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Hacienda Luisita Inc. (HLI) v. Presidential Agrarian Reform Council (PARC), et al., G.R. No.

171101, July 5, 2011 DECISION VELASCO, JR., J.: I. THE FACTS

In 1958, the Spanish owners of Compaia General de Tabacos de Filipinas (Tabacalera) sold Hacienda Luisita and the Central Azucarera de Tarlac, the sugar mill of the hacienda, to the Tarlac Development Corporation (Tadeco), then owned and controlled by the Jose Cojuangco Sr. Group. The Central Bank of the Philippines assisted Tadeco in obtaining a dollar loan from a US bank. Also, the GSIS extended a PhP5.911 million loan in favor of Tadeco to pay the peso price component of the sale, with the condition that the lots comprising the Hacienda Luisita be subdivided by the applicant-corporation and sold at cost to the tenants, should there be any, and whenever conditions should exist warranting such action under the provisions of the Land Tenure Act. Tadeco however did not comply with this condition. On May 7, 1980, the martial law administration filed a suit before the Manila RTC against Tadeco, et al., for them to surrender Hacienda Luisita to the then Ministry of Agrarian Reform (MAR) so that the land can be distributed to farmers at cost. Responding, Tadeco alleged that Hacienda Luisita does not have tenants, besides which sugar lands of which the hacienda consisted are not covered by existing agrarian reform legislations. The Manila RTC rendered judgment ordering Tadeco to surrender Hacienda Luisita to the MAR. Therefrom, Tadeco appealed to the CA. On March 17, 1988, during the administration of President Corazon Cojuangco Aquino, the Office of the Solicitor General moved to withdraw the governments case against Tadeco, et al. The CA dismissed the case, subject to the PARCs approval of Tadecos proposed stock distribution plan (SDP) in favor of its farmworkers. [Under EO 229 and later RA 6657, Tadeco had the option of availing stock distribution as an alternative modality to actual land transfer to the farmworkers.] On August 23, 1988, Tadeco organized a spin-off corporation, herein petitioner HLI, as vehicle to facilitate stock acquisition by the farmworkers. For this purpose, Tadeco conveyed to HLI the agricultural land portion (4,915.75 hectares) and other farm-related properties of Hacienda Luisita in exchange for HLI shares of stock. On May 9, 1989, some 93% of the then farmworker-beneficiaries (FWBs) complement of Hacienda Luisita signified in a referendum their acceptance of the proposed HLIs Stock Distribution Option Plan (SODP). On May 11, 1989, the SDOA was formally entered into by Tadeco, HLI, and the 5,848 qualified FWBs. This attested to by then DAR Secretary Philip Juico. The SDOA embodied the basis and mechanics of HLIs SDP, which was eventually approved by the PARC after a follow-up referendum conducted by the DAR on October 14, 1989, in which 5,117 FWBs, out of 5,315 who participated, opted to receive shares in HLI. On August 15, 1995, HLI applied for the conversion of 500 hectares of land of the hacienda from agricultural to industrial use, pursuant to Sec. 65 of RA 6657. The DAR approved the application on August 14, 1996, subject to payment of three percent (3%) of the gross selling price to the FWBs and to HLIs continued compliance with its undertakings under the SDP, among other conditions. On December 13, 1996, HLI, in exchange for subscription of 12,000,000 shares of stocks of Centennary Holdings, Inc. (Centennary), ceded 300 hectares of the converted area to the latter. Subsequently, Centennary sold the entire 300 hectares for PhP750 million to Luisita Industrial Park Corporation (LIPCO), which used it in developing an industrial complex. From this area was carved out 2 parcels, for which 2 separate titles were issued in the name of LIPCO. Later, LIPCO transferred these 2 parcels to the Rizal Commercial Banking Corporation (RCBC) in payment of LIPCOs PhP431,695,732.10 loan obligations to RCBC. LIPCOs titles were cancelled and new ones were issued to RCBC. Apart from the 500 hectares, another 80.51 hectares were later detached from Hacienda Luisita and acquired by the government as part of the Subic-Clark-Tarlac Expressway (SCTEX) complex. Thus, 4,335.75 hectares remained of the original 4,915 hectares Tadeco ceded to HLI. Such, was the state of things when two separate petitions reached the DAR in the latter part of 2003. The first was filed by the Supervisory Group of HLI (Supervisory Group), praying for a renegotiation of the SDOA, or, in the alternative, its revocation. The second petition, praying for the revocation and nullification of the SDOA and the distribution of the lands in the hacienda, was filed by Alyansa ng mga Manggagawang Bukid ng Hacienda Luisita (AMBALA). The DAR then constituted a Special Task Force (STF) to attend to issues relating to the SDP of HLI. After investigation and evaluation, the STF found that HLI has not complied with its obligations under RA 6657 despite the implementation of the SDP. On December 22, 2005, the PARC issued the assailed Resolution No. 2005-32-01, recalling/revoking the SDO plan of Tadeco/HLI. It further resolved that the subject lands be forthwith placed under the compulsory coverage or mandated land acquisition scheme of the CARP. From the foregoing resolution, HLI sought reconsideration. Its motion notwithstanding, HLI also filed a petition before the Supreme Court in light of what it considers as the DARs hasty placing of Hacienda Luisita under CARP even before PARC could rule or even read the motion for reconsideration. PARC would eventually deny HLIs motion for reconsideration via Resolution No. 2006-34-01 dated May 3, 2006. II. THE ISSUES

(1) Does the PARC possess jurisdiction to recall or revoke HLIs SDP? (2) [Issue raised by intervenor FARM (group of farmworkers)] Is Sec. 31 of RA 6657, which allows stock transfer in lieu of outright land transfer, unconstitutional? (3) Is the revocation of the HLIs SDP valid? [Did PARC gravely abuse its discretion in revoking the subject SDP and placing the hacienda under CARPs compulsory acquisition and distribution scheme?] (4) Should those portions of the converted land within Hacienda Luisita that RCBC and LIPCO acquired by purchase be excluded from the coverage of the assailed PARC resolution? [Did the PARC gravely abuse its discretion when it included LIPCOs and RCBCs respective properties that once formed part of Hacienda Luisita under the CARP compulsory acquisition scheme via the assailed Notice of Coverage?] III. THE RULING [The Court DENIED the petition of HLI and AFFIRMED the PARC resolution placing the lands subject of HLIs SDP under compulsory coverage on mandated land acquisition scheme of the CARP, with the MODIFICATION that the original 6,296 qualified FWBs were given the option to remain as stockholders of HLI. It also excluded from the mandatory CARP coverage that part of Hacienda Luisita that had been acquired by RCBC and LIPCO.] (1) YES, the PARC has jurisdiction to revoke HLIs SDP under the doctrine of necessary implication. Under Sec. 31 of RA 6657, as implemented by DAO 10, the authority to approve the plan for stock distribution of the corporate landowner belongs to PARC. Contrary to petitioner HLIs posture, PARC also has the power to revoke the SDP which it previously approved. It may be, as urged, that RA 6657 or other executive issuances on agrarian reform do not explicitly vest the PARC with the power to revoke/recall an approved SDP. Such power or authority, however, is deemed possessed by PARC under the principle of necessary implication, a basic postulate that what is implied in a statute is as much a part of it as that which is expressed. Following the doctrine of necessary implication, it may be stated that the conferment of express power to approve a plan for stock distribution of the agricultural land of corporate owners necessarily includes the power to revoke or recall the approval of the plan. To deny PARC such revocatory power would reduce it into a toothless agency of CARP, because the very same agency tasked to ensure compliance by the corporate landowner with the approved SDP would be without authority to impose sanctions for non-compliance with it. (2) NO, Sec. 31 of RA 6657 is not unconstitutional. [The Court actually refused to pass upon the constitutional question because it was not raised at the earliest opportunity and because the resolution thereof is not the lis mota of the case. Moreover, the issue has been rendered moot and academic since SDO is no longer one of the modes of acquisition under RA 9700.]

