argued that there was no tenancy problem in the sugar areas that could justify the application of RA 6657 and that they should not have been lumped in the same legislation as the others because they (sugar planters) belong to a particular class with particular interests of their own.

Rejecting this particular argument, the Court held that the sugar planters failed to show that they belong to a different class and are entitled to a different treatment. It thus upheld the classification made by RA 6657, insofar as it included the sugar farms, as conforming to the following requirements: (1) it must be based on substantial distinctions; (2) it must be germane to the purposes of the law; (3) it must not be limited to existing conditions only; (4) it must apply equally to all the members of the class.51

Indeed, it is not within the power of the Court to pass upon or look into the wisdom of the inclusion by Congress of the sugar lands in the coverage of RA 6657. It is basic in our form of government that the judiciary cannot inquire into the wisdom or expediency of the acts of the executive or the legislative department, for each department is supreme and independent of the others, and each is devoid of authority not only to encroach upon the powers or field of action assigned to any of the other departments, but also to inquire into or pass upon the advisability or wisdom of the acts performed, measures taken or decisions made by the other departments.52

The other issues raised by the petitioners require factual determination which the Court cannot properly undertake in the present case

The petitioners allege that the DAR, without consulting the regular farmworkers on whether or not they want to exercise their right to own the land they till, "indiscriminately sends notices of coverage and acquisition to practically all the planters and leaves the matter of identifying and convincing the prospective beneficiaries later."53 It is also alleged that "in ACTUAL PRACTICE in the sugar lands of planter members of petitioners-federations, DAR, in collusion with some NGOs and other ‘instant’ farmer organizations, designated as ‘beneficiaries’, non-tillers, non-regular farmers, and outsiders of the land and other unqualified groups to eject and

replace the regular farmworkers and later on installed these ‘beneficiaries’ on the sugar lands, with the assistance of the AFP or the PNP."54

The petitioners also made the statement that "what is actually happening in the country today, particularly in the sugar-producing regions, is that Certificates of Title of the landowners are being canceled by LRA merely upon the directive or request by DAR, without asking the landowner to surrender his owner’s duplicate of title or even notifying him that, whether he likes it or not, the Register of Deeds will cancel his certificate of title and issue a new certificate in the name of the Republic of the Philippines."55

These allegations of the petitioners, however, remain as such – mere allegations, unsupported by any evidence to prove their veracity or truthfulness. Moreover, they require de novo appreciation of factual questions. No trial court has had the opportunity to ascertain the validity of these factual claims, the appreciation of which is beyond the function of this Court since it is not a trier of facts.56

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

SO ORDERED.

Republic of the PhilippinesSUPREME COURT

Manila

FIRST DIVISION

G.R. No. 168787 September 3, 2008

DEPARTMENT OF AGRARIAN REFORM, represented by Provincial Agrarian Reform Officer STEPHEN M. LEONIDAS, petitioner, vs.POLO COCONUT PLANTATION CO., INC., FLORENCIA D. REMOLLO, NOLI C. ALCANTARA,1ZOSIMO BARBA, ROBERT B. BAJANA, EMETERIO V. TAG-AT, JUVENAL T. MENDEZ,2 SHIELA R. REYES, JONITA M. CADALLO, PRISCO P. BACO, BENJAMIN C. DAYAP, ANTONIO DEDELES,3 NARCISO D. DIAZ, JOVENIANO REYES,4 RODOLFO C. SALVA, AVELINO C. BAJANA, PRAXEDES BAJANA, ALEJANDRO T. GIMOL, EMELINA B. SEDIGO5 andHERMINIGILDO VILLAFLORES, respondents.

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

G.R. No. 169271 September 3, 2008

MARTINA Q. ABARCA, TOLENTINA E. ABLAY, CONCHITA M. AC-AC, JOSEPHINA S. AC-AC, LORETA C. AC-AC, CARIDAD Q. AGUILAR, DIOSDADO A. AGUILAR, ROMULO S. AGUILAR, SHERLITA T. AGUILAR, WILFREDO T. ALCANTARA, ANACLETO B. ALFORQUE, RICARDO P. BACO, RODRIGO P. BACO, SR., DARIO B. BAJANA, SR., DEMETRIO F. BALBUENA, GREGORIA R. BARBA, TOMAS T. BARBA, WILFREDO R. BARBA, VIVIAN F. BAROT, DOMINGO O. BAROY, ARTURO A. BORROMEO, FEDENCIA R. BORROMEO, JUANITA P. CABIL, SALVADOR A. CABORNAY, SEVERINO M. CABUG-OS, AUREA M. CALDA, BALTAZAR R. CATALOÑA, DANILOO B. CURATO, ARNULFO B. DAEL, DEMOCRITO B. DAGODOG, GENARO C. DURAN, JOSEPHINE M. ELLEMA, ALBINA R. ELMAGA, ENRIQUE R. ELMAGA, EDWIN L. ELUMIR, TOMAS M. GABIHAN, ALBERTO A. GASO, PEDRO R. GASO, VISITACION S. GASO, ERLINDA S. GAZO, ANDRES M. GENEL, DIOSCOR M. GENEL, ANGEL R. GOMEZ, LORENZO S. GOMEZ, SANTIAGO T. GOMEZ, SILANDO Q. GOMEZ, CONSORCIA G. GUEVARRA, FREDESWINDA M. GUMA, CELODONIA A.

GUZMAN, HERCULANO B. GUZMAN, JR., CESAR Q. HAROY, SR., EDDIE Q. HAROY, ROMEO E. INOFERIO, GENARA R. JUANO, GEVINO B. JUANO, SR., ROGELIA B. JUANO, ROSALITA G. JUANO, DIOGRACIAS R. LARAZAN, RELINA H. LARENA, JOSE G. MAGALSO, INOCENCIA G. MALCO, LUCENA B. MALTO, SANTOS S. MALTAO, ELINA T. MARIMAT, RAMON C. MARIMAT, MERCY B. MARO, RUTHELMA D. MARO, CHARITA S. MATEO, ALMA D. MEDINA, ABUNDIO M. MENDEZ, RENOLD S. MINDEZ, ALBERTO B. MIRA, GAUDENCIA S. MIRA, CRESTITA D. MONTAÑA, DIONISIA T. MONTAÑA, LORETO R. NAPAO, ALICIA P. NILLAS, ESPERANZA M. OMATANG, JR., FELICISIMA M. ORACION, JOEL M. ORACION, PATROCINIO T. PAO, LOURDES T. PARTOSA, FABIAN S. PIÑERO, FELIX R. PUBLICO, MARIBELLE B. PUBLICO, CARMELITA M. QUILARIO, ENRIQUE R. QUILARIO, MANOLITA M. QUILARIO, MIGUEL S. QUILERIO, LEONILA J. QUINQUILLERIA, DELTA M. RAMIREZ, ELIAS O. RAMOS, CONSOLACION T. REAL, ERLINDA I. REGALA, DOMINGA M. REMAN, EUGENIO O. REMAN, PEPITA R. REMAN, RODNEY D. REMAN, RONNIE O. REMAN, SR., DOMINADOR P. REMPOJO, EUTIQUIO T. REMPOJO, ROSITA C. REMPOJO, CAROLINA T. REYES, DIONISIA M. REYES, EUGENIA B. REYES, LORETA D. REYES, MARIO S. REYES, LAUREANO C. RIVERA, PETER C. RIVERA, EVANGELINE Q. RODRIGUEZ, RICARDO R. RODRIGUEZ, PATROCINIO I. SABIHON, FELIPE G. SAGA, ANESIA D. SALIN, FLAVIANO T. SALIN, JR., WENEFREDO T. SALIN, VIRGILIO B. SALOMA, ESTELA S. SALVA, GEORGE R. SALVA, TEOFISTA R. SALVA, JOSEPHINE T. SEDIGO, MICHAEL P. SEGISMAR, SR., JOSEPH S. SEVILLA, MARISSA H. SIENES, MA. GINA M. SILVA, ARTURO T. SOLITANA, MARILYN M. TABORA, GABINO G. TEMBLOR, REYNALDO Q. TEMBLOR, ELSA A. TEVES, LEONORA D. TORCO, GREGORIA O. TOROY, ANDRES P. TORRES, HILARIO P. TORRES, LEONARDO G. TORRES, MANOLITA T. TORRES, GENEROSO I. TORRES, LEONARDO F. TUBAGA, AGRIPINO P.TURCO, FLORDELICO S. VERBO, OLYMPIA T. YORONG and ROSENDA C. ZERNA, petitioners,vs.POLO COCONUT PLANTATION CO., INC., FLORENCIA D. REMOLLO, NOLE C. ALCANTARA, ZOSIMO BARBA, ROBERT B. BAJANA,6 EMETERIO V. TAG-AT, JUVENAL T. MENDEZ, SHIELA R. REYES, JONITA M. CADALLO, PRISCO P. BACO, BENJAMIN C. DAYAP, ANTONIO DEDELES, NARCISO D. DIAZ, JOVENIANO REYES, RODOLFO C. SALVA, AVELINO C. BAJANA, PRAXEDES BAJANA, ALEJANDRO T. GIMOL, MELINA B. SEDIGO and HERMINIGILDO VILLAFLORES, respondents.

D E C I S I O N

CORONA, J.:

In the late 1990s, respondent Polo Coconut Plantation Co., Inc. (PCPCI) sought to convert 280 hectares of its Polo Coconut Plantation7 (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 ecozone8subject to certain terms and conditions including the submission of "all government clearances, endorsements and documents required under Rule IV, Section 3 of the Rules and Regulations to Implement Republic Act (RA) 7916."

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. After conducting the prescribed hearing, the Sangguniang Bayan of Tanjay adopted Resolution No. 344 granting PCPCI's application on November 3, 1999.

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.9

Sometime in 2003, petitioner 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)10 and would be acquired by the government.

Thereafter, Leonidas requested the Registrar of Deeds of Negros Oriental to cancel PCPCI's certificate of title and to issue a new one in the name of the Republic of the Philippines. He likewise asked Region VII Regional Agrarian Reform Adjudicator Arnold C. Arrieta to determine the just compensation due to PCPCI.11

On January 29, 2004, a new certificate of title was issued in the name of the Republic of the Philippines.12 The next day, that title was cancelled and another was issued in the name of petitioners in G.R. No. 169271 (petitioners-beneficiaries).13

Meanwhile, on March 11, 2004, Arrieta approved the land valuation (P85,491,784.60)14 of the Land Bank of the Philippines for the Polo estate. PCPCI moved for reconsideration but it was denied in an order dated March 30, 2004.

On July 16, 2004, Leonidas informed PCPCI that a relocation survey of the Polo estate would be conducted. PCPCI moved for the suspension of the survey but it was denied.15

Aggrieved, PCPCI filed a petition for certiorari16 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.

In its February 16, 2005 decision, the 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:

WHEREFORE, in view of the foregoing premises, judgment is hereby rendered by usDECLARING as NOT VALID the acts of the [DAR] of subjecting PCPCI's [Polo estate] to the coverage of the CARP, of canceling and causing the cancellation of [PCPCI's] Transfer Certificate of Title No. T-2304 covering such land, of issuing or causing the issuance of Transfer Certificate of Title No. T-36318 for this land in the name of the Republic of the Philippines by way of transfer to it, of issuing or causing the issuance of Transfer Certificate of Title No. T-802 for the said land in the names of [petitioner-beneficiaries] in the case at bench by way of award of them of such land as purported farm beneficiaries and of doing other things with the end in view of subjecting [the Polo estate] to CARP coverage, SETTING ASIDE and ENJOINING such acts and the consequence thereof, ORDERING the [petitioner-beneficiaries] to vacate the premises of [the Polo estate] if they had entered such premises, and ORDERING the respondent Register of Deeds of Negros Oriental to cancel Transfer Certificate of Title Nos. T-36318 and T-802 and to reinstate Transfer Certificate of Title No. T-2304 in the name of petitioner PCPCI.

SO ORDERED.17

Both the DAR and petitioners-beneficiaries moved for reconsideration but they were denied.18 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 beneficiaries. While they were neither farmers nor regular farmworkers of PCPCI, they were either seasonal or other farmworkers.

There is merit in these petitions.

Non-Exhaustion of Administrative Remedies

Recourse to court action will not prosper until all remedies have been exhausted at the administrative level.19

Section 3, Rule II of the 2003 DARAB Rules of Procedure (DARAB Rules) provides:

Section 3. Agrarian Law Implementation Cases. The Adjudicator or Board shall have no jurisdiction over matters involving the implementation of RA 6657 otherwise known as the Comprehensive Agrarian Reform Law (CARL) of 1988 and other related agrarian laws enunciated by pertinent rules and administrative orders, which shall be under the exclusive prerogative of and cognizable by the Office of the Secretary of the DAR in accordance with his issuances to wit:

3.1. Classification and identification of landholdings for coverage under the agrarian reform program and the initial issuance of [certificates of land ownership award] and [emancipation patents], including protests or oppositions thereto and petitioners for lifting of such coverage;

3.2. Classification, identification, inclusion, exclusion, qualification or disqualification of potential/actual farmer/beneficiaries; (emphasis supplied)

x x x x x x x x x

Protests regarding the implementation of the CARP fall under the exclusive jurisdiction of the DAR Secretary. He determines whether a tract of land is covered by or exempt from CARP.20 Likewise, questions regarding the eligibility of CARP beneficiaries must be addressed to him. The DAR Secretary decides to whom lands placed under the CARP shall be distributed.21

Before PCPCI filed its petition for certiorari in the CA, it did not file a protest or opposition questioning the propriety of subjecting the Polo estate to the CARP. Neither did it assail the eligibility of petitioners-beneficiaries before the DAR Secretary. There were available administrative remedies under the DARAB Rules but PCPCI did not avail of them.

Moreover, a special civil action for certiorari under Rule 65 of the Rules of Court can be availed of only in the absence of an appeal or any plain, speedy and adequate remedy in the ordinary course of law.22Here, recourse to the DAR Secretary was the plain, speedy and adequate remedy in the ordinary course of law contemplated by Rule 65.

Non-Conversion To MixedResidential, Commercial and Industrial Land

In Ros v. DAR,23 we held that reclassified agricultural lands must undergo the process of conversion in the DAR24 before they may be used for other purposes.25 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.26 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.27 This PCPCI failed to do.

PEZA Resolution No. 98-320 expressly provides:

Resolved, that the application of [PCPCI] for (1) declaration of the 280-hectare property in Brgy. Polo, Municipality of Tanjay, Province of Negros Oriental as a Special Economic Zone, subject to Presidential

Proclamation, henceforth to be to be known as POLO ECOCITY- SPECIAL ECONOMIC ZONE and (2) registration as the Developer/Owner of the said ECOZONE is herebyAPPROVED subject to the following terms and conditions:

x x x x x x x x x

2. Prior to PEZA's endorsement of the subject area to the President for proclamation as an ECOZONE, the PCPCI shall submit all government clearances, endorsements and documents required under Rule IV, Section 3 of the [Rules and Regulations to Implement RA 7916];

x x x x x x x x x

This condition proves that the favorable recommendation of PEZA did not ipso facto change the nature of the Polo estate. The property remained as agricultural land and, for this reason, was still subject to the CARP.