When the Court is called upon to exercise its power of judicial review over, and pass upon the constitutionality of, acts of the executive or legislative departments, it does so only when the following essential requirements are first met, to wit: (1) there is an actual case or controversy; (2) that the constitutional question is raised at the earliest possible opportunity by a proper party or one with locus standi; and (3) the issue of constitutionality must be the very lis mota of the case. Not all the foregoing requirements are satisfied in the case at bar. While there is indeed an actual case or controversy, intervenor FARM, composed of a small minority of 27 farmers, has yet to explain its failure to challenge the constitutionality of Sec. 31 of RA 6657 as early as November 21, 1989 when PARC approved the SDP of Hacienda Luisita or at least within a reasonable time thereafter, and why its members received benefits from the SDP without so much of a protest. It was only on December 4, 2003 or 14 years after approval of the SDP that said plan and approving resolution were sought to be revoked, but not, to stress, by FARM or any of its members, but by petitioner AMBALA. Furthermore, the AMBALA petition did NOT question the constitutionality of Sec. 31 of RA 6657, but concentrated on the purported flaws and gaps in the subsequent implementation of the SDP. Even the public respondents, as represented by the Solicitor General, did not question the constitutionality of the provision. On the other hand, FARM, whose 27 members formerly belonged to AMBALA, raised the constitutionality of Sec. 31 only on May 3, 2007 when it filed its Supplemental Comment with the Court. Thus, it took FARM some eighteen (18) years from November 21, 1989 before it challenged the constitutionality of Sec. 31 of RA 6657 which is quite too late in the day. The FARM members slept on their rights and even accepted benefits from the SDP with nary a complaint on the alleged unconstitutionality of Sec. 31 upon which the benefits were derived. The Court cannot now be goaded into resolving a constitutional issue that FARM failed to assail after the lapse of a long period of time and the occurrence of numerous events and activities which resulted from the application of an alleged unconstitutional legal provision. The last but the most important requisite that the constitutional issue must be the very lis mota of the case does not likewise obtain. The lis mota aspect is not present, the constitutional issue tendered not being critical to the resolution of the case. The unyielding rule has been to avoid, whenever plausible, an issue assailing the constitutionality of a statute or governmental act. If some other grounds exist by which judgment can be made without touching the constitutionality of a law, such recourse is favored. The lis mota in this case, proceeding from the basic positions originally taken by AMBALA (to which the FARM members previously belonged) and the Supervisory Group, is the alleged non-compliance by HLI with the conditions of the SDP to support a plea for its revocation. And before the Court, the lis mota is whether or not PARC acted in grave abuse of discretion when it ordered the recall of the SDP for such non-compliance and the fact that the SDP, as couched and implemented, offends certain constitutional and statutory provisions. To be sure, any of these key issues may be resolved without plunging into the constitutionality of Sec. 31 of RA 6657 . Moreover, looking deeply into the underlying petitions of AMBALA, et al., it is not the said section per se that is invalid, but rather it is the alleged application of the said provision in the SDP that is flawed. It may be well to note at this juncture that Sec. 5 of RA 9700, amending Sec. 7 of RA 6657, has all but superseded Sec. 31 of RA 6657 vis--vis the stock distribution component of said Sec. 31. In its pertinent part, Sec. 5 of RA 9700 provides: [T]hat after June 30, 2009, the modes of acquisition shall be limited to voluntary offer to sell and compulsory acquisition . Thus, for all intents and purposes, the stock distribution scheme under Sec. 31 of RA 6657 is no longer an available option under existing law. The question of whether or not it is unconstitutional should be a moot issue. (3) YES, the revocation of the HLIs SDP valid. [NO, the PARC did NOT gravely abuse its discretion in revoking the subject SDP and placing the hacienda under CARPs compulsory acquisition and distribution scheme.] The revocation of the approval of the SDP is valid: (1) the mechanics and timelines of HLIs stock distribution violate DAO 10 because the minimum individual allocation of each original FWB of 18,804.32 shares was diluted as a result of the use of man days and the hiring of additional farmworkers; (2) the 30-year timeframe for HLI-to-FWBs stock transfer is contrary to what Sec. 11 of DAO 10 prescribes. In our review and analysis of par. 3 of the SDOA on the mechanics and timelines of stock distribution, We find that it violates two (2) provisions of DAO 10. Par. 3 of the SDOA states: 3. At the end of each fiscal year, for a period of 30 years, the SECOND PARTY [HLI] shall arrange with the FIRST PARTY [TDC] the acquisition and distribution to the THIRD PARTY [FWBs] on the basis of number of days worked and at no cost to them of one-thirtieth (1/30) of 118,391,976.85 shares of the capital stock of the SECOND PARTY that are presently owned and held by the FIRST PARTY, until such time as the entire block of 118,391,976.85 shares shall have been completely acquired and distributed to the THIRD PARTY. [I]t is clear as day that the original 6,296 FWBs, who were qualified beneficiaries at the time of the approval of the SDP, suffered from watering down of shares . As determined earlier, each original FWB is entitled to 18,804.32 HLI shares. The original FWBs got less than the guaranteed 18,804.32 HLI shares per beneficiary, because the acquisition and distribution of the HLI shares were based on man days or number of days worked by the FWB in a years time. As explained by HLI, a beneficiary needs to work for at least 37 days in a fiscal year before he or she becomes entitled to HLI shares. If it falls below 37 days, the FWB, unfortunately, does not get any share at year end. The number of HLI shares distributed varies depending on the number of days the FWBs were allowed to work in one year. Worse, HLI hired farmworkers in addition to the original 6,296 FWBs, such that, as indicated in the Compliance dated August 2, 2010 submitted by HLI to the Court, the total number of farmworkers of HLI as of said date stood at 10,502. All these farmworkers, which include the original 6,296 FWBs, were given shares out of the 118,931,976.85 HLI shares representing the 33.296% of the total outstanding capital stock of HLI. Clearly, the minimum individual allocation of each original FWB of 18,804.32 shares was diluted as a result of the use of man days and the hiring of additional farmworkers. Going into another but related matter, par. 3 of the SDOA expressly providing for a 30-year timeframe for HLI-to-FWBs stock transfer is an arrangement contrary to what Sec. 11 of DAO 10 prescribes. Said Sec. 11 provides for the implementation of the approved stock distribution plan within three (3) months from receipt by the corporate landowner of the approval of the plan by PARC. In fact, based on the said provision, the transfer of the shares of stock in the names of the qualified FWBs should be recorded in the stock and transfer books and must be submitted to the SEC within sixty (60) days from implementation. To the Court, there is a purpose, which is at once discernible as it is practical, for the three-month threshold. Remove this timeline and the corporate landowner can veritably evade compliance with agrarian reform by simply deferring to absurd limits the implementation of the stock distribution scheme. Evidently, the land transfer beneficiaries are given thirty (30) years within which to pay the cost of the land thus awarded them to make it less cumbersome for them to pay the government. To be sure, the reason underpinning the 30-year accommodation does not apply to corporate landowners in distributing shares of stock to the qualified beneficiaries, as the shares may be issued in a much shorter period of time. Taking into account the above discussion, the revocation of the SDP by PARC should be upheld [because of violations of] DAO 10. It bears stressing that under Sec. 49 of RA 6657, the PARC and the DAR have the power to issue rules and regulations, substantive or procedural. Being a product of such rule-making power, DAO 10 has the force and effect of law and must be duly complied with. The PARC is, therefore, correct in revoking the SDP. Consequently, the PARC Resolution No. 89-12-2 dated November 21, l989 approving the HLIs SDP is nullified and voided. (4) YES, those portions of the converted land within Hacienda Luisita that RCBC and LIPCO acquired by purchase should be excluded from the coverage of the assailed PARC resolution. [T]here are two (2) requirements before one may be considered a purchaser in good faith, namely: (1) that the purchaser buys the property of another without notice that some other person has a right to or interest in such property; and (2) that the purchaser pays a full and fair price for the property at the time of such purchase or before he or she has notice of the claim of another. It can rightfully be said that both LIPCO and RCBC arebased on the above requirements and with respect to the adverted transactions of the converted land in questionpurchasers in good faith for value entitled to the benefits arising from such status.

First, at the time LIPCO purchased the entire three hundred (300) hectares of industrial land, there was no notice of any supposed defect in the title of its transferor, Centennary, or that any other person has a right to or interest in such property. In fact, at the time LIPCO acquired said parcels of land, only the following annotations appeared on the TCT in the name of Centennary: the Secretarys Certificate in favor of Teresita Lopa, the Secretarys Certificate in favor of Shintaro Murai, and the conversion of the property from agricultural to industrial and residential use. The same is true with respect to RCBC. At the time it acquired portions of Hacienda Luisita, only the following general annotations appeared on the TCTs of LIPCO: the Deed of Restrictions, limiting its use solely as an industrial estate; the Secretarys Certificate in favor of Koji Komai and Kyosuke Hori; and the Real Estate Mortgage in favor of RCBC to guarantee the payment of PhP 300 million. To be sure, intervenor RCBC and LIPCO knew that the lots they bought were subjected to CARP coverage by means of a stock distribution plan, as the DAR conversion order was annotated at the back of the titles of the lots they acquired. However, they are of the honest belief that the subject lots were validly converted to commercial or industrial purposes and for which said lots were taken out of the CARP coverage subject of PARC Resolution No. 89-12-2 and, hence, can be legally and validly acquired by them. After all, Sec. 65 of RA 6657 explicitly allows conversion and disposition of agricultural lands previously covered by CARP land acquisition after the lapse of five (5) years from its award when the land ceases to be economically feasible and sound for agricultural purposes or the locality has become urbanized and the land will have a greater economic value for residential, commercial or industrial purposes. Moreover, DAR notified all the affected parties, more particularly the FWBs, and gave them the opportunity to comment or oppose the proposed conversion. DAR, after going through the necessary processes, granted the conversion of 500 hectares of Hacienda Luisita pursuant to its primary jurisdiction under Sec. 50 of RA 6657 to determine and adjudicate agrarian reform matters and its original exclusive jurisdiction over all matters involving the implementation of agrarian reform. The DAR conversion order became final and executory after none of the FWBs interposed an appeal to the CA. In this factual setting, RCBC and LIPCO purchased the lots in question on their honest and well-founded belief that the previous registered owners could legally sell and convey the lots though these were previously subject of CARP coverage. Ergo, RCBC and LIPCO acted in good faith in acquiring the subject lots. And second, both LIPCO and RCBC purchased portions of Hacienda Luisita for value. Undeniably, LIPCO acquired 300 hectares of land from Centennary for the amount of PhP750 million pursuant to a Deed of Sale dated July 30, 1998. On the other hand, in a Deed of Absolute Assignment dated November 25, 2004, LIPCO conveyed portions of Hacienda Luisita in favor of RCBC by way of dacion en pago to pay for a loan of PhP431,695,732.10. In relying upon the above-mentioned approvals, proclamation and conversion order, both RCBC and LIPCO cannot be considered at fault for believing that certain portions of Hacienda Luisita are industrial/commercial lands and are, thus, outside the ambit of CARP. The PARC, and consequently DAR, gravely abused its discretion when it placed LIPCOs and RCBCs property which once formed part of Hacienda Luisita under the CARP compulsory acquisition scheme via the assailed Notice of Coverage. [The Court went on to apply the operative fact doctrine to determine what should be done in the aftermath of its disposition of the above-enumerated issues: While We affirm the revocation of the SDP on Hacienda Luisita subject of PARC Resolution Nos. 2005-32-01 and 2006-34-01, the Court cannot close its eyes to certain operative facts that had occurred in the interim. Pertinently, the operative fact doctrine realizes that, in declaring a law or executive action null and void, or, by extension, no longer without force and effect, undue harshness and resulting unfairness must be avoided. This is as it should realistically be, since rights might have accrued in favor of natural or juridical persons and obligations justly incurred in the meantime. The actual existence of a statute or executive act is, prior to such a determination, an operative fact and may have consequences which cannot justly be ignored; the past cannot always be erased by a new judicial declaration. While the assailed PARC resolutions effectively nullifying the Hacienda Luisita SDP are upheld, the revocation must, by application of the operative fact principle, give way to the right of the original 6,296 qualified FWBs to choose whether they want to remain as HLI stockholders or not. The Court cannot turn a blind eye to the fact that in 1989, 93% of the FWBs agreed to the SDOA (or the MOA), which became the basis of the SDP approved by PARC per its Resolution No. 89-12-2 dated November 21, 1989. From 1989 to 2005, the FWBs were said to have received from HLI salaries and cash benefits, hospital and medical benefits, 240-square meter homelots, 3% of the gross produce from agricultural lands, and 3% of the proceeds of the sale of the 500-hectare converted land and the 80.51-hectare lot sold to SCTEX. HLI shares totaling 118,391,976.85 were distributed as of April 22, 2005. On August 6, 20l0, HLI and private respondents submitted a Compromise Agreement, in which HLI gave the FWBs the option of acquiring a piece of agricultural land or remain as HLI stockholders, and as a matter of fact, most FWBs indicated their choice of remaining as stockholders. These facts and circumstances tend to indicate that some, if not all, of the FWBs may actually desire to continue as HLI shareholders. A matter best left to their own discretion.] [WHEREFORE, the instant petition is DENIED. PARC Resolution No. 2005-32-01 dated December 22, 2005 and Resolution No. 2006-34-01 dated May 3, 2006, placing the lands subject of HLIs SDP under compulsory coverage on mandated land acquisition scheme of the CARP, are hereby AFFIRMED with the MODIFICATION that the original 6,296 qualified FWBs shall have the option to remain as stockholders of HLI. DAR shall immediately schedule meetings with the said 6,296 FWBs and explain to them the effects, consequences and legal or practical implications of their choice, after which the FWBs will be asked to manifest, in secret voting, their choices in the ballot, signing their signatures or placing their thumbmarks, as the case may be, over their printed names.]