In fact, Resolution No. 16 did not exempt PCPCI's agricultural lands (including the Polo estate) from the CARP. Section 20 of the Local Government Code28 provides that a city or municipality can reclassify land only through the enactment of an ordinance. In this instance, reclassification was undertaken by mere resolution;29 thus, it was invalid.

Qualification Of CARPBeneficiaries

Section 22 of the CARL provides:

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

(a) agricultural lessees and share tenants;

(b) regular farmworkers;

(c) seasonal farmworkers;

(d) other farmworkers;

(e) actual tillers or occupants of public lands;

(f) collectives or cooperatives of the abovementioned beneficiaries and

(g) others directly working on the land.

x x x x x x x x x

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

x x x x x x x x x

This provision enumerates who are qualified beneficiaries of the CARP. Determining whether or not one is eligible to receive land involves the administrative implementation of the program. For this reason, only the DAR Secretary can identify and select CARP beneficiaries. Thus, courts cannot substitute their judgment unless there is a clear showing of grave abuse of discretion.30

Section 22 of the CARL does not limit qualified beneficiaries to tenants of the landowners. Thus, the DAR cannot be deemed to have committed grave abuse of discretion simply because its chosen beneficiaries were not tenants of PCPCI.

WHEREFORE, the petitions are hereby GRANTED. The February 16, 2005 decision and June 29, 2005 resolution of the Court of Appeals in CA-G.R. CEB-SP No. 00043 are REVERSED and SET ASIDE.

The March 11, 2004, March 30, 2004 and August 30, 2004 orders of Region VII Regional Agrarian Reform Adjudicator Arnold C. Arrieta in RARAD Case No. VII-N-1284-2004 are REINSTATED. Transfer Certificate of Title No. T-802 and Certificate of Land Ownership Award No. 00114438 are declaredVALID.

SO ORDERED.

Republic of the PhilippinesSUPREME COURT

Manila

THIRD DIVISION

G.R. No. 180471 March 26, 2010

ALANGILAN REALTY & DEVELOPMENT CORPORATION, Petitioner, vs.OFFICE OF THE PRESIDENT, represented by ALBERTO ROMULO, as Executive Secretary, and ARTHUR P. AUTEA, as Deputy Secretary; and DEPARTMENT OF AGRARIAN REFORM, Respondents.

D E C I S I O N

NACHURA, J.:

At bar is a petition for review on certiorari under Rule 45 of the Rules of Court filed by Alangilan Realty & Development Corporation (petitioner), challenging the August 28, 2007 Decision1 and the November 12, 2007 Resolution2 of the Court of Appeals (CA) in CA-G.R. SP No. 76525.

Petitioner is the owner/developer of a 17.4892-hectare land in Barangays Alangilan and Patay in Batangas City (Alangilan landholding). On August 7, 1996, 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, on May 17, 1994, the 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. In support of its application, petitioner submitted a certification4 dated October 31, 1995 of Zoning Administrator Delia O. Malaluan.

On May 6, 1997, then DAR Secretary Ernesto Garilao issued an Order5 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.

The DAR Secretary disposed thus:

WHEREFORE, premises considered, the herein application for exemption involving seventeen (17) parcels of land with an aggregate area of 23.9258 hectares located [in] Calicanto, Alangilan and Patay, Batangas City is hereby GRANTED insofar as the 4.9123 hectares [of] Calicanto landholdings are concerned and DENIED with respect to the 17.4892 Alangilan properties, subject to the payment of disturbance compensation to qualified tenants, if any there be.

SO ORDERED.6

Petitioner moved for reconsideration of the Order, arguing that the Alangilan landholding was already reserved for residential use as early as October 6, 1982. Invoking this Court’s ruling in Natalia Realty, Inc. v. Department of Agrarian Reform,7 petitioner insisted that the subject landholding was outside the coverage of the CARP. Petitioner also submitted a Supplemental to Motion for Reconsideration,8 arguing that the landholding had already been reclassified as reserved for residential and had been earmarked for residential use even before the effectivity of the CARL. Accordingly, its non-development into a subdivision did not remove the landholding’s zoning classification as reserved for residential.

On July 8, 1997, petitioner submitted an Addendum to Supplemental to Motion for Reconsideration,9 attaching another certification stating that the Alangilan landholding was zoned as reserved for residential in 1982, and became residential-1 in 1994. In a 2nd Addendum to Supplemental to Motion for Reconsideration,10 petitioner submitted another certification whereby the zoning administrator withdrew her first certification and clarified that the phrase agricultural, reserved for residential spoke of two

classifications, namely, agricultural (coded brown in the map) and reserved for residential (coded brown with diagonal lines), stating further that the Alangilan landholding was reserved for residential.

However, the DAR Secretary was not at all persuaded, and denied petitioner’s motion for reconsideration on December 21, 1998, viz.:

After a careful review and evaluation of the case, this Office finds no cogent reason to reverse its Order, dated 6 May 1997.

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. Moreso 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.

It is also important to note, that the legend used in the Zoning Map of Batangas City approved by HSRC (now HLURB) per Resolution No. 92, dated 6 October 1982, indicated a certain kind of arrangement which put in sequential order those that were similarly zoned, but with different qualifications and/or characteristics. Thus, "residential-1," "residential-2," and "residential-3" were placed on top of the list one after the other, while "Agricultural, reserved for residential" and mining agricultural were put at the bottom, but also enumerated one after the other. If the subject properties were classified more of residential than agricultural, it should have been placed in the legend right after "residential-3", and the color that should have been used was not brown but a shade of white with diagonal lines to reflect its dominant residential character.

Even the Applicant was aware that the classification of the area was agricultural. In his letter to the MARO of Batangas City, dated 24 October 1995, the Applicant categorically admitted that the Alangilan Landholding was classified as agricultural. The said letter stated as follows:

At present, the subject properties are classified as agricultural. However, Barangay Alangilan where these properties are located have been declared by an ordinance of the Municipal Council of Batangas City as commercial, industrial and/or residential.

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.

We could not give credence to the 3rd Certification, dated 9 December 1997, of Zoning Administrator Delia Malaluan-Licarte, because it does not conform to the Batangas City Zoning Ordinance and Map approved under HSRC Resolution No. R-92, series of 1982, dated 6 October 1982. In the first place, what is asked from Zoning Administrators is merely to state the kind of classification/zoning where a certain area falls as provided in the approved Zoning Ordinance. In the case at bar, the Zoning Administrator went beyond her authority. In effect, she reclassified the area from "Agricultural, Reserved for Residential" to "Reserved for Residential" by claiming that there were actually two zones provided by the Sanggunian Members. It was actually a modification of the zoning ordinance which, to us, is clearly unwarranted.

Moreover, even assuming the Zoning Administrator is correct, the classification "Reserved for Residential" is not within the contemplation of A.O. No. 6, series of 1994. The said A.O. talks about lands that were classified as residential before 15 June 1988. Alangilan Landholding was merely reserved for Residential. It connotes something in the future, which is, that the land may be classified as residential in some future time. It was identified as an

expansion area, nothing else. The fact remains that in 1982, the landholding was still Agricultural, and this fact is not changed by the re-interpretation made by Zoning Administrator Delia Malaluan-Licarte.11

On appeal, the Office of the President (OP) affirmed the decision of the DAR Secretary:

WHEREFORE, premises considered, the instant appeal is hereby DISMISSED and the appealed Order dated 21 December 1998 of the Department of Agrarian Reform [is] AFFIRMED in toto.

Parties are required to INFORM this Office, within five (5) days from notice, of the dates of their receipt of this Decision.

SO ORDERED.12

A motion for reconsideration was filed, but the motion also suffered the same fate, as the OP denied it on March 20, 2003.13

Petitioner went up to the CA via a petition for review on certiorari, assailing the OP decision. On August 28, 2007, the 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 on June 15, 1988 and even thereafter. Likewise, there was no showing that it was classified as commercial, industrial, or residential in town plans and zoning ordinances of the Housing and Land Use Regulatory Board. Accordingly, the Alangilan property did not cease to be agricultural. The 1994 Ordinance classifying the property as residential-1 did not convert or reclassify the Alangilan landholding as residential because there was no proof that a conversion clearance from the DAR was obtained. Thus, despite its reclassification in 1994 by the City Government of Batangas, the Alangilan landholding remained under CARP coverage. Petitioner filed a motion for reconsideration, but the CA denied it on November 12, 2007.

Hence, this appeal by petitioner, arguing that:

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

Petitioner insists on exemption of the Alangilan landholding from CARP coverage. It argues that the subject landholding had already been converted into non-agricultural use long before the advent of the CARP. The passage of the 1982 Ordinance, classifying the property as reserved for residential, it asserts, effectively transformed the land into non-agricultural use, and thus, outside the ambit of the CARL. It cites Natalia, wherein it was ruled that lands intended for residential use are outside the coverage of the CARL.

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.

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.

Petitioner cannot take refuge in our ruling in Natalia. The case is not on all fours with the instant case. In Natalia, the entire property was converted into residential use in 1979 and was developed into a low-cost housing subdivision in 1982. Thus, the property was no longer devoted to agricultural use at the time of the effectivity of the CARL.

In this case, however, petitioner failed to establish that the subject landholding had already been converted into residential use prior to June 15, 1988. We also note that the subject landholding was still being utilized for agricultural activities at the time of the filing of the application for exemption. The ocular inspection, jointly conducted by the MARO, PARO and RARO, disclosed that the landholding was planted with mangoes and coconuts.15

In Department of Agrarian Reform v. Oroville Development Corporation,16 we held:

[i]n order to be exempt from CARP coverage, the subject property must have been classified as industrial/residential before June 15, 1988. In this case, the DAR's examination of the zoning ordinances and certifications pertaining to the subject property, as well as its field investigation, disclosed that the same remains to be agricultural. The Zoning Certifications to the effect that the land is within the city's potential growth area for urban expansion are inconsequential as they do not reflect the present classification of the land but merely its intended land use.

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.

In a last-ditch effort to secure a favorable decision, petitioner assails the authority of the DAR Secretary to determine the classification of lands. It asserts that the power to classify lands is essentially a legislative function that exclusively lies with the legislative authorities, and thus, when the Sangguniang Bayan of Batangas City declared the Alangilan landholding as residential in its 1994 Ordinance, its determination was conclusive and cannot be overruled by the DAR Secretary.

The argument is specious.

The exclusive jurisdiction to classify and identify landholdings for coverage under the CARP is reposed in the DAR Secretary. The matter of CARP coverage, like the instant case for application for exemption, is strictly part of the administrative implementation of the CARP, a matter well within the competence of the DAR Secretary.17 As we explained in Leonardo Tarona, et al. v. Court of Appeals (Ninth Division), et al.:181avvphi1

The power to determine whether a property is subject to CARP coverage lies with the DAR Secretary pursuant to Section 50 of R.A. No. 6657. Verily, it is explicitly provided under Section 1, Rule II of the DARAB Revised Rules that matters involving strictly the administrative implementation of the CARP and other agrarian laws and regulations, shall be the exclusive prerogative of and cognizable by the Secretary of the DAR.

Finally, it is well settled that factual findings of administrative agencies are generally accorded respect and even finality by this Court, if such findings are supported by substantial evidence. The factual findings of the DAR Secretary, who, by reason of his official position, has acquired expertise in specific matters within his jurisdiction, deserve full respect and, without justifiable reason, ought not to be altered, modified, or reversed.19 In this case, petitioner utterly failed to show justifiable reason to warrant the reversal of the decision of the DAR Secretary, as affirmed by the OP and the CA.

WHEREFORE, the petition is DENIED. The assailed Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 76525 are AFFIRMED.

Costs against petitioner.

SO ORDERED.

RETENTION LIMITS:

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. 78742 July 14, 1989

ASSOCIATION OF SMALL LANDOWNERS IN THE PHILIPPINES, INC., JUANITO D. GOMEZ, GERARDO B. ALARCIO, FELIPE A. GUICO, JR., BERNARDO M. ALMONTE, CANUTO RAMIR B. CABRITO, ISIDRO T. GUICO, FELISA I. LLAMIDO, FAUSTO J. SALVA, REYNALDO G. ESTRADA, FELISA C. BAUTISTA, ESMENIA J. CABE, TEODORO B. MADRIAGA, AUREA J. PRESTOSA, EMERENCIANA J. ISLA, FELICISIMA C. ARRESTO, CONSUELO M. MORALES, BENJAMIN R. SEGISMUNDO, CIRILA A. JOSE & NAPOLEON S. FERRER,petitioners, vs.HONORABLE SECRETARY OF AGRARIAN REFORM, respondent.

G.R. No. 79310 July 14, 1989

ARSENIO AL. ACUNA, NEWTON JISON, VICTORINO FERRARIS, DENNIS JEREZA, HERMINIGILDO GUSTILO, PAULINO D. TOLENTINO and PLANTERS' COMMITTEE, INC., Victorias Mill District, Victorias, Negros Occidental, petitioners, vs.JOKER ARROYO, PHILIP E. JUICO and PRESIDENTIAL AGRARIAN REFORM COUNCIL, respondents.

G.R. No. 79744 July 14, 1989

INOCENTES PABICO, petitioner, vs.HON. PHILIP E. JUICO, SECRETARY OF THE DEPARTMENT OF AGRARIAN REFORM, HON. JOKER ARROYO, EXECUTIVE SECRETARY OF THE OFFICE OF THE PRESIDENT, and Messrs. SALVADOR TALENTO, JAIME ABOGADO, CONRADO AVANCENA and ROBERTO TAAY, respondents.

G.R. No. 79777 July 14, 1989

NICOLAS S. MANAAY and AGUSTIN HERMANO, JR., petitioners, vs.HON. PHILIP ELLA JUICO, as Secretary of Agrarian Reform, and LAND BANK OF THE PHILIPPINES,respondents.

CRUZ, J.:

In ancient mythology, Antaeus was a terrible giant who blocked and challenged Hercules for his life on his way to Mycenae after performing his eleventh labor. The two wrestled mightily and Hercules flung his adversary to the ground thinking him dead, but Antaeus rose even stronger to resume their struggle. This happened several times to Hercules' increasing amazement. Finally, as they continued grappling, it dawned on Hercules that Antaeus was the son of Gaea and could never die as long as any part of his body was touching his Mother Earth. Thus forewarned, Hercules then held Antaeus up in the air, beyond the reach of the sustaining soil, and crushed him to death.

Mother Earth. The sustaining soil. The giver of life, without whose invigorating touch even the powerful Antaeus weakened and died.

The cases before us are not as fanciful as the foregoing tale. But they also tell of the elemental forces of life and death, of men and women who, like Antaeus need the sustaining strength of the precious earth to stay alive.

"Land for the Landless" is a slogan that underscores the acute imbalance in the distribution of this precious resource among our people. But it is more than a slogan. Through the brooding centuries, it has become a battle-cry dramatizing the increasingly urgent demand of the dispossessed among us for a plot of earth as their place in the sun.