ROXAS & co. vs CA 321 scra 106 FACTS: This case involves three (3) haciendas in Nasugbu, Batangas owned by petitioner and the validity of the acquisition of these haciendas by the government under Republic Act No. 6657, the Comprehensive Agrarian Reform Law of 1988. Petitioner Roxas & Co. is a domestic corporation and is the registered owner of three haciendas, namely, Haciendas Palico, Banilad and Caylaway, all located in the Municipality of Nasugbu, Batangas. On July 27, 1987, the Congress of the Philippines formally convened and took over legislative power from the President. 2 This Congress passed Republic Act No. 6657, the Comprehensive Agrarian Reform Law (CARL) of 1988. The Act was signed by the President on June 10, 1988 and took effect on June 15, 1988. Before the law's effectivity, on May 6, 1988, petitioner filed with respondent DAR a voluntary offer to sell Hacienda Caylaway pursuant to the provisions of E.O. No. 229. Haciendas Palico and Banilad were later placed under compulsory acquisition by respondent DAR in accordance with the CARL. , petitioner applied with the DAR for conversion of Haciendas Palico and Banilad from agricultural to non-agricultural lands under the provisions of the CARL. 13 On July 14, 1993, petitioner sent a letter to the DAR Regional Director reiterating its request for conversion of the two haciendas. 14 Despite petitioner's application for conversion, respondent DAR proceeded with the acquisition of the two Haciendas. The LBP trust accounts as compensation for Hacienda Palico were replaced by respondent DAR with cash and LBP bonds. 15 On October 22, 1993, from the mother title of TCT No. 985 of the Hacienda, respondent DAR registered Certificate of Land Ownership Award (CLOA) No. 6654. On October 30, 1993, CLOA's were distributed to farmer beneficiaries. 16 On August 6, 1992, petitioner, through its President, Eduardo J. Roxas, sent a letter to the Secretary of respondent DAR withdrawing its VOS (voluntary offer to sell) of Hacienda Caylaway. The Sangguniang Bayan of Nasugbu, Batangas allegedly authorized the reclassification of Hacienda Caylaway from agricultural to nonagricultural. As a result, petitioner informed respondent DAR that it was applying for conversion of Hacienda Caylaway from agricultural to other uses. 34 In a letter dated September 28, 1992, respondent DAR Secretary informed petitioner that a reclassification of the land would not exempt it from agrarian reform. Respondent Secretary also denied petitioner's withdrawal of the VOS on the ground that withdrawal could only be based on specific grounds such as unsuitability of the soil for agriculture, or if the slope of the land is over 18 degrees and that the land is undeveloped. 35 Despite the denial of the Voluntary Offer to sell withdrawal of Hacienda Caylaway, on May 11, 1993, petitioner filed its application for conversion of both Haciendas Palico and Banilad. , through its President, Eduardo Roxas, reiterated its request to withdraw the VOS over Hacienda Caylaway in light of the following: 1) Certification issued by Conrado I. Gonzales, Officer-in-Charge, Department of Agriculture, Region 4, 4th Floor, ATI (BA) Bldg., Diliman, Quezon City dated March 1, 1993 stating that the lands subject of referenced titles "are not feasible and economically sound for further agricultural development. 2) Resolution No. 19 of the Sangguniang Bayan of Nasugbu, Batangas approving the Zoning Ordinance reclassifying areas covered by the referenced titles to non-agricultural which was enacted after extensive consultation with government agencies, including [the Department of Agrarian Reform], and the requisite public hearings.

3) Resolution No. 106 of the Sangguniang Panlalawigan of Batangas dated March 8, 1993 approving the Zoning Ordinance enacted by the Municipality of Nasugbu. 4) Letter dated December 15, 1992 issued by Reynaldo U. Garcia of the Municipal Planning & Development, Coordinator and Deputized Zoning Administrator addressed to Mrs. Alicia P. Logarta advising that the Municipality of Nasugbu, Batangas has no objection to the conversion of the lands subject of referenced titles to non-agricultural. 37 Petitioner alleged that the Municipality of Nasugbu, where the haciendas are located, had been declared a tourist zone, that the land is not suitable for agricultural production, and that the Sangguniang Bayan of Nasugbu had reclassified the land to non-agricultural. . Petitioner urges the Court to take cognizance of the conversion proceedings and rule accordingly

ISSUE: WON the courts are in a better position to resolve petitioner's application for conversion of land. HELD : NO. matter
91

Respondent DAR is in a better position to resolve petitioner's application for conversion, being primarily the agency possessing the necessary expertise on the

The DAR's mandate over applications for conversion was first laid down in Section 4 (j) and Section 5 (l) of Executive Order No. 129-A, Series of 1987 and reiterated in the CARL and Memorandum Circular No. 54, Series of 1993 of the Office of the President. The DAR's jurisdiction over applications for conversion is provided as follows: A. The Department of Agrarian Reform (DAR) is mandated to "approve or disapprove applications for conversion, restructuring or readjustment of agricultural lands into nonagricultural uses," pursuant to Section 4 (j) of Executive Order No. 129-A, Series of 1987. B. Sec. 5 (l) of E.O. 129-A, Series of 1987, vests in the DAR, exclusive authority to approve or disapprove applications for conversion of agricultural lands for residential, commercial, industrial and other land uses. C. Sec. 65 of R.A. No. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988, likewise empowers the DAR to authorize under certain conditions, the conversion of agricultural lands. D. Sec. 4 of Memorandum Circular No. 54, Series of 1993 of the Office of the President, provides that "action on applications for land use conversion on individual landholdings shall remain as the responsibility of the DAR, which shall utilize as its primary reference, documents on the comprehensive land use plans and accompanying ordinances passed upon and approved by the local government units concerned, together with the National Land Use Policy, pursuant to R.A. No. 6657 and E.O. No. 129-A.
87

Applications for conversion were initially governed by DAR A.O. No. 1, Series of 1990 entitled "Revised Rules and Regulations Governing Conversion of Private Agricultural Lands and Non-Agricultural Uses," and DAR A.O. No. 2, Series of 1990 entitled "Rules of Procedure Governing the Processing and Approval of Applications for Land Use Conversion." These A.O.'s and other implementing guidelines, including Presidential issuances and national policies related to land use conversion have been consolidated in DAR A.O. No. 07, Series of 1997. Under this recent issuance, the guiding principle in land use conversion is: to preserve prime agricultural lands for food production while, at the same time, recognizing the need of the other sectors of society (housing, industry and commerce) for land, when coinciding with the objectives of the Comprehensive Agrarian Reform Law to promote social justice, industrialization and the optimum use of land as a national resource for public welfare. 88 "Land Use" refers to the manner of utilization of land, including its allocation, development and management. "Land Use Conversion" refers to the act or process of changing the current use of a piece of agricultural land into some other use as approved by the DAR. 89 The conversion of agricultural land to uses other than agricultural requires field investigation and conferences with the occupants of the land. They involve factual findings and highly technical matters within the special training and expertise of the DAR. DAR A.O. No. 7, Series of 1997 lays down with specificity how the DAR must go about its task. This time, the field investigation is not conducted by the MARO but by a special task force, known as the Center for Land Use Policy Planning and Implementation (CLUPPI-DAR Central Office). The procedure is that once an application for conversion is filed, the CLUPPI prepares the Notice of Posting. The MARO only posts the notice and thereafter issues a certificate to the fact of posting. The CLUPPI conducts the field investigation and dialogues with the applicants and the farmer beneficiaries to ascertain the information necessary for the processing of the application. The Chairman of the CLUPPI deliberates on the merits of the investigation report and recommends the appropriate action. This recommendation is transmitted to the Regional Director, thru the Undersecretary, or Secretary of Agrarian Reform. Applications involving more than fifty hectares are approved or disapproved by the Secretary. The procedure does not end with the Secretary, however. The Order provides that the decision of the Secretary may be appealed to the Office of the President or the Court of Appeals, as the case may be, viz: Appeal from the decision of the Undersecretary shall be made to the Secretary, and from the Secretary to the Office of the President or the Court of Appeals as the case may be. The mode of appeal/motion for reconsideration, and the appeal fee, from Undersecretary to the Office of the Secretary shall be the same as that of the Regional Director to the Office of the Secretary. 90 Indeed, the doctrine of primary jurisdiction does not warrant a court to arrogate unto itself authority to resolve a controversy the jurisdiction over which is initially lodged with an administrative body of special competence. 91 Respondent DAR is in a better position to resolve petitioner's application for conversion, being primarily the agency possessing the necessary expertise on the matter. The power to determine whether Haciendas Palico, Banilad and Caylaway are non-agricultural, hence, exempt from the coverage of the CARL lies with the DAR, not with this Court.

Association Of Small Landowners Vs. Secretary Of DAR Case Digest 175 SCRA 343 G.R. No. L-78742 July 14, 1989

Facts: Several petitions are the root of the case: a. b. c. A petition alleging the constitutionality of PD No. 27, EO 228 and 229 and RA 6657. Subjects of the petition are a 9-hectare and 5 hectare Riceland worked by four tenants. Tenants were declared full owners by EO 228 as qualified farmers under PD 27. The petitioners now contend that President Aquino usurped the legislatures power. A petition by landowners and sugarplanters in Victorias Mill Negros Occidental against Proclamation 131 and EO 229. Proclamation 131 is the creation of Agrarian Reform Fund with initial fund of P50Billion. A petition by owners of land which was placed by the DAR under the coverage of Operation Land Transfer.

d.

A petition invoking the right of retention under PD 27 to owners of rice and corn lands not exceeding seven hectares. Issue: Whether or Not the aforementioned EOs, PD, and RA were constitutional. Held: The promulgation of PD 27 by President Marcos was valid in exercise of Police power and eminent domain. The power of President Aquino to promulgate Proc. 131 and EO 228 and 229 was authorized under Sec. 6 of the Transitory Provisions of the 1987 Constitution. Therefore it is a valid exercise of Police Power and Eminent Domain. RA 6657 is likewise valid. The carrying out of the regulation under CARP becomes necessary to deprive 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 and the physical possession of said excess and all beneficial rights accruing to the owner in favour of the farmer. A statute may be sustained under the police power only if there is concurrence of the lawful subject and the method. Subject and purpose of the Agrarian Reform Law is valid, however what is to be determined is the method employed to achieve it.

DAR vs. Dela Sutton

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.
[4]

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. 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 Order [7] 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 appeal [9] 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 Reforms 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. Petitioners 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. DAR [16] 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 the conversion 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. [20] No. 7881 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.

MILESTONE FARMS, INC., petitioner, vs. OFFICE OF THE PRESIDENT, respondent. NACHURA, J.:

Before this Court is a Petition for Review on Certiorari[1] under Rule 45 of the Rules of Civil Procedure, seeking the reversal of the Court of Appeals (CA) Amended Decision[2] dated October 4, 2006 and its Resolution[3] dated March 27, 2008.

The Facts Petitioner Milestone Farms, Inc. (petitioner) was incorporated with the Securities and Exchange Commission on January 8, 1960. [4] Among its pertinent secondary purposes are: (1) to engage in the raising of cattle, pigs, and other livestock; to acquire lands by purchase or lease, which may be needed for this purpose; and to sell and otherwise dispose of said cattle, pigs, and other livestock and their produce when advisable and beneficial to the corporation; (2) to breed, raise, and sell poultry; to purchase or acquire and sell, or otherwise dispose of the supplies, stocks, equipment, accessories, appurtenances, products, and by-products of said business; and (3) to import cattle, pigs, and other livestock, and animal food necessary for the raising of said cattle, pigs, and other livestock as may be authorized by law.[5] On June 10, 1988, a new agrarian reform law, Republic Act (R.A.) No. 6657, otherwise known as the Comprehensive Agrarian Reform Law (CARL), took effect, which included the raising of livestock, poultry, and swine in its coverage. However, on December 4, 1990, this Court, sitting en banc, ruled in Luz Farms v. Secretary of the Department of Agrarian [6] Reform that agricultural lands devoted to livestock, poultry, and/or swine raising are excluded from the Comprehensive Agrarian Reform Program (CARP). Thus, in May 1993, petitioner applied for the exemption/exclusion of its 316.0422-hectare property, covered by Transfer Certificate of Title Nos. (T-410434) M-15750, (T-486101) M7307, (T-486102) M-7308, (T-274129) M-15751, (T-486103) M-7309, (T-486104) M-7310, (T-332694) M-15755, (T-486105) M-7311, (T-486106) M-7312, M-8791, (T-486107) M-7313, (T-486108) M-7314, M-8796, (T-486109) M-7315, (T-486110) M-9508, and M-6013, and located in Pinugay, Baras, Rizal, from the coverage of the CARL, pursuant to the aforementioned ruling of this Court in Luz Farms.

Meanwhile, on December 27, 1993, the Department of Agrarian Reform (DAR) issued Administrative Order No. 9, Series of 1993 (DAR A.O. No. 9), setting forth rules and regulations to govern the exclusion of agricultural lands used for livestock, poultry, and swine raising from CARP coverage. Thus, on January 10, 1994, petitioner re-documented its application pursuant to DAR A.O. No. 9.[7]

Acting on the said application, the DARs Land Use Conversion and Exemption Committee (LUCEC) of Region IV conducted an ocular inspection on petitioners property and arrived at the following findings: [T]he actual land utilization for livestock, swine and poultry is 258.8422 hectares; the area which served as infrastructure is 42.0000 hectares; ten (10) hectares are planted to corn and the remaining five (5) hectares are devoted to fish culture; that the livestock population are 371 heads of cow, 20 heads of horses, 5,678 heads of swine and 788 heads of cocks; that the area being applied for exclusion is far below the required or ideal area which is 563 hectares for the total livestock population; that the approximate area not directly used for livestock purposes with an area of 15 hectares, more or less, is likewise far below the allowable 10% variance; and, though not directly used for livestock purposes, the ten (10) hectares planted to sweet corn and the five (5) hectares devoted to fishpond could be considered supportive to livestock production. The LUCEC, thus, recommended the exemption of petitioners 316.0422-hectare property from the coverage of CARP. Adopting the LUCECs findings and recommendation, DAR Regional Director Percival Dalugdug (Director Dalugdug) issued an Order dated June 27, 1994, exempting petitioners 316.0422-hectare property from CARP. [8] The Southern Pinugay Farmers Multi-Purpose Cooperative, Inc. (Pinugay Farmers), represented by Timiano Balajadia, Sr. (Balajadia), moved for the reconsideration of the said Order, but the same was denied by Director Dalugdug in his Order dated November 24, 1994.[9] Subsequently, the Pinugay Farmers filed a letter-appeal with the DAR Secretary. Correlatively, on June 4, 1994, petitioner filed a complaint for Forcible Entry against Balajadia and company before the Municipal Circuit Trial Court (MCTC) of Teresa-Baras, Rizal, docketed as Civil Case No. 781-T. [10] The MCTC ruled in favor of petitioner, but the decision was later reversed by the Regional Trial Court, Branch 80, of Tanay, Rizal. Ultimately, the case reached the CA, which, in its Decision [11] dated October 8, 1999, reinstated the MCTCs ruling, ordering Balajadia and all defendants therein to vacate portions of the property covered by TCT Nos. M-6013, M-8796, and M-8791. In its Resolution [12] dated July 31, 2000, the CA held that the defendants therein failed to timely file a motion for reconsideration, given the fact that their counsel of record received its October 8, 1999 Decision; hence, the same became final and executory.

In the meantime, R.A. No. 6657 was amended by R.A. No. 7881, [13] which was approved on February 20, 1995. Private agricultural lands devoted to livestock, poultry, and swine raising were excluded from the coverage of the CARL. On October 22, 1996, the fact-finding team formed by the DAR Undersecretary for Field Operations and Support Services conducted an actual headcount of the livestock population on the property. The headcount showed that there were 448 heads of cattle and more than 5,000 heads of swine. The DAR Secretarys Ruling On January 21, 1997, then DAR Secretary Ernesto D. Garilao (Secretary Garilao) issued an Order exempting from CARP only 240.9776 hectares of the 316.0422 hectares previously exempted by Director Dalugdug, and declaring 75.0646 hectares of the property to be covered by CARP.[14] Secretary Garilao opined that, for private agricultural lands to be excluded from CARP, they must already be devoted to livestock, poultry, and swine raising as of June 15, 1988, when the CARL took effect. He found that the Certificates of Ownership of Large Cattle submitted by petitioner showed that only 86 heads of cattle were registered in the name of petitioners president, Misael Vera, Jr., prior to June 15, 1988; 133 were subsequently bought in 1990, while 204 were registered from 1992 to 1995. Secretary Garilao gave more weight to the certificates rather than to the headcount because the same explicitly provide for the number of cattle owned by petitioner as of June 15, 1988. Applying the animal-land ratio (1 hectare for grazing for every head of cattle/carabao/horse) and the infrastructure-animal ratio (1.7815 hectares for 21 heads of cattle/carabao/horse, and 0.5126 hectare for 21 heads of hogs) under DAR A.O. No. 9, Secretary Garilao exempted 240.9776 hectares of the property, as follows: 1. 86 hectares for the 86 heads of cattle existing as of 15 June 1988; 2. 8 hectares for infrastructure following the ratio of 1.7815 hectares for every 21 heads of cattle; 3. 4. 5. 8 hectares for the 8 horses; 0.3809 square meters of infrastructure for the 8 horses; [and] 138.5967 hectares for the 5,678 heads of swine.[15]

Petitioner filed a Motion for Reconsideration, [16] submitting therewith copies of Certificates of Transfer of Large Cattle and additional Certificates of Ownership of Large Cattle issued to petitioner prior to June 15, 1988, as additional proof that it had met the required animal-land ratio. Petitioner also submitted a copy of a Disbursement Voucher dated December 17, 1986, showing the purchase of 100 heads of cattle by the Bureau of Animal Industry from petitioner, as further proof that it had been actively operating a livestock farm even before June 15, 1988. However, in his Order dated April 15, 1997, Secretary Garilao denied petitioners Motion for Reconsideration. [17] Aggrieved, petitioner filed its Memorandum on Appeal[18] before the Office of the President (OP). The OPs Ruling On February 4, 2000, the OP rendered a decision [19] reinstating Director Dalugdugs Order dated June 27, 1994 and declared the entire 316.0422-hectare property exempt from the coverage of CARP. However, on separate motions for reconsideration of the aforesaid decision filed by farmer-groups Samahang Anak-Pawis ng Lagundi (SAPLAG) and Pinugay Farmers, and the Bureau of Agrarian Legal Assistance of DAR, the OP issued a resolution [20] dated September 16, 2002, setting aside its previous decision. The dispositive portion of the OP resolution reads: WHEREFORE, the Decision subject of the instant separate motions for reconsideration is hereby SET ASIDE and a new one entered REINSTATING the Order dated 21 January 1997 of then DAR Secretary Ernesto D. Garilao, as reiterated in another Order of 15 April 1997, without prejudice to the outcome of the continuing review and verification proceedings that DAR, thru the appropriate Municipal Agrarian Reform Officer, may undertake pursuant to Rule III (D) of DAR Administrative Order No. 09, series of 1993. SO ORDERED.[21] The OP held that, when it comes to proof of ownership, the reference is the Certificate of Ownership of Large Cattle. Certificates of cattle ownership, which are readily available being issued by the appropriate government office ought to match the number of heads of cattle counted as existing during the actual headcount. The presence of large cattle on the land, without sufficient proof of ownership thereof, only proves such presence. Taking note of Secretary Garilaos observations, the OP also held that, before an ocular investigation is conducted on the property, the landowners are notified in advance; hence, mere reliance on the physical headcount is dangerous because there is a possibility that the landowners would increase the number of their cattle for headcount purposes only. The OP observed that there was a big variance between the actual headcount of 448 heads of cattle and only 86 certificates of ownership of large cattle. Consequently, petitioner sought recourse from the CA.[22]

The Proceedings Before the CA and Its Rulings On April 29, 2005, the CA found that, based on the documentary evidence presented, the property subject of the application for exclusion had more than satisfied the animal-land and infrastructure-animal ratios under DAR A.O. No. 9. The CA also found that petitioner applied for exclusion long before the effectivity of DAR A.O. No. 9, thus, negating the claim that petitioner merely converted the property for livestock, poultry, and swine raising in order to exclude it from CARP coverage. Petitioner was held to have actually engaged in the said business on the property even before June 15, 1988. The CA disposed of the case in this wise: WHEREFORE, the instant petition is hereby GRANTED. The assailed Resolution of the Office of the President dated September 16, 2002 is hereby SET ASIDE, and itsDecision dated February 4, 2000 declaring the entire 316.0422 hectares exempt from the coverage of the Comprehensive Agrarian Reform Program is hereby REINSTATED without prejudice to the outcome of the continuing review and verification proceedings which the Department of Agrarian Reform, through the proper Municipal Agrarian Reform Officer, may undertake pursuant to Policy Statement (D) of DAR Administrative Order No. 9, Series of 1993. SO ORDERED.[23] Meanwhile, six months earlier, or on November 4, 2004, without the knowledge of the CA as the parties did not inform the appellate court then DAR Secretary Rene C. Villa (Secretary Villa) issued DAR Conversion Order No. CON-0410-0016 [24] (Conversion Order), granting petitioners application to convert portions of the 316.0422-hectare property from agricultural to residential and golf courses use. The portions converted with a total area of 153.3049 hectares were covered by TCT Nos. M-15755 (T-332694), M-15751 (T-274129), and M-15750 (T-410434). With this Conversion Order, the area of the property subject of the controversy was effectively reduced to 162.7373 hectares. On the CAs decision of April 29, 2005, Motions for Reconsideration were filed by farmer-groups, namely: the farmers represented by Miguel Espinas [25](Espinas group), the Pinugay Farmers,[26] and the SAPLAG.[27] The farmer-groups all claimed that the CA should have accorded respect to the factual findings of the OP. Moreover, the farmer-groups unanimously intimated that petitioner already converted and developed a portion of the property into a leisure-residential-commercial estate known as the Palo Alto Leisure and Sports Complex (Palo Alto). Subsequently, in a Supplement to the Motion for Reconsideration on Newly Secured Evidence pursuant to DAR Administrative Order No. 9, Series of 1993 [28](Supplement) dated June 15, 2005, the Espinas group submitted the following as evidence: 1) Conversion Order[29] dated November 4, 2004, issued by Secretary Villa, converting portions of the property from agricultural to residential and golf courses use, with a total area of 153.3049 hectares; thus, the Espinas group prayed that the remaining 162.7373 hectares (subject property) be covered by the CARP; 2) Letter[30] dated June 7, 2005 of both incoming Municipal Agrarian Reform Officer (MARO) Bismark M. Elma (MARO Elma) and outgoing MARO Cesar C. Celi (MARO Celi) of Baras, Rizal, addressed to Provincial Agrarian Reform Officer (PARO) II of Rizal, Felixberto Q. Kagahastian, (MARO Report), informing the latter, among others, that Palo Alto was already under development and the lots therein were being offered for sale; that there were actual tillers on the subject property; that there were agricultural improvements thereon, including an irrigation system and road projects funded by the Government; that there was no existing livestock farm on the subject property; and that the same was not in the possession and/or control of petitioner; and 3) Certification[31] dated June 8, 2005, issued by both MARO Elma and MARO Celi, manifesting that the subject property was in the possession and cultivation of actual occupants and tillers, and that, upon inspection, petitioner maintained no livestock farm thereon. Four months later, the Espinas group and the DAR filed their respective Manifestations. [32] In its Manifestation dated November 29, 2005, the DAR confirmed that the subject property was no longer devoted to cattle raising. Hence, in its Resolution [33] dated December 21, 2005, the CA directed petitioner to file its comment on the Supplement and the aforementioned Manifestations. Employing the services of a new counsel, petitioner filed a Motion to Admit Rejoinder, [34] and prayed that the MARO Report be disregarded and expunged from the records for lack of factual and legal basis. With the CA now made aware of these developments, particularly Secretary Villas Conversion Order of November 4, 2004, the appellate court had to acknowledge that the property subject of the controversy would now be limited to the remaining 162.7373 hectares. In the same token, the Espinas group prayed that this remaining area be covered by the CARP.[35] On October 4, 2006, the CA amended its earlier Decision. It held that its April 29, 2005 Decision was theoretically not final because DAR A.O. No. 9 required the MARO to make a continuing review and verification of the subject property. While the CA was cognizant of our ruling in Department of Agrarian Reform v. Sutton,[36] wherein we declared DAR A.O. No. 9 as unconstitutional, it still resolved to lift the exemption of the subject property from the CARP, not on the basis of DAR A.O. No. 9, but on the strength of evidence such as the MARO Report and Certification, and the Katunayan[37] issued by the Punong Barangay, Alfredo Ruba (Chairman Ruba), of Pinugay, Baras, Rizal, showing that the subject property was no longer operated as a livestock farm. Moreover, the CA held that the lease agreements, [38] which petitioner submitted to prove that it was compelled to lease a ranch as temporary shelter for its cattle, only reinforced the DARs finding that there was indeed no existing livestock farm on the subject property. While petitioner claimed that it was merely forced to do so to prevent further slaughtering of its cattle allegedly committed by the occupants, the CA found the claim unsubstantiated. Furthermore, the CA opined that petitioner should have asserted its rights when the irrigation and road projects were introduced by the Government within its property. Finally, the CA accorded the findings of MARO Elma and MARO Celi the presumption of regularity in the performance of official functions in the absence of evidence proving misconduct and/or dishonesty when they inspected the subject property and rendered their report. Thus, the CA disposed: WHEREFORE, this Courts Decision dated April 29, 2005 is hereby amended in that the exemption of the subject landholding from the coverage of the Comprehensive Agrarian Reform Program is hereby lifted, and the 162.7373 hectare-agricultural portion thereof is hereby declared covered by the Comprehensive Agrarian Reform Program. SO ORDERED.[39] Unperturbed, petitioner filed a Motion for Reconsideration. [40] On January 8, 2007, MARO Elma, in compliance with the Memorandum of DAR Regional Director Dominador B. Andres, tendered another Report[41] reiterating that, upon inspection of the subject property, together with petitioners counsel-turned witness, Atty. Grace Eloisa J. Que (Atty. Que), PARO Danilo M. Obarse, Chairman Ruba, and several occupants thereof, he, among others, found no livestock farm within the subject property. About 43 heads of cattle were shown, but MARO Elma observed that the same were inside an area adjacent to Palo Alto. Subsequently, upon Atty. Ques request for reinvestigation, designated personnel of the DAR Provincial and Regional Offices (Investigating Team) conducted another ocular inspection on the subject property on February 20, 2007. The Investigating Team, in its Report [42] dated February 21, 2007, found that, per testimony of petitioners caretaker, Rogelio Ludivices (Roger), [43] petitioner has 43 heads of cattle taken care of by the following individuals: i) Josefino Custodio (Josefino) 18 heads; ii) Andy Amahit 15 heads; and iii) Bert Pangan 2 heads; that these individuals pastured the herd of cattle outside the subject property, while Roger took care of 8 heads of cattle inside the Palo Alto area; that 21 heads of cattle owned by petitioner were seen in the area adjacent to Palo Alto; that Josefino confirmed to the Investigating Team that he takes care of 18 heads of cattle owned by petitioner; that the said Investigating Team saw 9 heads of cattle in the Palo Alto area, 2 of which bore MFI marks; and that the 9 heads of cattle appear to have matched the Certificates of Ownership of Large Cattle submitted by petitioner. Because of the contentious factual issues and the conflicting averments of the parties, the CA set the case for hearing and reception of evidence on April 24, 2007. [44] Thereafter, as narrated by the CA, the following events transpired: On May 17, 2007, [petitioner] presented the Judicial Affidavits of its witnesses, namely, [petitioners] counsel, [Atty. Que], and the alleged caretaker of [petitioners] farm, [Roger], who were both cross-examined by counsel for farmers-movants and SAPLAG. [Petitioner] and SAPLAG then marked their documentary exhibits. On May 24, 2007, [petitioners] security guard and third witness, Rodolfo G. Febrada, submitted his Judicial Affidavit and was cross-examined by counsel for fa[r]mers-movants and SAPLAG. Farmers-movants also marked their documentary exhibits.