Recognizing this need, the Constitution in 1935 mandated the policy of social justice to "insure the well-being and economic security of all the people," 1 especially the less privileged. In 1973, the new Constitution affirmed this goal adding specifically that "the State shall regulate the acquisition, ownership, use, enjoyment and disposition of private property and equitably diffuse property ownership and profits." 2 Significantly, there was also the specific injunction to "formulate and implement an agrarian reform program aimed at emancipating the tenant from the bondage of the soil." 3

The Constitution of 1987 was not to be outdone. Besides echoing these sentiments, it also adopted one whole and separate Article XIII on Social Justice and Human Rights, containing grandiose but undoubtedly sincere provisions for the uplift of the common people. These include a call in the following words for the adoption by the State of an agrarian reform program:

SEC. 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.

Earlier, in fact, R.A. No. 3844, otherwise known as the Agricultural Land Reform Code, had already been enacted by the Congress of the Philippines on August 8, 1963, in line with the above-stated principles. This was substantially superseded almost a decade later by P.D. No. 27, which was promulgated on October 21, 1972, along with martial

law, to provide for the compulsory acquisition of private lands for distribution among tenant-farmers and to specify maximum retention limits for landowners.

The people power revolution of 1986 did not change and indeed even energized the thrust for agrarian reform. Thus, on July 17, 1987, President Corazon C. Aquino issued E.O. No. 228, declaring full land ownership in favor of the beneficiaries of P.D. No. 27 and providing for the valuation of still unvalued lands covered by the decree as well as the manner of their payment. This was followed on July 22, 1987 by Presidential Proclamation No. 131, instituting a comprehensive agrarian reform program (CARP), and E.O. No. 229, providing the mechanics for its implementation.

Subsequently, with its formal organization, the revived Congress of the Philippines took over legislative power from the President and started its own deliberations, including extensive public hearings, on the improvement of the interests of farmers. The result, after almost a year of spirited debate, was the enactment of R.A. No. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988, which President Aquino signed on June 10, 1988. This law, while considerably changing the earlier mentioned enactments, nevertheless gives them suppletory effect insofar as they are not inconsistent with its provisions. 4

The above-captioned cases have been consolidated because they involve common legal questions, including serious challenges to the constitutionality of the several measures mentioned above. They will be the subject of one common discussion and resolution, The different antecedents of each case will require separate treatment, however, and will first be explained hereunder.

G.R. No. 79777

Squarely raised in this petition is the constitutionality of P.D. No. 27, E.O. Nos. 228 and 229, and R.A. No. 6657.

The subjects of this petition are a 9-hectare riceland worked by four tenants and owned by petitioner Nicolas Manaay and his wife and a 5-hectare riceland worked by four tenants and owned by petitioner Augustin Hermano, Jr. The tenants were declared full owners of these lands by E.O. No. 228 as qualified farmers under P.D. No. 27.

The petitioners are questioning P.D. No. 27 and E.O. Nos. 228 and 229 on grounds inter alia of separation of powers, due process, equal protection and the constitutional limitation that no private property shall be taken for public use without just compensation.

They contend that President Aquino usurped legislative power when she promulgated E.O. No. 228. The said measure is invalid also for violation of Article XIII, Section 4, of the Constitution, for failure to provide for retention limits for small landowners. Moreover, it does not conform to Article VI, Section 25(4) and the other requisites of a valid appropriation.

In connection with the determination of just compensation, the petitioners argue that the same may be made only by a court of justice and not by the President of the Philippines. They invoke the recent cases of EPZA v. Dulay 5and Manotok v. National Food Authority. 6 Moreover, the just compensation contemplated by the Bill of Rights is payable in money or in cash and not in the form of bonds or other things of value.

In considering the rentals as advance payment on the land, the executive order also deprives the petitioners of their property rights as protected by due process. The equal protection clause is also violated because the order places the burden of solving the agrarian problems on the owners only of agricultural lands. No similar obligation is imposed on the owners of other properties.

The petitioners also maintain that in declaring the beneficiaries under P.D. No. 27 to be the owners of the lands occupied by them, E.O. No. 228 ignored judicial prerogatives and so violated due process. Worse, the measure

would not solve the agrarian problem because even the small farmers are deprived of their lands and the retention rights guaranteed by the Constitution.

In his Comment, the Solicitor General stresses that P.D. No. 27 has already been upheld in the earlier cases ofChavez v. Zobel, 7 Gonzales v. Estrella, 8 and Association of Rice and Corn Producers of the Philippines, Inc. v. The National Land Reform Council. 9 The determination of just compensation by the executive authorities conformably to the formula prescribed under the questioned order is at best initial or preliminary only. It does not foreclose judicial intervention whenever sought or warranted. At any rate, the challenge to the order is premature because no valuation of their property has as yet been made by the Department of Agrarian Reform. The petitioners are also not proper parties because the lands owned by them do not exceed the maximum retention limit of 7 hectares.

Replying, the petitioners insist they are proper parties because P.D. No. 27 does not provide for retention limits on tenanted lands and that in any event their petition is a class suit brought in behalf of landowners with landholdings below 24 hectares. They maintain that the determination of just compensation by the administrative authorities is a final ascertainment. As for the cases invoked by the public respondent, the constitutionality of P.D. No. 27 was merely assumed in Chavez, while what was decided in Gonzales was the validity of the imposition of martial law.

In the amended petition dated November 22, 1588, it is contended that P.D. No. 27, E.O. Nos. 228 and 229 (except Sections 20 and 21) have been impliedly repealed by R.A. No. 6657. Nevertheless, this statute should itself also be declared unconstitutional because it suffers from substantially the same infirmities as the earlier measures.

A petition for intervention was filed with leave of court on June 1, 1988 by Vicente Cruz, owner of a 1. 83- hectare land, who complained that the DAR was insisting on the implementation of P.D. No. 27 and E.O. No. 228 despite a compromise agreement he had reached with his tenant on the payment of rentals. In a subsequent motion dated April 10, 1989, he adopted the allegations in the basic amended petition that the above- mentioned enactments have been impliedly repealed by R.A. No. 6657.

G.R. No. 79310

The petitioners herein are landowners and sugar planters in the Victorias Mill District, Victorias, Negros Occidental. Co-petitioner Planters' Committee, Inc. is an organization composed of 1,400 planter-members. This petition seeks to prohibit the implementation of Proc. No. 131 and E.O. No. 229.

The petitioners claim that the power to provide for a Comprehensive Agrarian Reform Program as decreed by the Constitution belongs to Congress and not the President. Although they agree that the President could exercise legislative power until the Congress was convened, she could do so only to enact emergency measures during the transition period. At that, even assuming that the interim legislative power of the President was properly exercised, Proc. No. 131 and E.O. No. 229 would still have to be annulled for violating the constitutional provisions on just compensation, due process, and equal protection.

They also argue that under Section 2 of Proc. No. 131 which provides:

Agrarian Reform Fund.-There is hereby created a special fund, to be known as the Agrarian Reform Fund, an initial amount of FIFTY BILLION PESOS (P50,000,000,000.00) to cover the estimated cost of the Comprehensive Agrarian Reform Program from 1987 to 1992 which shall be sourced from the receipts of the sale of the assets of the Asset Privatization Trust and Receipts of sale of ill-gotten wealth received through the Presidential Commission on Good Government and such other sources as government may deem appropriate. The amounts collected and accruing to this special fund shall be considered automatically appropriated for the purpose authorized in this Proclamation the amount appropriated is in futuro, not in esse. The money needed to cover the cost of the contemplated expropriation has yet to be raised and cannot be appropriated at this time.

Furthermore, they contend that taking must be simultaneous with payment of just compensation as it is traditionally understood, i.e., with money and in full, but no such payment is contemplated in Section 5 of the E.O. No. 229. On the contrary, Section 6, thereof provides that the Land Bank of the Philippines "shall compensate the landowner in an amount to be established by the government, which shall be based on the owner's declaration of current fair market value as provided in Section 4 hereof, but subject to certain controls to be defined and promulgated by the Presidential Agrarian Reform Council." This compensation may not be paid fully in money but in any of several modes that may consist of part cash and part bond, with interest, maturing periodically, or direct payment in cash or bond as may be mutually agreed upon by the beneficiary and the landowner or as may be prescribed or approved by the PARC.

The petitioners also argue that in the issuance of the two measures, no effort was made to make a careful study of the sugar planters' situation. There is no tenancy problem in the sugar areas that can justify the application of the CARP to them. To the extent that the sugar planters have been lumped in the same legislation with other farmers, although they are a separate group with problems exclusively their own, their right to equal protection has been violated.

A motion for intervention was filed on August 27,1987 by the National Federation of Sugarcane Planters (NASP) which claims a membership of at least 20,000 individual sugar planters all over the country. On September 10, 1987, another motion for intervention was filed, this time by Manuel Barcelona, et al., representing coconut and riceland owners. Both motions were granted by the Court.

NASP alleges that President Aquino had no authority to fund the Agrarian Reform Program and that, in any event, the appropriation is invalid because of uncertainty in the amount appropriated. Section 2 of Proc. No. 131 and Sections 20 and 21 of E.O. No. 229 provide for an initial appropriation of fifty billion pesos and thus specifies the minimum rather than the maximum authorized amount. This is not allowed. Furthermore, the stated initial amount has not been certified to by the National Treasurer as actually available.

Two additional arguments are made by Barcelona, to wit, the failure to establish by clear and convincing evidence the necessity for the exercise of the powers of eminent domain, and the violation of the fundamental right to own property.

The petitioners also decry the penalty for non-registration of the lands, which is the expropriation of the said land for an amount equal to the government assessor's valuation of the land for tax purposes. On the other hand, if the landowner declares his own valuation he is unjustly required to immediately pay the corresponding taxes on the land, in violation of the uniformity rule.

In his consolidated Comment, the Solicitor General first invokes the presumption of constitutionality in favor of Proc. No. 131 and E.O. No. 229. He also justifies the necessity for the expropriation as explained in the "whereas" clauses of the Proclamation and submits that, contrary to the petitioner's contention, a pilot project to determine the feasibility of CARP and a general survey on the people's opinion thereon are not indispensable prerequisites to its promulgation.

On the alleged violation of the equal protection clause, the sugar planters have failed to show that they belong to a different class and should be differently treated. The Comment also suggests the possibility of Congress first distributing public agricultural lands and scheduling the expropriation of private agricultural lands later. From this viewpoint, the petition for prohibition would be premature.

The public respondent also points out that the constitutional prohibition is against the payment of public money without the corresponding appropriation. There is no rule that only money already in existence can be the subject of an appropriation law. Finally, the earmarking of fifty billion pesos as Agrarian Reform Fund, although

denominated as an initial amount, is actually the maximum sum appropriated. The word "initial" simply means that additional amounts may be appropriated later when necessary.

On April 11, 1988, Prudencio Serrano, a coconut planter, filed a petition on his own behalf, assailing the constitutionality of E.O. No. 229. In addition to the arguments already raised, Serrano contends that the measure is unconstitutional because:

(1) Only public lands should be included in the CARP;

(2) E.O. No. 229 embraces more than one subject which is not expressed in the title;

(3) The power of the President to legislate was terminated on July 2, 1987; and

(4) The appropriation of a P50 billion special fund from the National Treasury did not originate from the House of Representatives.

G.R. No. 79744

The petitioner alleges that the then Secretary of Department of Agrarian Reform, in violation of due process and the requirement for just compensation, placed his landholding under the coverage of Operation Land Transfer. Certificates of Land Transfer were subsequently issued to the private respondents, who then refused payment of lease rentals to him.

On September 3, 1986, the petitioner protested the erroneous inclusion of his small landholding under Operation Land transfer and asked for the recall and cancellation of the Certificates of Land Transfer in the name of the private respondents. He claims that on December 24, 1986, his petition was denied without hearing. On February 17, 1987, he filed a motion for reconsideration, which had not been acted upon when E.O. Nos. 228 and 229 were issued. These orders rendered his motion moot and academic because they directly effected the transfer of his land to the private respondents.

The petitioner now argues that:

(1) E.O. Nos. 228 and 229 were invalidly issued by the President of the Philippines.

(2) The said executive orders are violative of the constitutional provision that no private property shall be taken without due process or just compensation.

(3) The petitioner is denied the right of maximum retention provided for under the 1987 Constitution.

The petitioner contends that the issuance of E.0. Nos. 228 and 229 shortly before Congress convened is anomalous and arbitrary, besides violating the doctrine of separation of powers. The legislative power granted to the President under the Transitory Provisions refers only to emergency measures that may be promulgated in the proper exercise of the police power.

The petitioner also invokes his rights not to be deprived of his property without due process of law and to the retention of his small parcels of riceholding as guaranteed under Article XIII, Section 4 of the Constitution. He likewise argues that, besides denying him just compensation for his land, the provisions of E.O. No. 228 declaring that:

Lease rentals paid to the landowner by the farmer-beneficiary after October 21, 1972 shall be considered as advance payment for the land.

is an unconstitutional taking of a vested property right. It is also his contention that the inclusion of even small landowners in the program along with other landowners with lands consisting of seven hectares or more is undemocratic.

In his Comment, the Solicitor General submits that the petition is premature because the motion for reconsideration filed with the Minister of Agrarian Reform is still unresolved. As for the validity of the issuance of E.O. Nos. 228 and 229, he argues that they were enacted pursuant to Section 6, Article XVIII of the Transitory Provisions of the 1987 Constitution which reads:

The incumbent president shall continue to exercise legislative powers until the first Congress is convened.

On the issue of just compensation, his position is that when P.D. No. 27 was promulgated on October 21. 1972, the tenant-farmer of agricultural land was deemed the owner of the land he was tilling. The leasehold rentals paid after that date should therefore be considered amortization payments.

In his Reply to the public respondents, the petitioner maintains that the motion he filed was resolved on December 14, 1987. An appeal to the Office of the President would be useless with the promulgation of E.O. Nos. 228 and 229, which in effect sanctioned the validity of the public respondent's acts.

G.R. No. 78742

The petitioners in this case invoke the right of retention granted by P.D. No. 27 to owners of rice and corn lands not exceeding seven hectares as long as they are cultivating or intend to cultivate the same. Their respective lands do not exceed the statutory limit but are occupied by tenants who are actually cultivating such lands.

According to P.D. No. 316, which was promulgated in implementation of P.D. No. 27:

No tenant-farmer in agricultural lands primarily devoted to rice and corn shall be ejected or removed from his farmholding until such time as the respective rights of the tenant- farmers and the landowner shall have been determined in accordance with the rules and regulations implementing P.D. No. 27.

The petitioners claim they cannot eject their tenants and so are unable to enjoy their right of retention because the Department of Agrarian Reform has so far not issued the implementing rules required under the above-quoted decree. They therefore ask the Court for a writ of mandamus to compel the respondent to issue the said rules.