Thereafter, the parties submitted their respective Formal Offers of Evidence. Farmers-movants and SAPLAG filed their objections to [petitioners] Formal Offer of Evidence. Later, [petitioner] and farmers-movants filed their respective Memoranda. In December 2007, this Court issued a Resolution on the parties offer of evidence and considered [petitioners] Motion for Reconsideration submitted for resolution.[45] Finally, petitioners motion for reconsideration was denied by the CA in its Resolution [46] dated March 27, 2008. The CA discarded petitioners reliance on Sutton. It ratiocinated that the MARO Reports and the DARs Manifestation could not be disregarded simply because DAR A.O. No. 9 was declared unconstitutional. The Sutton ruling was premised on the fact that the Sutton property continued to operate as a livestock farm. The CA also reasoned that, in Sutton, this Court did not remove from the DAR the power to implement the CARP, pursuant to the latters authority to oversee the implementation of agrarian reform laws under Section 50[47]of the CARL. Moreover, the CA found: Petitioner-appellant claimed that they had 43 heads of cattle which are being cared for and pastured by 4 individuals. To prove its ownership of the said cattle, petitioner-appellant offered in evidence 43 Certificates of Ownership of Large Cattle. Significantly, however, the said Certificates were all dated and issued on November 24, 2006, nearly 2 months after this Court rendered its Amended Decision lifting the exemption of the 162-hectare portion of the subject landholding. The acquisition of such cattle after the lifting of the exemption clearly reveals that petitioner-appellant was no longer operating a livestock farm, and suggests an effort to create a semblance of livestock-raising for the purpose of its Motion for Reconsideration.[48] On petitioners assertion that between MARO Elmas Report dated January 8, 2007 and the Investigating Teams Report, the latter should be given credence, the CA held that there were no material inconsistencies between the two reports because both showed that the 43 heads of cattle were found outside the subject property. Hence, this Petition assigning the following errors: I. THE HONORABLE COURT OF APPEALS GRAVELY ERRED WHEN IT HELD THAT LANDS DEVOTED TO LIVESTOCK FARMING WITHIN THE MEANING OF LUZ FARMS AND SUTTON, AND WHICH ARE THEREBY EXEMPT FROM CARL COVERAGE, ARE NEVERTHELESS SUBJECT TO DARS CONTINUING VERIFICATION AS TO USE, AND, ON THE BASIS OF SUCH VERIFICATION, MAY BE ORDERED REVERTED TO AGRICULTURAL CLASSIFICATION AND COMPULSORY ACQUISITION[;] II. GRANTING THAT THE EXEMPT LANDS AFORESAID MAY BE SO REVERTED TO AGRICULTURAL CLASSIFICATION, STILL THE PROCEEDINGS FOR SUCH PURPOSE BELONGS TO THE EXCLUSIVE ORIGINAL JURISDICTION OF THE DAR, BEFORE WHICH THE CONTENDING PARTIES MAY VENTILATE FACTUAL ISSUES, AND AVAIL THEMSELVES OF USUAL REVIEW PROCESSES, AND NOT TO THE COURT OF APPEALS EXERCISING APPELLATE JURISDICTION OVER ISSUES COMPLETELY UNRELATED TO REVERSION [; AND] III. IN ANY CASE, THE COURT OF APPEALS GRAVELY ERRED AND COMMITTED GRAVE ABUSE OF DISCRETION WHEN IT HELD THAT THE PROPERTY IN DISPUTE IS NO LONGER BEING USED FOR LIVESTOCK FARMING. [49] Petitioner asseverates that lands devoted to livestock farming as of June 15, 1988 are classified as industrial lands, hence, outside the ambit of the CARP; that Luz Farms, Sutton, and R.A. No. 7881 clearly excluded such lands on constitutional grounds; that petitioners lands were actually devoted to livestock even before the enactment of the CARL; that livestock farms are exempt from the CARL, not by reason of any act of the DAR, but because of their nature as industrial lands; that petitioners property was admittedly devoted to livestock farming as of June 1988 and the only issue before was whether or not petitioners pieces of evidence comply with the ratios provided under DAR A.O. No. 9; and that DAR A.O. No. 9 having been declared as unconstitutional, DAR had no more legal basis to conduct a continuing review and verification proceedings over livestock farms. Petitioner argues that, in cases where reversion of properties to agricultural use is proper, only the DAR has the exclusive original jurisdiction to hear and decide the same; hence, the CA, in this case, committed serious errors when it ordered the reversion of the property and when it considered pieces of evidence not existing as of June 15, 1988, despite its lack of jurisdiction; that the CA should have remanded the case to the DAR due to conflicting factual claims; that the CA cannot ventilate allegations of fact that were introduced for the first time on appeal as a supplement to a motion for reconsideration of its first decision, use the same to deviate from the issues pending review, and, on the basis thereof, declare exempt lands reverted to agricultural use and compulsorily covered by the CARP; that the newly discovered [pieces of] evidence were not introduced in the proceedings before the DAR, hence, it was erroneous for the CA to consider them; and that piecemeal presentation of evidence is not in accord with orderly justice. Finally, petitioner submits that, in any case, the CA gravely erred and committed grave abuse of discretion when it held that the subject property was no longer used for livestock farming as shown by the Report of the Investigating Team. Petitioner relies on the 1997 LUCEC and DAR findings that the subject property was devoted to livestock farming, and on the 1999 CA Decision which held that the occupants of the property were squatters, bereft of any authority to stay and possess the property. [50] On one hand, the farmer-groups, represented by the Espinas group, contend that they have been planting rice and fruit-bearing trees on the subject property, and helped the National Irrigation Administration in setting up an irrigation system therein in 1997, with a produce of 1,500 to 1,600 sacks of palay each year; that petitioner came to court with unclean hands because, while it sought the exemption and exclusion of the entire property, unknown to the CA, petitioner surreptitiously filed for conversion of the property now known as Palo Alto, which was actually granted by the DAR Secretary; that petitioners bad faith is more apparent since, despite the conversion of the 153.3049-hectare portion of the property, it still seeks to exempt the entire property in this case; and that the fact that petitioner applied for conversion is an admission that indeed the property is agricultural. The farmer-groups also contend that petitioners reliance on Luz Farms and Sutton is unavailing because in these cases there was actually no cessation of the business of raising cattle; that what is being exempted is the activity of raising cattle and not the property itself; that exemptions due to cattle raising are not permanent; that the declaration of DAR A.O. No. 9 as unconstitutional does not at all diminish the mandated duty of the DAR, as the lead agency of the Government, to implement the CARL; that the DAR, vested with the power to identify lands subject to CARP, logically also has the power to identify lands which are excluded and/or exempted therefrom; that to disregard DARs authority on the matter would open the floodgates to abuse and fraud by unscrupulous landowners; that the factual finding of the CA that the subject property is no longer a livestock farm may not be disturbed on appeal, as enunciated by this Court; that DAR conducted a review and monitoring of the subject property by virtue of its powers under the CARL; and that the CA has sufficient discretion to admit evidence in order that it could arrive at a fair, just, and equitable ruling in this case.
[51]

On the other hand, respondent OP, through the Office of the Solicitor General (OSG), claims that the CA correctly held that the subject property is not exempt from the coverage of the CARP, as substantial pieces of evidence show that the said property is not exclusively devoted to livestock, swine, and/or poultry raising; that the issues presented by petitioner are factual in nature and not proper in this case; that under Rule 43 of the 1997 Rules of Civil Procedure, questions of fact may be raised by the parties and resolved by the CA; that due to the divergence in the factual findings of the DAR and the OP, the CA was duty bound to review and ascertain which of the said findings are duly supported by substantial evidence; that the subject property was subject to continuing review and verification proceedings due to the then prevailing DAR A.O. No. 9; that there is no question that the power to determine if a property is subject to CARP coverage lies with the DAR Secretary; that pursuant to such power, the MARO rendered the assailed reports and certification, and the DAR itself manifested before the CA that the subject property is no longer devoted to livestock farming; and that, while it is true that this Courts ruling in Luz Farms declared that agricultural lands devoted to livestock, poultry, and/or swine raising are excluded from the CARP, the said ruling is not without any qualification. [52] In its Reply[53] to the farmer-groups and to the OSGs comment, petitioner counters that the farmer-groups have no legal basis to their claims as they admitted that they entered the subject property without the consent of petitioner; that the rice plots actually found in the subject property, which were subsequently taken over by squatters, were, in fact, planted by petitioner in compliance with the directive of then President Ferdinand Marcos for the employer to provide rice to its employees; that when a land is declared exempt from the CARP on the ground that it is not agricultural as of the time the CARL took effect, the use and disposition of that land is entirely and forever beyond DARs jurisdiction; and that, inasmuch as the subject property was not agricultural from the very beginning, DAR has no power to regulate the same. Petitioner also asserts that the CA cannot uncharacteristically assume the role of trier of facts and resolve factual questions not previously adjudicated by the lower tribunals; that MARO Elma rendered the assailed MARO reports with bias against petitioner, and the same were contradicted by the Investigating Teams Report, which confirmed that the subject property is still devoted to livestock farming; and that there has been no change in petitioners business interest as an entity engaged in livestock farming since its inception in 1960, though there was admittedly a decline in the scale of its operations due to the illegal acts of the squatter-occupants.