In his Comment, the public respondent argues that P.D. No. 27 has been amended by LOI 474 removing any right of retention from persons who own other agricultural lands of more than 7 hectares in aggregate area or lands used for residential, commercial, industrial or other purposes from which they derive adequate income for their family. And even assuming that the petitioners do not fall under its terms, the regulations implementing P.D. No. 27 have already been issued, to wit, the Memorandum dated July 10, 1975 (Interim Guidelines on Retention by Small Landowners, with an accompanying Retention Guide Table), Memorandum Circular No. 11 dated April 21, 1978, (Implementation Guidelines of LOI No. 474), Memorandum Circular No. 18-81 dated December 29,1981 (Clarificatory Guidelines on Coverage of P.D. No. 27 and Retention by Small Landowners), and DAR Administrative Order No. 1, series of 1985 (Providing for a Cut-off Date for Landowners to Apply for Retention and/or to Protest the Coverage of their Landholdings under Operation Land Transfer pursuant to P.D. No. 27). For failure to file the corresponding applications for retention under these measures, the petitioners are now barred from invoking this right.

The public respondent also stresses that the petitioners have prematurely initiated this case notwithstanding the pendency of their appeal to the President of the Philippines. Moreover, the issuance of the implementing rules, assuming this has not yet been done, involves the exercise of discretion which cannot be controlled through the writ of mandamus. This is especially true if this function is entrusted, as in this case, to a separate department of the government.

In their Reply, the petitioners insist that the above-cited measures are not applicable to them because they do not own more than seven hectares of agricultural land. Moreover, assuming arguendo that the rules were intended to cover them also, the said measures are nevertheless not in force because they have not been published as required by law and the ruling of this Court in Tanada v. Tuvera. 10 As for LOI 474, the same is ineffective for the additional reason that a mere letter of instruction could not have repealed the presidential decree.

I

Although holding neither purse nor sword and so regarded as the weakest of the three departments of the government, the judiciary is nonetheless vested with the power to annul the acts of either the legislative or the executive or of both when not conformable to the fundamental law. This is the reason for what some quarters call the doctrine of judicial supremacy. Even so, this power is not lightly assumed or readily exercised. The doctrine of separation of powers imposes upon the courts a proper restraint, born of the nature of their functions and of their respect for the other departments, in striking down the acts of the legislative and the executive as unconstitutional. The policy, indeed, is a blend of courtesy and caution. To doubt is to sustain. The theory is that before the act was done or the law was enacted, earnest studies were made by Congress or the President, or both, to insure that the Constitution would not be breached.

In addition, the Constitution itself lays down stringent conditions for a declaration of unconstitutionality, requiring therefor the concurrence of a majority of the members of the Supreme Court who took part in the deliberations and voted on the issue during their session en banc. 11 And as established by judge made doctrine, the Court will assume jurisdiction over a constitutional question only if it is shown that the essential requisites of a judicial inquiry into such a question are first satisfied. Thus, there must be an actual case or controversy involving a conflict of legal rights susceptible of judicial determination, the constitutional question must have been opportunely raised by the proper party, and the resolution of the question is unavoidably necessary to the decision of the case itself. 12

With particular regard to the requirement of proper party as applied in the cases before us, we hold that the same is satisfied by the petitioners and intervenors because each of them has sustained or is in danger of sustaining an immediate injury as a result of the acts or measures complained of. 13 And even if, strictly speaking, they are not covered by the definition, it is still within the wide discretion of the Court to waive the requirement and so remove the impediment to its addressing and resolving the serious constitutional questions raised.

In the first Emergency Powers Cases, 14 ordinary citizens and taxpayers were allowed to question the constitutionality of several executive orders issued by President Quirino although they were invoking only an indirect and general interest shared in common with the public. The Court dismissed the objection that they were not proper parties and ruled that "the transcendental importance to the public of these cases demands that they be settled promptly and definitely, brushing aside, if we must, technicalities of procedure." We have since then applied this exception in many other cases. 15

The other above-mentioned requisites have also been met in the present petitions.

In must be stressed that despite the inhibitions pressing upon the Court when confronted with constitutional issues like the ones now before it, it will not hesitate to declare a law or act invalid when it is convinced that this must be done. In arriving at this conclusion, its only criterion will be the Constitution as God and its conscience give

it the light to probe its meaning and discover its purpose. Personal motives and political considerations are irrelevancies that cannot influence its decision. Blandishment is as ineffectual as intimidation.

For all the awesome power of the Congress and the Executive, the Court will not hesitate to "make the hammer fall, and heavily," to use Justice Laurel's pithy language, where the acts of these departments, or of any public official, betray the people's will as expressed in the Constitution.

It need only be added, to borrow again the words of Justice Laurel, that —

... when the judiciary mediates to allocate constitutional boundaries, it does not assert any superiority over the other departments; it does not in reality nullify or invalidate an act of the Legislature, but only asserts the solemn and sacred obligation assigned to it by the Constitution to determine conflicting claims of authority under the Constitution and to establish for the parties in an actual controversy the rights which that instrument secures and guarantees to them. This is in truth all that is involved in what is termed "judicial supremacy" which properly is the power of judicial review under the Constitution. 16

The cases before us categorically raise constitutional questions that this Court must categorically resolve. And so we shall.

II

We proceed first to the examination of the preliminary issues before resolving the more serious challenges to the constitutionality of the several measures involved in these petitions.

The promulgation of P.D. No. 27 by President Marcos in the exercise of his powers under martial law has already been sustained in Gonzales v. Estrella and we find no reason to modify or reverse it on that issue. As for the power of President Aquino to promulgate Proc. No. 131 and E.O. Nos. 228 and 229, the same was authorized under Section 6 of the Transitory Provisions of the 1987 Constitution, quoted above.

The said measures were issued by President Aquino before July 27, 1987, when the Congress of the Philippines was formally convened and took over legislative power from her. They are not "midnight" enactments intended to pre-empt the legislature because E.O. No. 228 was issued on July 17, 1987, and the other measures, i.e., Proc. No. 131 and E.O. No. 229, were both issued on July 22, 1987. Neither is it correct to say that these measures ceased to be valid when she lost her legislative power for, like any statute, they continue to be in force unless modified or repealed by subsequent law or declared invalid by the courts. A statute does not ipso facto become inoperative simply because of the dissolution of the legislature that enacted it. By the same token, President Aquino's loss of legislative power did not have the effect of invalidating all the measures enacted by her when and as long as she possessed it.

Significantly, the Congress she is alleged to have undercut has not rejected but in fact substantially affirmed the challenged measures and has specifically provided that they shall be suppletory to R.A. No. 6657 whenever not inconsistent with its provisions. 17 Indeed, some portions of the said measures, like the creation of the P50 billion fund in Section 2 of Proc. No. 131, and Sections 20 and 21 of E.O. No. 229, have been incorporated by reference in the CARP Law. 18

That fund, as earlier noted, is itself being questioned on the ground that it does not conform to the requirements of a valid appropriation as specified in the Constitution. Clearly, however, Proc. No. 131 is not an appropriation measure even if it does provide for the creation of said fund, for that is not its principal purpose. An appropriation law is one the primary and specific purpose of which is to authorize the release of public funds from the

treasury.19 The creation of the fund is only incidental to the main objective of the proclamation, which is agrarian reform.

It should follow that the specific constitutional provisions invoked, to wit, Section 24 and Section 25(4) of Article VI, are not applicable. With particular reference to Section 24, this obviously could not have been complied with for the simple reason that the House of Representatives, which now has the exclusive power to initiate appropriation measures, had not yet been convened when the proclamation was issued. The legislative power was then solely vested in the President of the Philippines, who embodied, as it were, both houses of Congress.

The argument of some of the petitioners that Proc. No. 131 and E.O. No. 229 should be invalidated because they do not provide for retention limits as required by Article XIII, Section 4 of the Constitution is no longer tenable. R.A. No. 6657 does provide for such limits now in Section 6 of the law, which in fact is one of its most controversial provisions. This section declares:

Retention Limits. — Except as otherwise provided in this Act, no person may own or retain, directly or indirectly, any public or private agricultural land, the size of which shall vary according to factors governing a viable family-sized farm, such as commodity produced, terrain, infrastructure, and soil fertility as determined by the Presidential Agrarian Reform Council (PARC) created hereunder, but in no case shall retention by the landowner exceed five (5) hectares. Three (3) hectares may be awarded to each child of the landowner, subject to the following qualifications: (1) that he is at least fifteen (15) years of age; and (2) that he is actually tilling the land or directly managing the farm; Provided, That landowners whose lands have been covered by Presidential Decree No. 27 shall be allowed to keep the area originally retained by them thereunder, 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 argument that E.O. No. 229 violates the constitutional requirement that a bill shall have only one subject, to be expressed in its title, deserves only short attention. It is settled that the title of the bill does not have to be a catalogue of its contents and will suffice if the matters embodied in the text are relevant to each other and may be inferred from the title. 20

The Court wryly observes that during the past dictatorship, every presidential issuance, by whatever name it was called, had the force and effect of law because it came from President Marcos. Such are the ways of despots. Hence, it is futile to argue, as the petitioners do in G.R. No. 79744, that LOI 474 could not have repealed P.D. No. 27 because the former was only a letter of instruction. The important thing is that it was issued by President Marcos, whose word was law during that time.

But for all their peremptoriness, these issuances from the President Marcos still had to comply with the requirement for publication as this Court held in Tanada v. Tuvera. 21 Hence, unless published in the Official Gazette in accordance with Article 2 of the Civil Code, they could not have any force and effect if they were among those enactments successfully challenged in that case. LOI 474 was published, though, in the Official Gazette dated November 29,1976.)

Finally, there is the contention of the public respondent in G.R. No. 78742 that the writ of mandamus cannot issue to compel the performance of a discretionary act, especially by a specific department of the government. That is true as a general proposition but is subject to one important qualification. Correctly and categorically stated, the rule is that mandamus will lie to compel the discharge of the discretionary duty itself but not to control the discretion to be exercised. In other words, mandamus can issue to require action only but not specific action.

Whenever a duty is imposed upon a public official and an unnecessary and unreasonable delay in the exercise of such duty occurs, if it is a clear duty imposed by law, the courts will intervene by the extraordinary legal remedy of mandamus to compel action. If the duty is purely ministerial, the courts will require specific action. If the duty is purely discretionary, the courts by mandamus will require action only. For example, if an inferior court, public official, or board should, for an unreasonable length of time, fail to decide a particular question to the great detriment of all parties concerned, or a court should refuse to take jurisdiction of a cause when the law clearly gave it jurisdiction mandamus will issue, in the first case to require a decision, and in the second to require that jurisdiction be taken of the cause. 22

And while it is true that as a rule the writ will not be proper as long as there is still a plain, speedy and adequate remedy available from the administrative authorities, resort to the courts may still be permitted if the issue raised is a question of law. 23

III

There are traditional distinctions between the police power and the power of eminent domain that logically preclude the application of both powers at the same time on the same subject. In the case of City of Baguio v. NAWASA, 24 for example, where a law required the transfer of all municipal waterworks systems to the NAWASA in exchange for its assets of equivalent value, the Court held that the power being exercised was eminent domain because the property involved was wholesome and intended for a public use. Property condemned under the police power is noxious or intended for a noxious purpose, such as a building on the verge of collapse, which should be demolished for the public safety, or obscene materials, which should be destroyed in the interest of public morals. The confiscation of such property is not compensable, unlike the taking of property under the power of expropriation, which requires the payment of just compensation to the owner.

In the case of Pennsylvania Coal Co. v. Mahon, 25 Justice Holmes laid down the limits of the police power in a famous aphorism: "The general rule at least is that while property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking." The regulation that went "too far" was a law prohibiting mining which might cause the subsidence of structures for human habitation constructed on the land surface. This was resisted by a coal company which had earlier granted a deed to the land over its mine but reserved all mining rights thereunder, with the grantee assuming all risks and waiving any damage claim. The Court held the law could not be sustained without compensating the grantor. Justice Brandeis filed a lone dissent in which he argued that there was a valid exercise of the police power. He said:

Every restriction upon the use of property imposed in the exercise of the police power deprives the owner of some right theretofore enjoyed, and is, in that sense, an abridgment by the State of rights in property without making compensation. But restriction imposed to protect the public health, safety or morals from dangers threatened is not a taking. The restriction here in question is merely the prohibition of a noxious use. The property so restricted remains in the possession of its owner. The state does not appropriate it or make any use of it. The state merely prevents the owner from making a use which interferes with paramount rights of the public. Whenever the use prohibited ceases to be noxious — as it may because of further changes in local or social conditions — the restriction will have to be removed and the owner will again be free to enjoy his property as heretofore.

Recent trends, however, would indicate not a polarization but a mingling of the police power and the power of eminent domain, with the latter being used as an implement of the former like the power of taxation. The employment of the taxing power to achieve a police purpose has long been accepted. 26 As for the power of expropriation, Prof. John J. Costonis of the University of Illinois College of Law (referring to the earlier case of Euclid v. Ambler Realty Co., 272 US 365, which sustained a zoning law under the police power) makes the following significant remarks:

Euclid, moreover, was decided in an era when judges located the Police and eminent domain powers on different planets. Generally speaking, they viewed eminent domain as encompassing public acquisition of private property for improvements that would be available for public use," literally construed. To the police power, on the other hand, they assigned the less intrusive task of preventing harmful externalities a point reflected in the Euclid opinion's reliance on an analogy to nuisance law to bolster its support of zoning. So long as suppression of a privately authored harm bore a plausible relation to some legitimate "public purpose," the pertinent measure need have afforded no compensation whatever. With the progressive growth of government's involvement in land use, the distance between the two powers has contracted considerably. Today government often employs eminent domain interchangeably with or as a useful complement to the police power-- a trend expressly approved in the Supreme Court's 1954 decision in Berman v. Parker, which broadened the reach of eminent domain's "public use" test to match that of the police power's standard of "public purpose." 27

The Berman case sustained a redevelopment project and the improvement of blighted areas in the District of Columbia as a proper exercise of the police power. On the role of eminent domain in the attainment of this purpose, Justice Douglas declared:

If those who govern the District of Columbia decide that the Nation's Capital should be beautiful as well as sanitary, there is nothing in the Fifth Amendment that stands in the way.

Once the object is within the authority of Congress, the right to realize it through the exercise of eminent domain is clear.

For the power of eminent domain is merely the means to the end. 28

In Penn Central Transportation Co. v. New York City, 29 decided by a 6-3 vote in 1978, the U.S Supreme Court sustained the respondent's Landmarks Preservation Law under which the owners of the Grand Central Terminal had not been allowed to construct a multi-story office building over the Terminal, which had been designated a historic landmark. Preservation of the landmark was held to be a valid objective of the police power. The problem, however, was that the owners of the Terminal would be deprived of the right to use the airspace above it although other landowners in the area could do so over their respective properties. While insisting that there was here no taking, the Court nonetheless recognized certain compensatory rights accruing to Grand Central Terminal which it said would "undoubtedly mitigate" the loss caused by the regulation. This "fair compensation," as he called it, was explained by Prof. Costonis in this wise:

In return for retaining the Terminal site in its pristine landmark status, Penn Central was authorized to transfer to neighboring properties the authorized but unused rights accruing to the site prior to the Terminal's designation as a landmark — the rights which would have been exhausted by the 59-story building that the city refused to countenance atop the Terminal. Prevailing bulk restrictions on neighboring sites were proportionately relaxed, theoretically enabling Penn Central to recoup its losses at the Terminal site by constructing or selling to others the right to construct larger, hence more profitable buildings on the transferee sites. 30

The cases before us present no knotty complication insofar as the question of compensable taking is concerned. To the extent that the measures under challenge merely prescribe retention limits for landowners, there is an exercise of the police power for the regulation of private property in accordance with the Constitution. But where, to carry out such regulation, it becomes necessary to deprive such owners of whatever lands they may own in excess of the maximum area allowed, there is definitely a taking under the power of eminent domain for which payment of just compensation is imperative. The taking contemplated is not a mere limitation of the use of the land. What is required is the surrender of the title to and the physical possession of the said excess and all beneficial rights accruing to the owner in favor of the farmer-beneficiary. This is definitely an exercise not of the police power but of the power of eminent domain.

Whether as an exercise of the police power or of the power of eminent domain, the several measures before us are challenged as violative of the due process and equal protection clauses.

The challenge to Proc. No. 131 and E.O. Nos. 228 and 299 on the ground that no retention limits are prescribed has already been discussed and dismissed. It is noted that although they excited many bitter exchanges during the deliberation of the CARP Law in Congress, the retention limits finally agreed upon are, curiously enough, not being questioned in these petitions. We therefore do not discuss them here. The Court will come to the other claimed violations of due process in connection with our examination of the adequacy of just compensation as required under the power of expropriation.

The argument of the small farmers that they have been denied equal protection because of the absence of retention limits has also become academic under Section 6 of R.A. No. 6657. Significantly, they too have not questioned the area of such limits. There is also the complaint that they should not be made to share the burden of agrarian reform, an objection also made by the sugar planters on the ground that they belong to a particular class with particular interests of their own. However, no evidence has been submitted to the Court that the requisites of a valid classification have been violated.

Classification has been defined as the grouping of persons or things similar to each other in certain particulars and different from each other in these same particulars. 31 To be valid, it must conform to the following requirements: (1) it must be based on substantial distinctions; (2) it must be germane to the purposes of the law; (3) it must not be limited to existing conditions only; and (4) it must apply equally to all the members of the class. 32The Court finds that all these requisites have been met by the measures here challenged as arbitrary and discriminatory.

Equal protection simply means that all persons or things similarly situated must be treated alike both as to the rights conferred and the liabilities imposed. 33 The petitioners have not shown that they belong to a different class and entitled to a different treatment. The argument that not only landowners but also owners of other properties must be made to share the burden of implementing land reform must be rejected. There is a substantial distinction between these two classes of owners that is clearly visible except to those who will not see. There is no need to elaborate on this matter. In any event, the Congress is allowed a wide leeway in providing for a valid classification. Its decision is accorded recognition and respect by the courts of justice except only where its discretion is abused to the detriment of the Bill of Rights.

It is worth remarking at this juncture that a statute may be sustained under the police power only if there is a concurrence of the lawful subject and the lawful method. Put otherwise, the interests of the public generally as distinguished from those of a particular class require the interference of the State and, no less important, the means employed are reasonably necessary for the attainment of the purpose sought to be achieved and not unduly oppressive upon individuals. 34 As the subject and purpose of agrarian reform have been laid down by the Constitution itself, we may say that the first requirement has been satisfied. What remains to be examined is the validity of the method employed to achieve the constitutional goal.

One of the basic principles of the democratic system is that where the rights of the individual are concerned, the end does not justify the means. It is not enough that there be a valid objective; it is also necessary that the means employed to pursue it be in keeping with the Constitution. Mere expediency will not excuse constitutional shortcuts. There is no question that not even the strongest moral conviction or the most urgent public need, subject only to a few notable exceptions, will excuse the bypassing of an individual's rights. It is no exaggeration to say that a, person invoking a right guaranteed under Article III of the Constitution is a majority of one even as against the rest of the nation who would deny him that right.

That right covers the person's life, his liberty and his property under Section 1 of Article III of the Constitution. With regard to his property, the owner enjoys the added protection of Section 9, which reaffirms the familiar rule that private property shall not be taken for public use without just compensation.

This brings us now to the power of eminent domain.

IV

Eminent domain is an inherent power of the State that enables it to forcibly acquire private lands intended for public use upon payment of just compensation to the owner. Obviously, there is no need to expropriate where the owner is willing to sell under terms also acceptable to the purchaser, in which case an ordinary deed of sale may be agreed upon by the parties. 35 It is only where the owner is unwilling to sell, or cannot accept the price or other conditions offered by the vendee, that the power of eminent domain will come into play to assert the paramount authority of the State over the interests of the property owner. Private rights must then yield to the irresistible demands of the public interest on the time-honored justification, as in the case of the police power, that the welfare of the people is the supreme law.

But for all its primacy and urgency, the power of expropriation is by no means absolute (as indeed no power is absolute). The limitation is found in the constitutional injunction that "private property shall not be taken for public use without just compensation" and in the abundant jurisprudence that has evolved from the interpretation of this principle. Basically, the requirements for a proper exercise of the power are: (1) public use and (2) just compensation.

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

A becoming courtesy admonishes us to respect the decisions of the political departments when they decide what is known as the political question. As explained by Chief Justice Concepcion in the case of Tañada v. Cuenco: 36

The term "political question" connotes what it means in ordinary parlance, namely, a question of policy. It refers to "those questions which, under the Constitution, are to be decided by the people in their sovereign capacity; or in regard to which full discretionary authority has been delegated to the legislative or executive branch of the government." It is concerned with issues dependent upon the wisdom, not legality, of a particular measure.

It is true that the concept of the political question has been constricted with the enlargement of judicial power, which now includes the authority of the courts "to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government." 37 Even so, this should not be construed as a license for us to reverse the other departments simply because their views may not coincide with ours.

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

In U.S. v. Chandler-Dunbar Water Power Company, 38 it was held:

Congress having determined, as it did by the Act of March 3,1909 that the entire St. Mary's river between the American bank and the international line, as well as all of the upland north of the present ship canal, throughout its entire length, was "necessary for the purpose of navigation of said waters, and the waters connected therewith," that determination is conclusive in condemnation proceedings instituted by the United States under that Act, and there is no room for judicial review of the judgment of Congress ... .

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

The second requirement, i.e., the payment of just compensation, needs a longer and more thoughtful examination.

Just compensation is defined as the full and fair equivalent of the property taken from its owner by the expropriator. 39 It has been repeatedly stressed by this Court that the measure is not the taker's gain but the owner's loss. 40 The word "just" is used to intensify the meaning of the word "compensation" to convey the idea that the equivalent to be rendered for the property to be taken shall be real, substantial, full, ample. 41

It bears repeating that the measures challenged in these petitions contemplate more than a mere regulation of the use of private lands under the police power. We deal here with an actual taking of private agricultural lands that has dispossessed the owners of their property and deprived them of all its beneficial use and enjoyment, to entitle them to the just compensation mandated by the Constitution.

As held in Republic of the Philippines v. Castellvi, 42 there is compensable taking when the following conditions concur: (1) the expropriator must enter a private property; (2) the entry must be for more than a momentary period; (3) the entry must be under warrant or color of legal authority; (4) the property must be devoted to public use or otherwise informally appropriated or injuriously affected; and (5) the utilization of the property for public use must be in such a way as to oust the owner and deprive him of beneficial enjoyment of the property. All these requisites are envisioned in the measures before us.

Where the State itself is the expropriator, it is not necessary for it to make a deposit upon 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." 43 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.

Objection is raised, however, to the manner of fixing the just compensation, which it is claimed is entrusted to the administrative authorities in violation of judicial prerogatives. Specific reference is made to Section 16(d), which provides that in case of the rejection or disregard by the owner of the offer of the government to buy his land-

... 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.

To be sure, the determination of just compensation is a function addressed to the courts of justice and may not be usurped by any other branch or official of the government. EPZA v. Dulay 44 resolved a challenge to several decrees promulgated by President Marcos providing that the just compensation for property under expropriation should be either the assessment of the property by the government or the sworn valuation thereof by the owner, whichever was lower. In declaring these decrees unconstitutional, the Court held through Mr. Justice Hugo E. Gutierrez, Jr.:

The method of ascertaining just compensation under the aforecited decrees constitutes impermissible encroachment on judicial prerogatives. It tends to render this Court inutile in a matter which under this Constitution is reserved to it for final determination.

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

x x x

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.

x x x

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

A reading of the aforecited Section 16(d) will readily show that it does not suffer from the arbitrariness that rendered the challenged decrees constitutionally objectionable. Although the proceedings are described as

summary, the landowner and other interested parties are nevertheless allowed an opportunity to submit evidence on the real value of the property. But more importantly, the determination of the just compensation by the DAR is not by any means final and conclusive upon the landowner or any other interested party, for Section 16(f) clearly provides:

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

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

The second and more serious objection to the provisions on just compensation is not as easily resolved.

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

SEC. 18. Valuation and Mode of Compensation. — The LBP shall compensate the landowner in such amount as may be agreed upon by the landowner and the DAR and the LBP, in accordance with the criteria provided for in Sections 16 and 17, and other pertinent provisions hereof, or as may be finally determined by the court, as the just compensation for the land.

The compensation shall be paid in one of the following modes, at the option of the landowner:

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

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

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

(c) For lands twenty-four (24) hectares and below — Thirty-five percent (35%) cash, the balance to be paid in government financial instruments negotiable at any time.

(2) Shares of stock in government-owned or controlled corporations, LBP preferred shares, physical assets or other qualified investments in accordance with guidelines set by the PARC;

(3) Tax credits which can be used against any tax liability;

(4) LBP bonds, which shall have the following features:

(a) Market interest rates aligned with 91-day treasury bill rates. Ten percent (10%) of the face value of the bonds shall mature every year from the date of issuance until the tenth (10th) year: Provided, That should the landowner choose to

forego the cash portion, whether in full or in part, he shall be paid correspondingly in LBP bonds;

(b) Transferability and negotiability. Such LBP bonds may be used by the landowner, his successors-in- interest or his assigns, up to the amount of their face value, for any of the following:

(i) Acquisition of land or other real properties of the government, including assets under the Asset Privatization Program and other assets foreclosed by government financial institutions in the same province or region where the lands for which the bonds were paid are situated;

(ii) Acquisition of shares of stock of government-owned or controlled corporations or shares of stock owned by the government in private corporations;

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

(iv) Security for loans with any government financial institution, provided the proceeds of the loans shall be invested in an economic enterprise, preferably in a small and medium- scale industry, in the same province or region as the land for which the bonds are paid;

(v) Payment for various taxes and fees to government: Provided, That the use of these bonds for these purposes will be limited to a certain percentage of the outstanding balance of the financial instruments; Provided, further, That the PARC shall determine the percentages mentioned above;

(vi) Payment for tuition fees of the immediate family of the original bondholder in government universities, colleges, trade schools, and other institutions;

(vii) Payment for fees of the immediate family of the original bondholder in government hospitals; and

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

The contention of the petitioners in G.R. No. 79777 is that the above provision is unconstitutional insofar as it requires the owners of the expropriated properties to accept just compensation therefor in less than money, which is the only medium of payment allowed. In support of this contention, they cite jurisprudence holding that:

The fundamental rule in expropriation matters is that the owner of the property expropriated is entitled to a just compensation, which should be neither more nor less, whenever it is possible to make the assessment, than the money equivalent of said property. Just compensation has always

been understood to be the just and complete equivalent of the loss which the owner of the thing expropriated has to suffer by reason of the expropriation . 45 (Emphasis supplied.)

In J.M. Tuazon Co. v. Land Tenure Administration, 46 this Court held:

It is well-settled that just compensation means the equivalent for the value of the property at the time of its taking. Anything beyond that is more, and anything short of that is less, than just compensation. It means a fair and full equivalent for the loss sustained, which is the measure of the indemnity, not whatever gain would accrue to the expropriating entity. The market value of the land taken is the just compensation to which the owner of condemned property is entitled, the market value being that sum of money which a person desirous, but not compelled to buy, and an owner, willing, but not compelled to sell, would agree on as a price to be given and received for such property. (Emphasis supplied.)

In the United States, where much of our jurisprudence on the subject has been derived, the weight of authority is also to the effect that just compensation for property expropriated is payable only in money and not otherwise. Thus —

The medium of payment of compensation is ready money or cash. The condemnor cannot compel the owner to accept anything but money, nor can the owner compel or require the condemnor to pay him on any other basis than the value of the property in money at the time and in the manner prescribed by the Constitution and the statutes. When the power of eminent domain is resorted to, there must be a standard medium of payment, binding upon both parties, and the law has fixed that standard as money in cash. 47 (Emphasis supplied.)

Part cash and deferred payments are not and cannot, in the nature of things, be regarded as a reliable and constant standard of compensation. 48

"Just compensation" for property taken by condemnation means a fair equivalent in money, which must be paid at least within a reasonable time after the taking, and it is not within the power of the Legislature to substitute for such payment future obligations, bonds, or other valuable advantage. 49 (Emphasis supplied.)

It cannot be denied from these cases that the traditional medium for the payment of just compensation is money and no other. And so, conformably, has just compensation been paid in the past solely in that medium. However, we do not deal here with the traditional excercise of the power of eminent domain. This is not an ordinary expropriation where only a specific property of relatively limited area is sought to be taken by the State from its owner for a specific and perhaps local purpose.

What we deal with here is a revolutionary kind of expropriation.

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

just distribution" among the farmers of lands that have heretofore been the prison of their dreams but can now become the key at least to their deliverance.

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

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

The Court has not found in the records of the Constitutional Commission any categorical agreement among the members regarding the meaning to be given the concept of just compensation as applied to the comprehensive agrarian reform program being contemplated. There was the suggestion to "fine tune" the requirement to suit the demands of the project even as it was also felt that they should "leave it to Congress" to determine how payment should be made to the landowner and reimbursement required from the farmer-beneficiaries. Such innovations as "progressive compensation" and "State-subsidized compensation" were also proposed. In the end, however, no special definition of the just compensation for the lands to be expropriated was reached by the Commission. 50

On the other hand, there is nothing in the records either that militates against the assumptions we are making of the general sentiments and intention of the members on the content and manner of the payment to be made to the landowner in the light of the magnitude of the expenditure and the limitations of the expropriator.

With these assumptions, the Court hereby declares that the content and manner of the just compensation provided for in the afore- quoted Section 18 of the CARP Law is not violative of the Constitution. We do not mind admitting that a certain degree of pragmatism has influenced our decision on this issue, but after all this Court is not a cloistered institution removed from the realities and demands of society or oblivious to the need for its enhancement. The Court is as acutely anxious as the rest of our people to see the goal of agrarian reform achieved at last after the frustrations and deprivations of our peasant masses during all these disappointing decades. We are aware that invalidation of the said section will result in the nullification of the entire program, killing the farmer's hopes even as they approach realization and resurrecting the spectre of discontent and dissent in the restless countryside. That is not in our view the intention of the Constitution, and that is not what we shall decree today.