Our Ruling The Petition is bereft of merit. Let it be stressed that when the CA provided in its first Decision that continuing review and verification may be conducted by the DAR pursuant to DAR A.O. No. 9, the latter was not yet declared unconstitutional by this Court. The first CA Decision was promulgated on April 29, 2005, while this Court struck down as unconstitutional DAR A.O. No. 9, by way of Sutton, on October 19, 2005. Likewise, let it be emphasized that the Espinas group filed the Supplement and submitted the assailed MARO reports and certification on June 15, 2005, which proved to be adverse to petitioners case. Thus, it could not be said that the CA erred or gravely abused its discretion in respecting the mandate of DAR A.O. No. 9, which was then subsisting and in full force and effect.

While it is true that an issue which was neither alleged in the complaint nor raised during the trial cannot be raised for the first time on appeal as it would be offensive to the basic rules of fair play, justice, and due process, [54] the same is not without exception, [55] such as this case. The CA, under Section 3, [56] Rule 43 of the Rules of Civil Procedure, can, in the interest of justice, entertain and resolve factual issues. After all, technical and procedural rules are intended to help secure, and not suppress, substantial justice. A deviation from a rigid enforcement of the rules may thus be allowed to attain the prime objective of dispensing justice, for dispensation of justice is the core reason for the existence of courts. [57] Moreover, petitioner cannot validly claim that it was deprived of due process because the CA afforded it all the opportunity to be heard. [58] The CA even directed petitioner to file its comment on the Supplement, and to prove and establish its claim that the subject property was excluded from the coverage of the CARP. Petitioner actively participated in the proceedings before the CA by submitting pleadings and pieces of documentary evidence, such as the Investigating Teams Report and judicial affidavits. The CA also went further by setting the case for hearing. In all these proceedings, all the parties rights to due process were amply protected and recognized.

With the procedural issue disposed of, we find that petitioners arguments fail to persuade. Its invocation of Sutton is unavailing. In Sutton, we held: 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. 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.[59]

Indeed, as pointed out by the CA, the instant case does not rest on facts parallel to those of Sutton because, in Sutton, the subject property remained a livestock farm. We even highlighted therein the fact that there has been no change of business interest in the case of respondents .[60] Similarly, in Department of Agrarian Reform v. Uy ,[61] we excluded a parcel of land from CARP coverage due to the factual findings of the MARO, which were confirmed by the DAR, that the property was entirely devoted to livestock farming. However, in A.Z. Arnaiz Realty, Inc., represented by Carmen Z. Arnaiz v. Office of the President; Department of Agrarian Reform; Regional Director, DAR Region V, Legaspi City; Provincial Agrarian Reform Officer, DAR Provincial Office, Masbate, Masbate; and Municipal Agrarian Reform Officer, DAR Municipal Office, Masbate, Masbate ,[62] we denied a similar petition for exemption and/or exclusion, by according respect to the CAs factual findings and its reliance on the findings of the DAR and the OP that the subject parcels of land were not directly, actually, and exclusively used for pasture.[63]

Petitioners admission that, since 2001, it leased another ranch for its own livestock is fatal to its cause. [64] While petitioner advances a defense that it leased this ranch because the occupants of the subject property harmed its cattle, like the CA, we find it surprising that not even a single police and/or barangay report was filed by petitioner to amplify its indignation over these alleged illegal acts. Moreover, we accord respect to the CAs keen observation that the assailed MARO reports and the Investigating Teams Report do not actually contradict one another, finding that the 43 cows, while owned by petitioner, were actually pastured outside the subject property. ` Finally, it is established that issues of Exclusion and/or Exemption are characterized as Agrarian Law Implementation (ALI) cases which are well within the DAR Secretarys competence and jurisdiction.[65] Section 3, Rule II of the 2003 Department of Agrarian Reform Adjudication Board Rules of Procedure provides: Section 3. Agrarian Law Implementation Cases. The Adjudicator or the Board shall have no jurisdiction over matters involving the administrative implementation of RA No. 6657, otherwise known as the Comprehensive Agrarian Reform Law (CARL) of 1988 and other agrarian laws as 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: xxxx 3.8 Exclusion from CARP coverage of agricultural land used for livestock, swine, and poultry raising. Thus, we cannot, without going against the law, arbitrarily strip the DAR Secretary of his legal mandate to exercise jurisdiction and authority over all ALI cases. To succumb to petitioners contention that when a land is declared exempt from the CARP on the ground that it is not agricultural as of the time the CARL took effect, the use and disposition of that land is entirely and forever beyond DARs jurisdiction is dangerous, suggestive of self-regulation. Precisely, it is the DAR Secretary who is vested with such jurisdiction and authority to exempt and/or exclude a property from CARP coverage based on the factual circumstances of each case and in accordance with law and applicable jurisprudence. In addition, albeit parenthetically, Secretary Villa had already granted the conversion into residential and golf courses use of nearly one-half of the entire area originally claimed as exempt from CARP coverage because it was allegedly devoted to livestock production. In sum, we find no reversible error in the assailed Amended Decision and Resolution of the CA which would warrant the modification, much less the reversal, thereof. WHEREFORE, the Petition is DENIED and the Court of Appeals Amended Decision dated October 4, 2006 and Resolution dated March 27, 2008 areAFFIRMED. No costs. SO ORDERED.

Central mindanao univ vs DARAB(215 SCRA 85, 1992)

DECISION ABAD, J.: This case concerns the constitutionality of a presidential proclamation that takes property from a state university, over its objections, for distribution to indigenous peoples and cultural communities. The Facts and the Case Petitioner Central Mindanao University (CMU) is a chartered educational institution owned and run by the State. [1] In 1958, the President issued Presidential Proclamation 476, reserving 3,401 hectares of lands of the public domain in Musuan, Bukidnon, as school site for CMU. Eventually, CMU obtained title in its name over 3,080 hectares of those lands under Original Certificates of Title (OCTs) 0-160, 0-161, and 0-162. Meanwhile, the government distributed more than 300 hectares of the remaining untitled lands to several tribes belonging to the areas cultural communities. Forty-five years later or on January 7, 2003 President Gloria Macapagal-Arroyo issued Presidential Proclamation 310 that takes 670 hectares from CMUs registered lands for distribution to indigenous peoples and cultural communities in Barangay Musuan, Maramag, Bukidnon. On April 3, 2003, however, CMU filed a petition for prohibition against respondents Executive Secretary, Secretary of the Department of Environment and Natural Resources, Chairperson and Commissioner of the National Commission on Indigenous Peoples (NCIP), and Lead Convenor of the National Anti-Poverty Commission (collectively, NCIP, et al) before the Regional Trial Court (RTC) of Malaybalay City (Branch 9), seeking to stop the implementation of Presidential Proclamation 310 and have it declared unconstitutional. The NCIP, et al moved to dismiss the case on the ground of lack of jurisdiction of the Malaybalay RTC over the action, pointing out that since the act sought to be enjoined relates to an official act of the Executive Department done in Manila, jurisdiction lies with the Manila RTC. The Malaybalay RTC denied the motion, however, and proceeded to hear CMUs application for preliminary injunction. Meanwhile, respondents NCIP, et al moved for partial reconsideration of the RTCs order denying their motion to dismiss. On October 27, 2003, after hearing the preliminary injunction incident, the RTC issued a resolution granting NCIP, et als motion for partial reconsideration and dismissed CMUs action for lack of jurisdiction. Still, the RTC ruled that Presidential Proclamation 310 was constitutional, being a valid State act. The RTC said that the ultimate owner of the lands is the State and that CMU merely held the same in its behalf. CMU filed a motion for reconsideration of the resolution but the RTC denied the same on April 19, 2004. This prompted CMU to appeal the RTCs dismissal order to the Court of Appeals (CA) Mindanao Station. [2] CMU raised two issues in its appeal: 1) whether or not the RTC deprived it of its right to due process when it dismissed the action; and 2) whether or not Presidential Proclamation 310 was constitutional.[3] In a March 14, 2008 decision, [4] the CA dismissed CMUs appeal for lack of jurisdiction, ruling that CMUs recourse should have been a petition for review on certiorari filed directly with this Court, because it raised pure questions lawbearing mainly on the constitutionality of Presidential Proclamation 310. The CA added that whether the trial court can decide the merits of the case based solely on the hearings of the motion to dismiss and the application for injunction is also a pure question of law. CMU filed a motion for reconsideration of the CAs order of dismissal but it denied the same,[5] prompting CMU to file the present petition for review. The Issues Presented The case presents the following issues: 1. Whether or not the CA erred in not finding that the RTC erred in dismissing its action for prohibition against NCIP, et al for lack of jurisdiction and at the same time ruling that Presidential Proclamation 310 is valid and constitutional; 2. Court; and 3. Whether or not Presidential Proclamation 310 is valid and constitutional. The Courts Rulings One. The RTC invoked two reasons for dismissing CMUs action. The first is that jurisdiction over the action to declare Presidential Proclamation 310 lies with the RTC of Manila, not the RTC of Malaybalay City, given that such action relates to official acts of the Executive done in Manila. The second reason, presumably made on the assumption that the Malaybalay RTC had jurisdiction over the action, Presidential Proclamation 310 was valid and constitutional since the State, as ultimate owner of the subject lands, has the right to dispose of the same for some purpose other than CMUs use. There is nothing essentially wrong about a court holding on the one hand that it has no jurisdiction over a case, and on the other, based on an assumption that it has jurisdiction, deciding the case on its merits, both with the same results, which is the dismissal of the action. At any rate, the issue of the propriety of the RTC using two incompatible reasons for dismissing the action is academic. The CA from which the present petition was brought dismissed CMUs appeal on some technical ground. Two. Section 9(3) of the Judiciary Reorganization Act of 1980 [6] vests in the CA appellate jurisdiction over the final judgments or orders of the RTCs and quasi-judicial bodies. But where an appeal from the RTC raises purely questions of law, recourse should be by a petition for review on certiorari filed directly with this Court. The question in this case is whether or not CMUs appeal from the RTCs order of dismissal raises purely questions of law. As already stated, CMU raised two grounds for its appeal: 1) the RTC deprived it of its right to due process when it dismissed the action; and 2) Presidential Proclamation 310 was constitutional. Did these grounds raise factual issues that are proper for the CA to hear and adjudicate? Regarding the first reason, CMUs action was one for injunction against the implementation of Presidential Proclamation 310 that authorized the taking of lands from the university. The fact that the President issued this proclamation in Manila and that it was being enforced in Malaybalay City where the lands were located were facts that were not in issue. These were alleged in the complaint and presumed to be true by the motion to dismiss. Consequently, the CMUs remedy for assailing the correctness of the dismissal, involving as it did a pure question of law, indeed lies with this Court. As to the second reason, the CMU claimed that the Malaybalay RTC deprived it of its right to due process when it dismissed the case based on the ground that Presidential Proclamation 310, which it challenged, was constitutional. CMU points out that the issue of the constitutionality of the proclamation had not yet been properly raised and heard. NCIP, et al had not yet filed an answer to join issue with CMU on that score. What NCIP, et al filed was merely a motion to dismiss on the ground of lack of jurisdiction of the Malaybalay RTC over the injunction case. Whether the RTC in fact prematurely decided the constitutionality of the proclamation, resulting in the denial of CMUs right to be heard on the same, is a factual issue that was proper for the CA Mindanao Station to hear and ascertain from the parties. Consequently, the CA erred in dismissing the action on the ground that it raised pure questions of law. Whether or not the CA correctly dismissed CMUs appeal on the ground that it raised purely questions of law that are proper for a petition for review filed directly with this