Accepting the theory that payment of the just compensation is not always required to be made fully in money, we find further that the proportion of cash payment to the other things of value constituting the total payment, as determined on the basis of the areas of the lands expropriated, is not unduly oppressive upon the landowner. It is noted that the smaller the land, the bigger the payment in money, primarily because the small landowner will be needing it more than the big landowners, who can afford a bigger balance in bonds and other things of value. No less importantly, the government financial instruments making up the balance of the payment are "negotiable at any time." The other modes, which are likewise available to the landowner at his option, are also not unreasonable because payment is made in shares of stock, LBP bonds, other properties or assets, tax credits, and other things of value equivalent to the amount of just compensation.

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

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

The last major challenge to CARP is that the landowner is divested of his property even before actual payment to him in full of just compensation, in contravention of a well- accepted principle of eminent domain.

The recognized rule, indeed, is that title to the property expropriated shall pass from the owner to the expropriator only upon full payment of the just compensation. Jurisprudence on this settled principle is consistent both here and in other democratic jurisdictions. Thus:

Title to property which is the subject of condemnation proceedings does not vest the condemnor until the judgment fixing just compensation is entered and paid, but the condemnor's title relates back to the date on which the petition under the Eminent Domain Act, or the commissioner's report under the Local Improvement Act, is filed.51

... although the right to appropriate and use land taken for a canal is complete at the time of entry, title to the property taken remains in the owner until payment is actually made. 52 (Emphasis supplied.)

In Kennedy v. Indianapolis, 53 the US Supreme Court cited several cases holding that title to property does not pass to the condemnor until just compensation had actually been made. In fact, the decisions appear to be uniformly to this effect. As early as 1838, in Rubottom v. McLure, 54 it was held that "actual payment to the owner of the condemned property was a condition precedent to the investment of the title to the property in the State" albeit "not to the appropriation of it to public use." In Rexford v. Knight, 55 the Court of Appeals of New York said that the construction upon the statutes was that the fee did not vest in the State until the payment of the compensation although the authority to enter upon and appropriate the land was complete prior to the payment. Kennedy further said that "both on principle and authority the rule is ... that the right to enter on and use the property is complete, as soon as the property is actually appropriated under the authority of law for a public use,but that the title does not pass from the owner without his consent, until just compensation has been made to him."

Our own Supreme Court has held in Visayan Refining Co. v. Camus and Paredes, 56 that:

If the laws which we have exhibited or cited in the preceding discussion are attentively examined it will be apparent that the method of expropriation adopted in this jurisdiction is such as to afford absolute reassurance that no piece of land can be finally and irrevocably taken from an unwilling owner until compensation is paid ... . (Emphasis supplied.)

It is true that P.D. No. 27 expressly ordered the emancipation of tenant-farmer as October 21, 1972 and declared that he shall "be deemed the owner" of a portion of land consisting of a family-sized farm except that "no title to the land owned by him was to be actually issued to him unless and until he had become a full-fledged member of a duly recognized farmers' cooperative." It was understood, however, that full payment of the just compensation also had to be made first, conformably to the constitutional requirement.

When E.O. No. 228, categorically stated in its Section 1 that:

All qualified farmer-beneficiaries are now deemed full owners as of October 21, 1972 of the land they acquired by virtue of Presidential Decree No. 27. (Emphasis supplied.)

it was obviously referring to lands already validly acquired under the said decree, after proof of full-fledged membership in the farmers' cooperatives and full payment of just compensation. Hence, it was also perfectly proper for the Order to also provide in its Section 2 that the "lease rentals paid to the landowner by the farmer- beneficiary after October 21, 1972 (pending transfer of ownership after full payment of just compensation), shall be considered as advance payment for the land."

The CARP Law, for its part, conditions the transfer of possession and ownership of the land to the government on receipt by the landowner of the corresponding payment or the deposit by the DAR of the compensation in cash or LBP bonds with an accessible bank. Until then, title also remains with the landowner. 57 No outright change of ownership is contemplated either.

Hence, the argument that the assailed measures violate due process by arbitrarily transferring title before the land is fully paid for must also be rejected.

It is worth stressing at this point that all rights acquired by the tenant-farmer under P.D. No. 27, as recognized under E.O. No. 228, are retained by him even now under R.A. No. 6657. This should counter-balance the express provision in Section 6 of the said law that "the landowners whose lands have been covered by Presidential Decree No. 27 shall be allowed to keep the area originally retained by them thereunder, further, That original homestead grantees or direct compulsory heirs who still own the original homestead at the time of the approval of this Act shall retain the same areas as long as they continue to cultivate said homestead."

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

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

V

The CARP Law and the other enactments also involved in these cases have been the subject of bitter attack from those who point to the shortcomings of these measures and ask that they be scrapped entirely. To be sure, these enactments are less than perfect; indeed, they should be continuously re-examined and rehoned, that they may be sharper instruments for the better protection of the farmer's rights. But we have to start somewhere. In the pursuit of agrarian reform, we do not tread on familiar ground but grope on terrain fraught with pitfalls and expected difficulties. This is inevitable. The CARP Law is not a tried and tested project. On the contrary, to use Justice Holmes's words, "it is an experiment, as all life is an experiment," and so we learn as we venture forward, and, if necessary, by our own mistakes. We cannot expect perfection although we should strive for it by all means. Meantime, we struggle as best we can in freeing the farmer from the iron shackles that have unconscionably, and for so long, fettered his soul to the soil.

By the decision we reach today, all major legal obstacles to the comprehensive agrarian reform program are removed, to clear the way for the true freedom of the farmer. We may now glimpse the day he will be released not only from want but also from the exploitation and disdain of the past and from his own feelings of inadequacy and helplessness. At last his servitude will be ended forever. At last the farm on which he toils will be his farm. It will be his portion of the Mother Earth that will give him not only the staff of life but also the joy of living. And where once it bred for him only deep despair, now can he see in it the fruition of his hopes for a more fulfilling future. Now at last can he banish from his small plot of earth his insecurities and dark resentments and "rebuild in it the music and the dream."

WHEREFORE, the Court holds as follows:

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

2. Title to all expropriated properties shall be transferred to the State only upon full payment of compensation to their respective owners.

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

4. Landowners who were unable to exercise their rights of retention under P.D. No. 27 shall enjoy the retention rights granted by R.A. No. 6657 under the conditions therein prescribed.

5. Subject to the above-mentioned rulings all the petitions are DISMISSED, without pronouncement as to costs.

SO ORDERED.

Republic of the PhilippinesSUPREME COURT

Manila

FIRST DIVISION

G.R. No. 158314 June 3, 2004

SAMAHAN NG MAGSASAKA SA SAN JOSEP, represented by DOMINADOR MAGLALANG, petitioner, vs.MARIETTA VALISNO, ADELA, AQUILES, LEANDRO, HONORIO, LUMEN, NICOLAS, all surnamed VALISNO; RANDY V. WAGNER, MARIA MARTA B. VALISNO, NOELITO VALISNO, MARY ANN L. VALISNO, PHILIP V. BRANZUELA and BRENDON V. YUJUICO; MA. CRISTINA VALISNO, BENEDICTO V. YUJUICO, GREGORIO V. YUJUICO and LEONORA V. YUJUICO, respondents.

D E C I S I O N

YNARES-SANTIAGO, J.:

The sole issue in this petition for review on certiorari is 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").

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;

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.

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.

SO ORDERED.

B. EXEMPTIONS:

Republic of the PhilippinesSUPREME COURT

EN BANC

G.R. No. 162070 October 19, 2005

DEPARTMENT OF AGRARIAN REFORM, represented by SECRETARY JOSE MARI B. PONCE (OIC),Petitioner vs.DELIA T. SUTTON, ELLA T. SUTTON-SOLIMAN and HARRY T. SUTTON, Respondents.

D E C I S I O N

PUNO, J.:

This is a petition for review filed by the Department of Agrarian Reform (DAR) of the Decision and Resolution of the Court of Appeals, dated September 19, 2003 and February 4, 2004, respectively, which declared DAR Administrative Order (A.O.) No. 9, series of 1993, null and void for being violative of the Constitution.

The case at bar involves a land in Aroroy, Masbate, inherited by respondents which has been devoted exclusively to cow and calf breeding. On October 26, 1987, pursuant to the then existing agrarian reform program of the government, respondents made a voluntary offer to sell (VOS)1 their landholdings to petitioner DAR to avail of certain incentives under the law.

On June 10, 1988, a new agrarian law, Republic Act (R.A.) No. 6657, also known as the Comprehensive Agrarian Reform Law (CARL) of 1988, took effect. It included in its coverage farms used for raising livestock, poultry and swine.

On December 4, 1990, in an en banc decision in the case of Luz Farms v. Secretary of DAR,2 this Court ruled that lands devoted to livestock and poultry-raising are not included in the definition of agricultural land. Hence, we declared as unconstitutional certain provisions of the CARL insofar as they included livestock farms in the coverage of agrarian reform.

In view of the Luz Farms ruling, respondents filed with petitioner DAR a formal request to withdraw their VOS as their landholding was devoted exclusively to cattle-raising and thus exempted from the coverage of the CARL.3

On December 21, 1992, the Municipal Agrarian Reform Officer of Aroroy, Masbate, inspected respondents’ land and found that it was devoted solely to cattle-raising and breeding. He recommended to the DAR Secretary that it be exempted from the coverage of the CARL.

On April 27, 1993, respondents reiterated to petitioner DAR the withdrawal of their VOS and requested the return of the supporting papers they submitted in connection therewith.4 Petitioner ignored their request.

On December 27, 1993, DAR issued A.O. No. 9, series of 1993,5 which provided that only portions of private agricultural lands used for the raising of livestock, poultry and swine as of June 15, 1988 shall be excluded from the coverage of the CARL. In determining the area of land to be excluded, the A.O. fixed the following retention limits, viz: 1:1 animal-land ratio (i.e., 1 hectare of land per 1 head of animal shall be retained by the landowner), and a ratio of 1.7815 hectares for livestock infrastructure for every 21 heads of cattle shall likewise be excluded from the operations of the CARL.

On February 4, 1994, respondents wrote the DAR Secretary and advised him to consider as final and irrevocable the withdrawal of their VOS as, under the Luz Farms doctrine, their entire landholding is exempted from the CARL.6

On September 14, 1995, then DAR Secretary Ernesto D. Garilao issued an Order7 partially granting the application of respondents for exemption from the coverage of CARL. Applying the retention limits outlined in the DAR A.O. No. 9, petitioner exempted 1,209 hectares of respondents’ land for grazing purposes, and a maximum of 102.5635 hectares for infrastructure. Petitioner ordered the rest of respondents’ landholding to be segregated and placed under Compulsory Acquisition.

Respondents moved for reconsideration. They contend that their entire landholding should be exempted as it is devoted exclusively to cattle-raising. Their motion was denied.8 They filed a notice of appeal9 with the Office of the President assailing: (1) the reasonableness and validity of DAR A.O. No. 9, s. 1993, which provided for a ratio between land and livestock in determining the land area qualified for exclusion from the CARL, and (2) the constitutionality of DAR A.O. No. 9, s. 1993, in view of the Luz Farms case which declared cattle-raising lands excluded from the coverage of agrarian reform.

On October 9, 2001, the Office of the President affirmed the impugned Order of petitioner DAR.10 It ruled that DAR A.O. No. 9, s. 1993, does not run counter to the Luz Farms case as the A.O. provided the guidelines to determine whether a certain parcel of land is being used for cattle-raising. However, the issue on the constitutionality of the assailed A.O. was left for the determination of the courts as the sole arbiters of such issue.

On appeal, the Court of Appeals ruled in favor of the respondents. It declared DAR A.O. No. 9, s. 1993, void for being contrary to the intent of the 1987 Constitutional Commission to exclude livestock farms from the land reform program of the government. The dispositive portion reads:

WHEREFORE, premises considered, DAR Administrative Order No. 09, Series of 1993 is hereby DECLARED null and void. The assailed order of the Office of the President dated 09 October 2001 in so far as it affirmed the Department of Agrarian Reform’s ruling that petitioners’ landholding is covered by the agrarian reform program of the government is REVERSED and SET ASIDE.

SO ORDERED.11

Hence, this petition.

The main issue in the case at bar is the constitutionality of DAR A.O. No. 9, series of 1993, which prescribes a maximum retention limit for owners of lands devoted to livestock raising.

Invoking its rule-making power under Section 49 of the CARL, petitioner submits that it issued DAR A.O. No. 9 to limit the area of livestock farm that may be retained by a landowner pursuant to its mandate to place all public and private agricultural lands under the coverage of agrarian reform. Petitioner also contends that the A.O. seeks to

remedy reports that some unscrupulous landowners have converted their agricultural farms to livestock farms in order to evade their coverage in the agrarian reform program.

Petitioner’s arguments fail to impress.

Administrative agencies are endowed with powers legislative in nature, i.e., the power to make rules and regulations. They have been granted by Congress with the authority to issue rules to regulate the implementation of a law entrusted to them. Delegated rule-making has become a practical necessity in modern governance due to the increasing complexity and variety of public functions. However, while administrative rules and regulations have the force and effect of law, they are not immune from judicial review.12 They may be properly challenged before the courts to ensure that they do not violate the Constitution and no grave abuse of administrative discretion is committed by the administrative body concerned.

The fundamental rule in administrative law is that, to be valid, administrative rules and regulations must be issued by authority of a law and must not contravene the provisions of the Constitution.13 The rule-making power of an administrative agency may not be used to abridge the authority given to it by Congress or by the Constitution. Nor can it be used to enlarge the power of the administrative agency beyond the scope intended. Constitutional and statutory provisions control with respect to what rules and regulations may be promulgated by administrative agencies and the scope of their regulations.14

In the case at bar, we find that the impugned A.O. is invalid as it contravenes the Constitution. The A.O. sought to regulate livestock farms by including them in the coverage of agrarian reform and prescribing a maximum retention limit for their ownership. However, the deliberations of the 1987 Constitutional Commission show a clear intent to exclude, inter alia, all lands exclusively devoted to livestock, swine and poultry- raising. The Court clarified in the Luz Farms case that livestock, swine and poultry-raising are industrial activities and do not fall within the definition of "agriculture" or "agricultural activity." The raising of livestock, swine and poultry is different from crop or tree farming. It is an industrial, not an agricultural, activity. A great portion of the investment in this enterprise is in the form of industrial fixed assets, such as: animal housing structures and facilities, drainage, waterers and blowers, feedmill with grinders, mixers, conveyors, exhausts and generators, extensive warehousing facilities for feeds and other supplies, anti-pollution equipment like bio-gas and digester plants augmented by lagoons and concrete ponds, deepwells, elevated water tanks, pumphouses, sprayers, and other technological appurtenances.15

Clearly, petitioner DAR has no power to regulate livestock farms which have been exempted by the Constitution from the coverage of agrarian reform. It has exceeded its power in issuing the assailed A.O.