Three. Since the main issue of the constitutionality of Presidential Proclamation 310 has been raised and amply argued before this Court, it would serve no useful purpose to have the case remanded to the CA Mindanao Station or to the Malaybalay RTC for further proceedings. Ultimately, the issue of constitutionality of the Proclamation in question will come to this Court however the courts below decide it. Consequently, the Court should, to avoid delay and multiplicity of suits, now resolve the same. The key question lies in the character of the lands taken from CMU. In CMU v. Department of Agrarian Reform Adjudication Board (DARAB) ,[7] the DARAB, a national government agency charged with taking both privately-owned and government-owned agricultural lands for distribution to farmers-beneficiaries, ordered the segregation for this purpose of 400 hectares of CMU lands. The Court nullified the DARAB action considering the inalienable character of such lands, being part of the long term functions of an autonomous agricultural educational institution. Said the Court: The construction given by the DARAB to Section 10 restricts the land area of the CMU to its present needs or to a land area presently, actively exploited and utilized by the university in carrying out its present educational program with its present student population and academic facility overlooking the very significant factor of growth of the university in the years to come. By the nature of the CMU, which is a school established to promote agriculture and industry, the need for a vast tract of agricultural land for future programs of expansion is obvious. At the outset, the CMU was conceived in the same manner as land grant colleges in America, a type of educational institution which blazed the trail for the development of vast tracts of unexplored and undeveloped agricultural lands in the Mid-West. What we now know as Michigan StateUniversity, Penn State University and Illinois State University, started as small land grant colleges, with meager funding to support their ever increasing educational programs. They were given extensive tracts of agricultural and forest lands to be developed to support their numerous expanding activities in the fields of agricultural technology and scientific research. Funds for the support of the educational programs of land grant colleges came from government appropriation, tuition and other student fees, private endowments and gifts, and earnings from miscellaneous sources. It was in this same spirit that President Garcia issued Proclamation No. 476, withdrawing from sale or settlement and reserving for the Mindanao Agricultural College (forerunner of the CMU) a land reservation of 3,080 hectares as its future campus. It was set up in Bukidnon, in the hinterlands of Mindanao, in order that it can have enough resources and wide open spaces to grow as an agricultural educational institution, to develop and train future farmers of Mindanao and help attract settlers to that part of the country. xxxx The education of the youth and agrarian reform are admittedly among the highest priorities in the government socio-economic programs. In this case, neither need give way to the other. Certainly, there must still be vast tracts of agricultural land in Mindanao outside the CMU land reservation which can be made available to landless peasants, assuming the claimants here, or some of them, can qualify as CARP beneficiaries. To our mind, the taking of the CMU land which had been segregated for educational purposes for distribution to yet uncertain beneficiaries is a gross misinterpretation of the authority and jurisdiction granted by law to the DARAB. The decision in this case is of far-reaching significance as far as it concerns state colleges and universities whose resources and research facilities may be gradually eroded by misconstruing the exemptions from the CARP. These state colleges and universities are the main vehicles for our scientific and technological advancement in the field of agriculture, so vital to the existence, growth and development of this country. [8] It did not matter that it was President Arroyo who, in this case, attempted by proclamation to appropriate the lands for distribution to indigenous peoples and cultural communities. As already stated, the lands by their character have become inalienable from the moment President Garcia dedicated them for CMUs use in scientific and technological research in the field of agriculture. They have ceased to be alienable public lands. Besides, when Congress enacted the Indigenous Peoples Rights Act (IPRA) or Republic Act 8371 [9] in 1997, it provided in Section 56 that property rights within the ancestral domains already existing and/or vested upon its effectivity shall be recognized and respected. In this case, ownership over the subject lands had been vested in CMU as early as 1958. Consequently, transferring the lands in 2003 to the indigenous peoples around the area is not in accord with the IPRA. Furthermore, the land registration court considered the claims of several tribes belonging to the areas cultural communities in the course of the proceedings for the titling of the lands in CMUs name. Indeed, eventually, only 3,080 hectares were titled in CMUs name under OCTs 0-160, 0-161 and 0-162. More than 300 hectares were acknowledged to be in the possession of and subject to the claims of those tribes. WHEREFORE, the Court GRANTS the petition, SETS ASIDE the March 14, 2008 decision and September 22, 2008 resolution of the Court of Appeals in CA-G.R. SP 85456, and DECLARES Presidential Proclamation 310 as null and void for being contrary to law and public policy.

SO ORDERED.

DAR vs DECS (GR # 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. DECISION YNARES-SANTIAGO, J.: This petition for review on certiorari seeks to set aside the decision[1] 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 petitioners 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. Piosa, 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 Piosa 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; All lands of the public domain in excess of the specific limits as determined by Congress in the preceding paragraph; All other lands owned by the Government devoted to or suitable for agriculture; and All private lands devoted to or suitable for agriculture regardless of the agricultural products raised or that can be raised thereon.

(b) (c) (d)

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: xxx xxx xxx

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] xxx xxx xxx

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) (b) (c) (d) (e) names and members of their immediate farm household; owners or administrators of the lands they work on and the length of tenurial relationship; location and area of the land they work; crops planted; and 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.

PROVINCE OF CAMARINES SUR, represented by GOV. LUIS R. VILLAF UERTE and HON. BENJAMIN V. PANGA as Presiding Judge of RTC Branch 33 at Pili, Camarines Sur , petitioners, vs. THE COURT OF APPEALS (THIRD DIVISION), ERNESTO SAN JOAQUIN and EFREN SAN JOAQUIN, respondents. The Provincial Attorney for petitioners. Reynaldo L. Herrera for Ernesto San Joaquin.

SYLLABUS 1. POLITICAL LAW; INHERENT POWERS OF THE STATE; EMINENT DOMAIN; PUBLIC PURPOSE; CONCEPT. Modernly, there has been a shift from the literal to a broader interpretation of "public purpose" or "public use" for which the power of eminent domain may be exercised. The old concept was that the condemned property must actually be used by the general public (e.g. roads, bridges, public plazas, etc.) before the taking thereof could satisfy the constitutional requirement of "public use". Under the new concept, "public use" means public advantage, convenience or benefit, which tends to contribute to the general welfare and the prosperity of the whole community, like a resort complex for tourists or housing project (Heirs of Juancho Ardano v. Reyes, 125 SCRA 220 [1983]; Sumulong v. Guerrero, 154 SCRA 461 [1987]). 2. ID.; ID.; ID.; ID.; DEEMED SATISFIED WHEN THE PURPOSE DIRECTLY AND SIGNIFICANTLY AFFECTS PUBLIC HEALTH; SAFETY, THE ENVIRONMENT AND IN SUM THE GENERAL WELFARE. The expropriation of the property authorized by the questioned resolution is for a public purpose. The establishment of a pilot development center would inure to the direct benefit and advantage of the people of the Province of Camarines Sur. Once operational, the center would make available to the community invaluable information and technology on agriculture, fishery and the cottage industry. Ultimately, the livelihood of the farmers, fishermen and craftsmen would be enhanced. The housing project also satisfies the public purpose requirement of the Constitution. As held inSumulong v. Guerrero, 154 SCRA 461, "Housing is a basic human need. Shortage in housing is a matter of state concern since it directly and significantly affects public health, safety, the environment and in sum the general welfare." 3. ID.; ID.; ID.; DEEMED SUPERIOR TO THE POWER TO DISTRIBUTE LANDS UNDER THE LAND REFORM PROGRAM. In Heirs of Juancho Ardana v. Reyes, 125 SCRA 220, petitioners raised the issue of whether the Philippine Tourism Authority can expropriate lands covered by the "Operation Land Transfer" for use of a tourist resort complex. There was a finding that of the 282 hectares sought to be expropriated, only an area of 8,970 square meters or less than one hectare was affected by the land reform program and covered by emancipation patents issued by the Ministry of Agrarian Reform. While the Court said that there was "no need under the facts of this petition to rule on whether the public purpose is superior or inferior to another purpose or engage in a balancing of competing public interest," it upheld the expropriation after noting that petitioners had failed to overcome the showing that the taking of 8,970 square meters formed part of the resort complex. A fair and reasonable reading of the decision is that this Court viewed the power of expropriation as superior to the power to distribute lands under the land reform program. 4. ID.; ID.; ID.; LIMITATIONS ON THE EXERCISE THEREOF BY LOCAL GOVERNMENT UNITS MUST BE CLEARLY EXPRESSED, EITHER IN THE LAW CONFERRING THE POWER OR IN OTHER LEGISLATION. It is true that local government units have no inherent power of eminent domain and can exercise it only when