The subsequent case of Natalia Realty, Inc. v. DAR16 reiterated our ruling in the Luz Farms case. In Natalia Realty, the Court held that industrial, commercial and residential lands are not covered by the CARL.17 We stressed anew that while Section 4 of R.A. No. 6657 provides that the CARL shall cover all public and private agricultural lands, the term "agricultural land" does not include lands classified as mineral, forest, residential, commercial or industrial. Thus, in Natalia Realty, even portions of the Antipolo Hills Subdivision, which are arable yet still undeveloped, could not be considered as agricultural lands subject to agrarian reform as these lots were already classified as residential lands.

A similar logical deduction should be followed in the case at bar. Lands devoted to raising of livestock, poultry and swine have been classified as industrial, not agricultural, lands and thus exempt from agrarian reform. Petitioner DAR argues that, in issuing the impugned A.O., it was seeking to address the reports it has received that some unscrupulous landowners have been converting their agricultural lands to livestock farms to avoid their coverage by the agrarian reform. Again, we find neither merit nor logic in this contention. The undesirable scenario which petitioner seeks to prevent with the issuance of the A.O. clearly does not apply in this case.Respondents’ family acquired their landholdings as early as 1948. They have long been in the business of breeding cattle in Masbate which is popularly known as the cattle-breeding capital of the Philippines.18 Petitioner DAR does not dispute this

fact. Indeed, there is no evidence on record that respondents have just recently engaged in or converted to the business of breeding cattle after the enactment of the CARL that may lead one to suspect that respondents intended to evade its coverage. It must be stressed that what the CARL prohibits is theconversion of agricultural lands for non-agricultural purposes after the effectivity of the CARL. There has been no change of business interest in the case of respondents.

Moreover, it is a fundamental rule of statutory construction that the reenactment of a statute by Congress without substantial change is an implied legislative approval and adoption of the previous law. On the other hand, by making a new law, Congress seeks to supersede an earlier one.19 In the case at bar, after the passage of the 1988 CARL, Congress enacted R.A. No. 788120 which amended certain provisions of the CARL. Specifically, the new law changed the definition of the terms "agricultural activity" and "commercial farming" by dropping from its coverage lands that are devoted to commercial livestock, poultry and swine-raising.21 With this significant modification, Congress clearly sought to align the provisions of our agrarian laws with the intent of the 1987 Constitutional Commission to exclude livestock farms from the coverage of agrarian reform.

In sum, it is doctrinal that rules of administrative bodies must be in harmony with the provisions of the Constitution. They cannot amend or extend the Constitution. To be valid, they must conform to and be consistent with the Constitution. In case of conflict between an administrative order and the provisions of the Constitution, the latter prevails.22 The assailed A.O. of petitioner DAR was properly stricken down as unconstitutional as it enlarges the coverage of agrarian reform beyond the scope intended by the 1987 Constitution.

IN VIEW WHEREOF, the petition is DISMISSED. The assailed Decision and Resolution of the Court of Appeals, dated September 19, 2003 and February 4, 2004, respectively, are AFFIRMED. No pronouncement as to costs.

SO ORDERED.

Republic of the PhilippinesSUPREME COURT

Manila

SECOND DIVISION

G.R. No. 152640 June 15, 2006

DEPARTMENT OF AGRARIAN REFORM, rep. by SECRETARY HERNANI A. BRAGANZA, Petitioner, vs.PHILIPPINE COMMUNICATIONS SATELLITE CORP., Respondent.

D E C I S I O N

AZCUNA, J.:

This is a petition for review on certiorari under Rule 45 of the Rules of Court by the Department of Agrarian Reform (DAR) seeking the nullification of the Decision and Resolution, dated November 23, 2001 and March 7, 2002, respectively, of the Court of Appeals in CA-G.R. SP No. 57435, entitled "Philippine Communications Satellite Corporation (PHILCOMSAT) v. DAR."

The controversy involves a parcel of land owned by respondent PHILCOMSAT situated within the area which had been declared a security zone under Presidential Decree (P.D.) No. 1845, as amended by P.D. No. 1848, entitled

"Declaring the Area within a Radius of Three Kilometers surrounding the Satellite Earth Station in Baras, Rizal, a Security Zone."

The facts of the case are as follows:

PHILCOMSAT is the owner of a parcel of land situated in Pinugay, Baras, Rizal, where its Philippine Space Communications Center (PSCC) is located. The PSCC, which principally consists of herein respondent’s satellite earth station, serves as the communications gateway of the Philippines to more than two-thirds of the world. Incidentally, the property had been planted with fruit trees, rice and corn by farmers occupying the surrounding areas of the PSCC.

On April 30, 1982, P.D. No. 1845 was promulgated. This decree was amended on July 29, 1982 by P.D. No. 1848, Section 1 of which states:

Section 1. Declaration of Security Zone. – The entire area surrounding the satellite earth station in Sitio San Miguel, Barrio Pinugay, Municipality of Baras, Province of Rizal, Island of Luzon, within a radius of three kilometers, more or less, from the main satellite earth station, the metes and bounds of such area to be determined by the Minister of National Defense, is hereby declared a security zone. For this purpose, and in the interest of national security, ingress to and egress from the security zone as well as occupancy of portions thereof shall be controlled and regulated, without prejudice to the payments of just compensation to persons whose rights of ownership may be injuriously affected thereby x x x.

The three-kilometer security zone covers an area of 5,654 hectares, which includes the 700 hectares owned by PHILCOMSAT that is being subjected to the Comprehensive Agrarian Reform Program (CARP)1 of the government. Also included within this three-kilometer radius is the 1.5 kilometers radius from the antenna wherein local harmful Radio Frequency Interference resulting from ignition systems, motor starters, high voltage discharges, and the like, is captured and amplified which can hamper telecommunications services.2

Pursuant to the decree, the Ministry of National Defense promulgated the Revised Rules and Regulations to Implement P.D. No. 1845 dated 30 April 1982, as amended, Declaring the Philippine Earth Station (PES) Security Zone. In view of this, the metes and bounds of PHILCOMSAT’s satellite earth station in Baras, Rizal, were delineated.

In 1992, a Notice of Coverage was sent to PHILCOMSAT by petitioner DAR informing the former that the land in question shall be placed under CARP’s compulsory acquisition scheme.

On January 28, 1994, PHILCOMSAT wrote to DAR seeking an exemption of the subject property from CARP coverage, insisting that the land will be utilized for the expansion of its operations, and for the following reasons:3

1) The land is being used for national defense in accordance with Section 10 of Republic Act (R.A.) No. 6657 which provides:

"Section 10. Exemptions and Exclusions. -- Lands actually, directly and exclusively used and found necessary for parks, wildlife, forest reserves, reforestation, fish sanctuaries and breeding grounds, watersheds and mangroves, national defense x x x, shall be exempt from the coverage of this Act."

2) The company should be free from harmful Radio Frequency Interference (RFI) to maintain highest service reliability;

3) Compliance with the provisions of P.D. No. 1845, as amended by P.D.1848, stating the vitality of the PSCC in the security system within the purview of national defense; and,

4) The development of the area, in response to the Philippines’ plan to launch its own national satellite and to address the massive telecommunications build-up in the Asia-Pacific Region.4

Respondent’s application for exemption from CARP coverage was evaluated by DAR. During the pendency of the application, then DAR Secretary Ernesto D. Garilao, in a letter dated March 21, 1994, suggested that respondent enter into a usufructuary agreement with the occupants of the subject property until such time that it will have to use the property for its planned expansion. The occupants, however, refused to enter into such an agreement.5

Meanwhile, the Sangguniang Bayan of Tanay, Rizal, in its Resolution No. 65-94 that was endorsed to DAR, moved for the coverage of the 700-hectare PHILCOMSAT property within the security zone under CARP. The Provincial Agrarian Reform Officer of Teresa, Rizal further opined that subjecting the surrounding agricultural area within the security zone under CARP will not be detrimental to the operations of PHILCOMSAT.6

On May 25, 1998, an Order was issued by then Secretary Garilao rejecting PHILCOMSAT’s application for exemption from CARP, citing three main reasons:

1) The occupants in the area can be considered as bona fide tenants of the registered owner before PHILCOMSAT acquired the same for its projected expansion of operations as they have been tilling said area for several years;

2) Said occupants had been identified by the Municipal Agrarian Reform Officer (MARO) as potential CARP beneficiaries when the land was placed under the compulsory acquisition scheme; and,

3) The term "security zone" is not embraced within the definition of lands used for national defense under Section 10 of R. A. No. 6657.7

Its motion for reconsideration of the aforesaid Order having been denied, PHILCOMSAT filed a Petition for Review with the Court of Appeals.

Granting said petition, the Court of Appeals held:

WHEREFORE, premises considered, the instant petition is hereby GRANTED. The Order dated 25 May 1998 issued by respondent Department of Agrarian Reform as well as the Resolution dated 31 January 2000 denying petitioner’s motion for reconsideration of the said Order are hereby NULLIFIED and SET ASIDE and a new one is entered, declaring the subject landholdings of petitioner situated at Pinugay, Baras, Rizal, exempted from the CARP coverage, considering that it was declared a security zone under P.D. [No.] 1845, as revised by P.D. [No.] 1848.

SO ORDERED.8

A motion for reconsideration of the above decision was filed by DAR but the same was denied by the Court of Appeals in its Resolution, dated March 7, 2002.9

Hence, this petition with the following assignment of errors:

I

THE HONORABLE COURT OF APPEALS ERRED WHEN IT DECLARED THAT R.A. NO. 6657 (COMPREHENSIVE AGRARIAN REFORM LAW OF 1988) AND P.D. NO. 1848, WHICH DECLARED THE SUBJECT LANDHOLDING AS A SECURITY ZONE, CANNOT, IN EFFECT, CO-EXIST WITH EACH OTHER;

II

THE HONORABLE COURT OF APPEALS ERRED WHEN IT APPLIED THE STATUTORY RULE GENERALIA SPECIALIBUS NON DEROGANT; AND,

III

THE HONORABLE COURT OF APPEALS ERRED WHEN IT RULED THAT THE SUBJECT PROPERTY IS EXEMPT FROM THE COVERAGE OF CARP.

Thus, the main issue in this case is whether or not the subject property of PHILCOMSAT which had been declared a security zone under P.D. No. 1845, as amended by P.D. No. 1848, can be subjected to CARP.

P.D. No. 1845, as amended by P.D. No. 1848, was issued way before the effectivity of the Comprehensive Agrarian Reform Law of 1988. The same was issued in 1982 pursuant to an exigency to create a security zone in the surrounding areas of PHILCOMSAT’s satellite earth station in order to ensure its security and uninterrupted operation considering the vital role of the earth station in the country’s telecommunications and national development. Thus, P.D. No. 1845 provides:

WHEREAS, the only earth station in the Philippines for world satellite telecommunications is located in a remote and sparsely populated place in sitio San Miguel, Barrio Pinugay, Municipality of Baras, Province of Rizal;

WHEREAS, the said earth station is vital to the existence and maintenance of satellite telecommunications between the Philippines and most countries of the world and plays an invaluable role in the sustenance and development of our political, economic, commercial, and social life;

WHEREAS, in view of its location, it would be easy for saboteurs or criminal elements to destroy or cause damage to the said earth station thereby paralyzing the system and curtailing momentous public service; and

WHEREAS, to protect and insure the safety and uninterrupted operation of this modern media of international communications, it is necessary to establish a security zone all around the said earth station.

P.D. No. 1848, amending P.D. No. 1845, subjected the security zone to the authority of the Ministry of National Defense, consequently conferring on the Minister of National Defense the power and authority to determine who can occupy the areas within the security zone, and how the lands shall be utilized, to wit:

SEC. 3. -- Occupation by Owner. Owners of land within the security zone and/or their bona fide tenants, lessees, or agents can occupy or continue to occupy their respective lands or areas therein subject to prior written permission or authority of the Minister of National Defense.

SEC 4. -- In cases where an owner or a bona fide occupant is, in the determination of the Minister of National Defense, not entitled to an occupancy permit, he shall have the option of demanding payment of just compensation for his property rights, or to sell such rights to any person qualified to own or occupy such property.

SEC. 5. -- The Armed Forces of the Philippines may, thru negotiation or expropriation, acquire ownership of any land or area located or situated within the zone.

The law, in effect, by declaring the area a security zone, has granted to the Ministry of National Defense the control and administration of the same. As a rule, where a general power is conferred or duty enjoined, every particular power necessary for the exercise of one or the performance of the other is also conferred.10

Upon the passage of the Comprehensive Agrarian Reform Law which became effective on July 15, 1988, all public and private agricultural lands,11 and other lands of public domain suitable for agriculture, regardless of tenurial arrangement and commodity produced, were declared subject to its coverage.12

The area in question which is included within the security zone is agricultural. It has been planted with different crops and fruit trees by its occupants, and has been found by DAR to be suitable for agriculture.

The area, however, should be exempt from CARP coverage by virtue of P.D. No. 1845, as amended, which, as stated earlier, declared the area to be a security zone under the jurisdiction of the Ministry of National Defense.

It is evident from the very wording of the law that the government recognized the crucial role of PHILCOMSAT’s operations to national security, thereby necessitating the protection of its operations from unnecessary and even anticipated disruption. Thus, every statute is understood, by implication, to contain all such provisions as may be necessary to effectuate its object and purpose, or to make effective rights, powers, privileges or jurisdiction which it grants, including all such collateral and subsidiary consequences as may be fairly and logically inferred from its terms.13

In this regard, the Court agrees with the Court of Appeals when it stated that:

The subject property is clearly within the scope of the Comprehensive Agrarian Reform Law, in accordance with Chapter II, section 4(d) thereof, had it not been decreed by P.D. No. 1845 that it is a security zone. The very purpose by which P.D. No. 1845 was passed declaring the area within a radius of three kilometers surrounding the satellite earth station in Baras, Rizal a security zone is to protect and insure the safety and uninterrupted operation of the modern media of international communications in the said property, as indicated in the whereas clause of said law. Thus, to subject said security zone to the Comprehensive Agrarian Reform Program of the government would negate the very purpose by which P.D. 1845, as revised by P.D. 1848, was decreed. These laws have never been repealed.

P.D. 1848 is also specific in that occupation of the area, either by the owners or their bona fide tenants, require a prior written permission or authority from the Ministry of the National Defense, now Department of National Defense. It is therefore the Department of National Defense which will determine [x x x] who can occupy the subject property, and not the Department of Agrarian Reform. To subject the property in question to agrarian reform is indirectly giving the Department of Agrarian Reform authority to determine [x x x] who can occupy the property, in violation of the mandate of P.D. 1848.

We find it not necessary to determine whether or not the subject property is actually, directly, and exclusively used for national defense, to be exempted from the coverage of R.A. 6657. The law which decreed the areas a security zone is very clear in its purpose. It is a principle in statutory construction that where there are two statutes that apply to a particular case, that which was specifically designed for the said case must prevail over the other (Lapid v. Court of Appeals, 334 SCRA 738).14

Section 10 of the Comprehensive Agrarian Reform Law or R.A. No. 6657,15 as amended, provides that lands actually, directly and exclusively used and found to be necessary for national defense shall be exempt from the coverage of the Act. The determination as to whether or not the subject property is actually, directly, and exclusively used for national defense usually entails a finding of fact which this Court will not normally delve into considering that, subject to certain exceptions, in a petition for certiorari under Rule 45 of the Rules of Court, the Court is called upon to review only errors of law.16 Suffice it to state, however, that as a matter of principle, it cannot seriously be denied that the act of securing a vital communication facilities is an act of national defense. Hence, the law, by segregating an area for purposes of a security zone for such facilities, in effect devoted that area to national defense.

WHEREFORE, the petition is DENIED. The Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 57435, dated November 23, 2001 and March 7, 2002, respectively, are hereby AFFIRMED.

No costs.

Republic of the PhilippinesSUPREME COURT

Manila

THIRD DIVISION

G.R. No. 161910 June 17, 2008

DEPARTMENT OF AGRARIAN REFORM, rep. by OIC SECRETARY JOSE MARI B. PONCE, petitioner, vs.MA. REGINA I. SAMSON, J. DOMINIC SAMSON, ANNE-MARIE SAMSON and LIESL MARIE EUGENIE SAMSON, respondents.

G.R. No. 161930 June 17, 2008

LEOLITO EDA, MARCELO DE CLARO, TORIBIO BENZUELA, DONATA MENDOZA, ARSENIO MACASADIA, FELICIANO DE CLARO, FELICIDAD C. DE CLARO, SALVACION BALONDO, PETRA LEZARDO, CONSOLACION L. DE CLARO, LEONARDO C. DE CLARO, AGRIPINO DE CLARO, VIRGILIO ESTRECOMIN, ELVIE GALANO, EVARESTO DE CLARO, represented by LEOLITO EDA as their attorney-in-fact, REGISTRY OF DEEDS, CALAMBA, LAGUNA PROVINCE and HON. HORACIO R. MORALES, JR., in his capacity as Secretary of Agrarian Reform, petitioners, vs.MA. REGINA I. SAMSON, J. DOMINIC SAMSON, ANNE-MARIE SAMSON and LIESL MARIE EUGENIE SAMSON, respondents.

D E C I S I O N

YNARES-SANTIAGO, J.:

These consolidated petitions assail the October 10, 2003 Decision1 of the Court of Appeals in CA-G.R. SP No. 60036, reversing and setting aside the June 29, 20002 Decision of the Office of the President and enjoining the Secretary of the Department of Agrarian Reform (DAR) and the Register of Deeds of Calamba, Laguna from implementing the same. Also assailed is the January 27, 20043 Resolution denying the motion for reconsideration.

During his lifetime, Enrique T. Samson4 applied for exemption from the coverage of the Comprehensive Agrarian Reform Program (CARP) over nine (9) parcels of land with an aggregate area of 27.7359 hectares, located in Barangays Pansol and Sukol, Calamba, Laguna, and covered by Transfer Certificate of Title Nos. T-151979, T-151980, T-94607, T-94605, T-94606, T-60653, T-203493, T-203494, T-203495 issued by the Register of Deeds for Calamba, Laguna in the name of Samson.

In an undated Order issued sometime in 1995, the subject lots were declared exempt from CARP coverage by DAR Regional Director Percival C. Dalugdug.5 The dispositive portion of said Order reads:

WHEREFORE, premises considered and pursuant to AO No. 10, Series of 1994, Order is hereby issued approving the exclusion from CARP Coverage of the subject nine (9) parcels of land provided, however, that their disposition or any project to be implemented therein shall be subject to DENR’s clearance and to the Moratorium contained in Section 5 of Executive Order 121 dated August 24, 1993.

SO ORDERED.6

On March 19, 1997, petitioners-farmers filed an Opposition/Petition alleging that they received the undated Order of DAR only on January 27, 1997. They prayed that the same be set aside and nullified because although the lands covered by the Order have a slope of more than 18%, the same were fully developed and planted with variety of plants, and to which some of them have their farm houses built.7

In an Order8 dated March 4, 1998, DAR considered the Opposition/Petition filed as an appeal and disposed of the same as follows:

WHEREFORE, premises considered order is hereby issued, ordering the Regional Office No. IV to segregate the areas with agricultural developments and cover the same (under) the Comprehensive Agrarian Reform Program (CARP) and exempting the balance.

SO ORDERED.9

DAR found no evidence that the subject lots are within the Makiling Forest Reserve Area; and the fact that these are titled lands supports the contention that these are neither public lands nor within the reservation area. It also noted that the ocular inspection report submitted by their team confirms the presence of agriculturally developed portions in the area. Hence, portions of the subject landholding even with a slope of more than 18% may still be covered by CARP due to the presence of agriculturally developed areas.

On July 12, 1999, Samson learned that a group of surveyors inspected the subject properties for the purpose of determining which portions should be distributed to his tenants. When he sought clarification from the DAR Provincial Agrarian Reform Officer, Felixberto Kagahastian, as to the purpose of the survey, he was informed for the first time about the "Appeal" filed by the farmers which was subsequently granted by DAR. Samson was able to secure a copy of the March 4, 1998 Order only on July 16, 1999.

On August 9, 1999, Samson assailed the Order before the Office of the President arguing that he was not notified of the appeal; that had he been properly apprised, he could have presented evidence to prove that the properties have a slope of 18% or over and are not developed; and that petitioner-farmers are not qualified beneficiaries of the CARP. He denied that he was represented during the alleged ocular inspection conducted by DAR on February 17, 1998.10

On June 29, 2000, the Office of the President rendered a Decision,11 the dispositive portion of which reads:

WHEREFORE, foregoing premises considered, the assailed DAR order dated March 4, 1998 is hereby AFFIRMED and the instant appeal DISMISSED.

SO ORDERED.12

The Office of the President ruled that any alleged procedural lapses committed in the proceedings before the DAR were cured when Samson interposed the appeal before it which gave him an opportunity to present evidence and to substantiate the claim that the subject land is exempt from CARP coverage. Likewise, the DAR Secretary considered all available records including Samson’s application for exemption thus, there is no denial of due process.

The Office of the President sustained DAR’s ruling that the subject properties were within the coverage of CARP after finding that although the land has a slope of more than 18%, there are portions which are agriculturally developed. These findings were based on the supplemental report submitted by Marino A. Austria, DAR’s Senior Agrarian Reform Technologist on August 23, 1994 and the report of the DAR team who conducted the ocular inspection on February 17, 1998. The Office of the President also ruled that the Order granting Samson’s application for exemption was not supported by evidence.13

Samson appealed to the Court of Appeals which rendered the assailed Decision reversing and setting aside the Decision of the Office of the President and enjoining the DAR Secretary and the Register of Deeds for Calamba, Laguna, from implementing the June 29, 2000 Decision of the Office of the President. The dispositive portion of the Decision reads:

WHEREFORE, the instant petition is given DUE COURSE and GRANTED. The respondent DAR Secretary, his successors, agents and representatives, and the Register of Deeds for Calamba, Laguna are hereby enjoined from implementing the Decision dated June 29, 2000 of the Office of the President in O.P. Case No. 99-D-889 as well as those from which it was derived.

SO ORDERED.14

The Court of Appeals ruled that there was a final decree of CARP exemption issued in favor of Samson and its reversal by DAR and the Office of the President is grossly irregular. It ruled that DAR committed grave abuse of discretion in entertaining the belated appeal of the farmers. Though technical rules of procedure and evidence are not strictly applied in administrative proceedings, entertaining an appeal filed after more than a year had lapsed is a total disregard of the rules, an abuse of discretion to favor one party.

Petitioners filed separate motions for reconsideration which were denied by the Court of Appeals in a Resolution15dated January 27, 2004. Thereafter, they filed separate petitions for review on certiorari which was ordered consolidated by the Court in its Resolution dated March 10, 2004.16

In G.R. No. 161910, petitioner DAR alleged that the Court of Appeals erred:

1. WHEN IT RULED THAT PETITIONER COMMITTED A FAUX PAS WHICH WAS FATAL AND DAMAGING TO THE DEFENSE OF BOTH PUBLIC AND PRIVATE RESPONDENTS AND FAILED TO CONSIDER THE ESTABLISHED FACT, AND EXISTING JURISPRUDENCE, THAT RESPONDENT OR THEIR PREDECESSOR WERE ALLOWED TO BE HEARD AND THERE WAS AVAILMENT THEREOF.

2. WHEN IT REVERSED THE DECISIONS OF THE OFFICE OF THE PRESIDENT AND OF DAR ON THE GROUND THAT PETITIONER COMMITTED GRAVE ABUSE OF DISCRETION WHEN IT ENTERTAINED THE 1997 APPEAL OF THE FARMERS.17

On the other hand, in G.R. No. 161930, petitioners-farmers raised the following issues:

I.

WHETHER THE HONORABLE COURT OF APPEALS ERRED IN REVERSING THE DECISION OF THE OFFICE OF THE PRESIDENT AS WELL AS THAT OF THE DEPARTMENT OF AGRARIAN REFORM.

II.

WHETHER THE COURT OF APPEALS ERRED IN HOLDING THAT RESPONDENTS WERE DENIED DUE PROCESS OF LAW.18

The resolution of these consolidated cases revolves around the propriety of the appeal interposed by farmers-petitioners before the DAR. Petitioners insist there was no grave abuse of discretion when DAR entertained the appeal and that respondents were not denied due process during the proceedings. On the other hand, respondents argue that they were denied due process because they were not able to participate in the proceedings before the DAR and that their appeal with the Office of the President did not cure the said procedural lapse.

Administrative Order No. 13 series of 1990 (A.O. No. 13-90)19 as revised by Administrative Order No. 10 series of 1994 (A.O. No. 10-94)20 provides that the Order of the Regional Director approving or denying the application for exemption shall become final 15 days from receipt of the same unless an appeal is made to the Secretary.21Though the undated Order of Regional Director Dalugdug appears to have been issued sometime in 1995, the farmers-petitioners alleged that they were notified of said Order only on January 27, 1997. Hence, when petitioners-farmers filed their Opposition/Petition on March 19, 1997, the period to appeal had expired.

However, we find no error on the part of petitioner DAR when it entertained the appeal of farmers-petitioners after finding the same meritorious, consistent with the declared policies of RA 6657 in giving the welfare of the landless farmers and farm workers the highest consideration. In several instances, even the Court entertained and allowed lapsed appeals in the higher interest of justice.22 Moreover, proceedings before the DAR are summary and pursuant to Section 50 of RA 6657, the department is not bound by technical rules of procedure and evidence, to the end that agrarian reform disputes and other issues will be adjudicated in a just, expeditious and inexpensive action or proceeding.23

It is important to reiterate that administrative agencies are not bound by the technical niceties of law and procedure and the rules obtaining in the courts of law. It is well-settled that rules of procedure are construed liberally in proceedings before administrative bodies and are not to be applied in a very rigid and technical manner, as these are used only to help secure and not to override substantial justice.24

Besides, we find that respondents were not denied due process. In administrative proceedings, a fair and reasonable opportunity to explain one’s side suffices to meet the requirements of due process.25 In Casimiro v. Tandog,26 the Court held:

The essence of procedural due process is embodied in the basic requirement of notice and a real opportunity to be heard. In administrative proceedings, such as in the case at bar, procedural due process simply means the opportunity to explain one’s side or the opportunity to seek a reconsideration of the action or ruling complained of. "To be heard" does not mean only verbal arguments in court; one may be heard also thru pleadings. Where opportunity to be heard, either through oral arguments or pleadings, is accorded, there is no denial of procedural due process.

In administrative proceedings, procedural due process has been recognized to include the following: (1) the right to actual or constructive notice of the institution of proceedings which may affect a respondent’s legal rights; (2) a real opportunity to be heard personally or with the assistance of counsel, to present witnesses and evidence in one’s favor, and to defend one’s rights; (3) a tribunal vested with competent jurisdiction and so constituted as to afford a person charged administratively a reasonable guarantee of honesty as well as impartiality; and (4) a finding by said tribunal which is supported by substantial evidence submitted for consideration during the hearing or contained in the records or made known to the parties affected.27

In the instant case, it was not shown that farmers-petitioners sent notices or copies of their Opposition/Petition to respondents. However, as correctly ruled by the Office of the President, there is no denial of due process because the DAR Secretary, in issuing the assailed Order, considered all available records of the case at the DAR Regional Office, including respondents’ application for exemption and its supporting documents, as well as the farmers-petitioners’ petition/opposition.

Neither can the DAR be faulted for sending its notices to respondents’ predecessor’s previous address in Quezon City as it was the same address appearing in the undated Order of Director Dalugdug. Thus, it was proper for the said agency to rely on the last known address appearing in their records.

In any event, the Court agrees with petitioners that any procedural defect in the proceedings before the DAR was cured when Samson appealed before the Office of the President. In Gonzales v. Civil Service Commission,28 the Court ruled that any seeming defect in the observance of due process is cured by the filing of a motion for reconsideration and that denial of due process cannot be successfully invoked by a party who has had the opportunity to be heard thereon.29 Likewise, in Autencio v. City Administrator Mañara and the City of Cotabato,30the Court ruled that where the party has the opportunity to appeal or seek reconsideration of the action or ruling complained of, defects in procedural due process may be cured.31 It should be noted that although the March 4, 1998 ruling of the DAR had attained finality, the Office of the President still entertained respondents’ appeal thus giving them the opportunity to be heard.

Courts will not interfere in matters which are addressed to the sound discretion of the government agency entrusted with the regulation of activities coming under the special and technical training and knowledge of such agency. Administrative agencies are given wide latitude in the evaluation of evidence and in the exercise of their adjudicative functions, latitude which includes the authority to take judicial notice of facts within their special competence.32

As to whether the subject properties are exempt from CARP coverage, the Court of Appeals did not make any findings inasmuch as it limited its discussion in resolving the procedural issues raised before it. Considering that these issues involve an evaluation of the DAR’s findings of facts, this Court is constrained to accord respect to such findings. It is settled that factual findings of administrative agencies are generally accorded respect and even finality by this Court, if such findings are supported by substantial evidence. The factual findings of the Secretary of DAR who, by reason of his official position, has acquired expertise in specific matters within his jurisdiction, deserve full respect and, without justifiable reason, ought not to be altered, modified or reversed.33

The DAR and the Office of the President ruled that only certain portions of the subject properties may be placed under the coverage of the CARP due to the agricultural developments they found thereon. Hence, it ordered that these areas be segregated for CARP coverage while the rest of the subject properties shall remain exempt. The Court notes however that there is no final determination yet as to which portions of the properties are to be covered and whether the farmers-petitioners herein are qualified beneficiaries. As such, respondents may still participate in the segregation of these areas and exercise other rights provided for landowners under RA 6657.

WHEREFORE, the instant petitions for review on certiorari are GRANTED. The assailed Decision of the Court Appeals dated October 10, 2003 and the Resolution dated January 27, 2004, in CA-G.R. SP No. 60036 areREVERSED and SET ASIDE. The Order of the Department of Agrarian Reform dated March 4, 1998, as affirmed by the Office of the President, ordering the Regional Office No IV (of the DAR) to segregate the areas with agricultural developments and place the same under the CARP coverage and exempting the rest of the subject properties, is hereby REINSTATED and AFFIRMED.

SO ORDERED.