expressly authorized by the legislature (City of Cincinnati v. Vester, 281 US 439, 74 L.ed. 950, 50 S Ct. 360). It is also true that in delegating the power to expropriate, the legislature may retain certain control or impose certain restraints on the exercise thereof by the local governments (Joslin Mfg. Co. v. Providence, 262 US 668 67 L. ed. 1167, 43 S Ct. 684). While such delegated power may be a limited authority, it is complete within its limits. Moreover, the limitations on the exercise of the delegated power must be clearly expressed, either in the law conferring the power or in other legislations. 5. ID.; ID.; ID.; STATUTES CONFERRING THE POWER THEREOF TO POLITICAL SUBDIVISION CANNOT BE BROADENED OR CONSTRICTED BY IMPLICATION. Section 9 of B.P. Blg. 337 does not intimate in the least that local government units must first secure the approval of the Department of Land Reform for the conversion of lands from agricultural to non-agricultural use, before they can institute the necessary expropriation proceedings. Likewise, there is no provision in the Comprehensive Agrarian Reform Law which expressly subjects the expropriation of agricultural lands by local government units to the control of the Department of Agrarian Reform. The closest provision of law that the Court of Appeals could cite to justify the intervention of the Department of Agrarian Reform in expropriation matters is Section 65 of the Comprehensive Agrarian Reform Law. The opening, adverbial phrase of the provision sends signals that it applies to lands previously placed under the agrarian reform program as it speaks of "the lapse of five (5) years from its award." The rules on conversion of agricultural lands found in Section 4 (k) and 5 (1) of Executive Order No. 129-A, Series of 1987, cannot be the source of the authority of the Department of Agrarian Reform to determine the suitability of a parcel of agricultural land for the purpose to which it would be devoted by the expropriating authority. While those rules vest on the Department of Agrarian Reform the exclusive authority to approve or disapprove conversions of agricultural lands for residential, commercial or industrial uses, such authority is limited to the applications for reclassification submitted by the land owners or tenant beneficiaries. Statutes conferring the power of eminent domain to political subdivisions cannot be broadened or constricted by implication (Schulman v. People, 10 N.Y. 2d. 249, 176 N.E. 2d. 817, 219 NYS 2d. 241). 6. ID.; ID.; ID.; DETERMINATION OF PUBLIC USE LODGED WITH THE LEGISLATIVE BRANCH. To sustain the Court of Appeals would mean that the local government units can no longer expropriate agricultural lands needed for the construction of roads, bridges, schools, hospitals, etc., without first applying for conversion of the use of the lands with the Department of Agrarian Reform, because all of these projects would naturally involve a change in the land use. In effect, it would then be the Department of Agrarian Reform to scrutinize whether the expropriation is for a public purpose or public use. Ordinarily, it is the legislative branch of the local government unit that shall determine whether the use of the property sought to be expropriated shall be public, the same being an expression of legislative policy. The courts defer to such legislative determination and will intervene only when a particular undertaking has no real or substantial relation to the public use (United States Ex Rel Tennessee Valley Authority v. Welch, 327 US 546, 90 L. ed. 843, 66 S Ct 715; State ex rel Twin City Bldg. and Invest. Co. v. Houghton, 144 Minn. 1, 174 NW 885, 8 ALR 585). There is also an ancient rule that restrictive statutes, no matter how broad their terms are, do not embrace the sovereign unless the sovereign is specially mentioned as subject thereto (Alliance of Government Workers v. Minister of Labor and Employment, 124 SCRA 1 [1983]). The Republic of the Philippine, as sovereign, or its political subdivisions, as holders of delegated sovereign powers, cannot be bound by provisions of law couched in general terms. 7. ID.; ID.; ID.; DETERMINATION OF JUST COMPENSATION, GOVERNED BY THE RULES OF COURT. The fears of private respondents that they will be paid on the basis of the valuation declared in the tax declarations of their property, are unfounded. This Court has declared as unconstitutional the Presidential Decrees fixing the just compensation in expropriation cases to be the value given to the condemned property either by the owners or the assessor, whichever was lower ([Export Processing Zone Authority v. Dulay, 149 SCRA 305 [1987]). As held in Municipality of Talisay Ramirez, 183 SCRA 528 [1990]7 the rules for determining just compensation are those laid down in Rule 67 of the Rules of Court, which allow private respondents to submit evidence on what they consider shall be the just compensation for their property. DECISION QUIASON, J p: In this appeal by certiorari from the decision of the Court of Appeals in AC-G.R. SP No. 20551 entitled "Ernesto N. San Joaquin, et al., v. Hon. Benjamin V. Panga, et al.," this Court is asked to decide whether the expropriation of agricultural lands by local government units is subject to the prior approval of the Secretary of the Agrarian Reform, as the implementor of the agrarian reform program. On December 22, 1988, the Sangguniang Panlalawigan of the Province of Camarines Sur passed Resolution No. 129, Series of 1988, authorizing the Provincial Governor to purchase or expropriate property contiguous to the provincial capitol site, in order to establish a pilot farm for non-food and non-traditional agricultural crops and a housing project for provincial government employees. The "WHEREAS" clause of the Resolution states: "WHEREAS, the province of Camarines Sur has adopted a five-year Comprehensive Development plan, some of the vital components of which includes the establishment of model and pilot farm for non-food and non-traditional agricultural crops, soil testing and tissue culture laboratory centers, 15 small scale technology soap making, small scale products of plaster of paris, marine biological and sea farming research center, and other progressive feasibility concepts objective of which is to provide the necessary scientific and technology know-how to farmers and fishermen in Camarines Sur and to establish a housing project for provincial government employees; "WHEREAS, the province would need additional land to be acquired either by purchase or expropriation to implement the above program component; "WHEREAS, there are contiguous/adjacent properties to be (sic) present Provincial Capitol Site ideally suitable to establish the same pilot development center; "WHEREFORE, . . . ." Pursuant to the Resolution, the Province of Camarines Sur, through its Governor, Hon. Luis R. Villafuerte, filed two separate cases for expropriation against Ernesto N. San Joaquin and Efren N. San Joaquin, docketed as Special Civil Action Nos. P-17-89 and P-19-89 of the Regional Trial Court, Pili, Camarines Sur, presided by the Hon. Benjamin V. Panga. Forthwith, the Province of Camarines Sur filed a motion for the issuance of a writ of possession. The San Joaquins failed to appear at the hearing of the motion. The San Joaquins moved to dismiss the complaints on the ground of inadequacy of the price offered for their property. In an order dated December 6, 1989, the trial court denied the motion to dismiss and authorized the Province of Camarines Sur to take possession of the property upon the deposit with the Clerk of Court of the amount of P5,714.00, the amount provisionally fixed by the trial court to answer for damages that private respondents may suffer in the event that the expropriation cases do not prosper. The trial court issued a writ of possession in an order dated January 18, 1990. The San Joaquins filed a motion for relief from the order, authorizing the Province of Camarines Sur to take possession of their property and a motion to admit an amended motion to dismiss. Both motions were denied in the order dated February 26, 1990. In their petition before the Court of Appeals, the San Joaquins asked: (a) that Resolution No. 129, Series of 1988 of the Sangguniang Panlalawigan be declared null and void; (b) that the complaints for expropriation be dismissed; and (c) that the order dated December 6, 1989 (i) denying the motion to dismiss and (ii) allowing the Province of Camarines Sur to take possession of the property subject of the expropriation and the order dated February 26, 1990, denying the motion to admit the amended motion to dismiss, be set aside. They also asked that an order be issued to restrain the trial court from enforcing the writ of possession, and thereafter to issue a writ of injunction.

In its answer to the petition, the Province of Camarines Sur claimed that it has the authority to initiate the expropriation proceedings under Sections 4 and 7 of Local Government Code (B.P. Blg. 337) and that the expropriations are for a public purpose. Asked by the Court of Appeals to give his Comment to the petition, the Solicitor General stated that under Section 9 of the Local Government Code (B.P. Blg. 337), there was no need for the approval by the Office of the President of the exercise by the Sangguniang Panlalawigan of the right of eminent domain. However, the Solicitor General expressed the view that the Province of Camarines Sur must first secure the approval of the Department of Agrarian Reform of the plan to expropriate the lands of petitioners for use as a housing project. The Court of Appeals set aside the order of the trial court, allowing the Province of Camarines Sur to take possession of private respondents' lands and the order denying the admission of the amended motion to dismiss. It also ordered the trial court to suspend the expropriation proceedings until after the Province of Camarines Sur shall have submitted the requisite approval of the Department of Agrarian Reform to convert the classification of the property of the private respondents from agricultural to non-agricultural land. Hence this petition. It must be noted that in the Court of Appeals, the San Joaquins asked for: (i) the dismissal of the complaints for expropriation on the ground of the inadequacy of the compensation offered for the property and (ii) the nullification of Resolution No. 129, Series of 1988 of the Sangguniang Panlalawigan of the Province of Camarines Sur. The Court of Appeals did not rule on the validity of the questioned resolution; neither did it dismiss the complaints. However, when the Court of Appeals ordered the suspension of the proceedings until the Province of Camarines Sur shall have obtained the authority of the Department of Agrarian Reform to change the classification of the lands sought to be expropriated from agricultural to non-agricultural use, it assumed that the resolution is valid and that the expropriation is for a public purpose or public use. Modernly, there has been a shift from the literal to a broader interpretation of "public purpose" or "public use" for which the power of eminent domain may be exercised. The old concept was that the condemned property must actually be used by the general public (e.g. roads, bridges, public plazas, etc.) before the taking thereof could satisfy the constitutional requirement of "public use". Under the new concept, "public use" means public advantage, convenience or benefit, which tends to contribute to the general welfare and the prosperity of the whole community, like a resort complex for tourists or housing project (Heirs of Juancho Ardano v. Reyes, 125 SCRA 220 [1983]; Sumulong v. Guerrero, 154 SCRA 461 [1987]). The expropriation of the property authorized by the questioned resolution is for a public purpose. The establishment of a pilot development center would inure to the direct benefit and advantage of the people of the Province of Camarines Sur. Once operational, the center would make available to the community invaluable information and technology on agriculture, fishery and the cottage industry. Ultimately, the livelihood of the farmers, fishermen and craftsmen would be enhanced. The housing project also satisfies the public purpose requirement of the Constitution. As held in Sumulong v.Guerrero, 154 SCRA 461, "Housing is a basic human need. Shortage in housing is a matter of state concern since it directly and significantly affects public health, safety, the environment and in sum the general welfare." It is the submission of the Province of Camarines Sur that its exercise of the power of eminent domain cannot be restricted by the provisions of the Comprehensive Agrarian Reform Law (R.A. No. 6657), particularly Section 65 thereof, which requires the approval of the Department of Agrarian Reform before a parcel of land can be reclassified from an agricultural to a nonagricultural land. The Court of Appeals, following the recommendation of the Solicitor General, held that the Province of Camarines Sur must comply with the provision of Section 65 of the Comprehensive Agrarian Reform Law and must first secure the approval of the Department of Agrarian Reform of the plan to expropriate the lands of the San Joaquins. In Heirs of Juancho Ardana v. Reyes, 125 SCRA 220, petitioners raised the issue of whether the Philippine Tourism Authority can expropriate lands covered by the "Operation Land Transfer" for use of a tourist resort complex. There was a finding that of the 282 hectares sought to be expropriated, only an area of 8,970 square meters or less than one hectare was affected by the land reform program and covered by emancipation patents issued by the Ministry of Agrarian Reform. While the Court said that there was "no need under the facts of this petition to rule on whether the public purpose is superior or inferior to another purpose or engage in a balancing of competing public interest," it upheld the expropriation after noting that petitioners had failed to overcome the showing that the taking of 8,970 square meters formed part of the resort complex. A fair and reasonable reading of the decision is that this Court viewed the power of expropriation as superior to the power to distribute lands under the land reform program. The Solicitor General denigrated the power to expropriate by the Province of Camarines Sur by stressing the fact that local government units exercise such power only by delegation. (Comment, pp. 14-15; Rollo, pp. 128-129). It is true that local government units have no inherent power of eminent domain and can exercise it only when expressly authorized by the legislature (City of Cincinnati v. Vester, 281 US 439, 74 L.ed. 950, 50 S Ct. 360). It is also true that in delegating the power to expropriate, the legislature may retain certain control or impose certain restraints on the exercise thereof by the local governments (Joslin Mfg. Co. v. Providence, 262 US 668 67 L. ed. 1167, 43 S Ct. 684). While such delegated power may be a limited authority, it is complete within its limits. Moreover, the limitations on the exercise of the delegated power must be clearly expressed, either in the law conferring the power or in other legislations. Resolution No. 219, Series of 1988, was promulgated pursuant to Section 9 of B.P. Blg. 337, the Local Government Code, which provides: "A local government unit may, through its head and acting pursuant to a resolution of its sanggunian exercise the right of eminent domain and institute condemnation proceedings for public use or purpose." Section 9 of B.P. Blg. 337 does not intimate in the least that local government units must first secure the approval of the Department of Land Reform for the conversion of lands from agricultural to non-agricultural use, before they can institute the necessary expropriation proceedings. Likewise, there is no provision in the Comprehensive Agrarian Reform Law which expressly subjects the expropriation of agricultural lands by local government units to the control of the Department of Agrarian Reform. The closest provision of law that the Court of Appeals could cite to justify the intervention of the Department of Agrarian Reform in expropriation matters is Section 65 of the Comprehensive Agrarian Reform Law, which reads: "SECTION 65. Conversion of Lands. After the lapse of five (5) years from its award, when the land ceases to be economically feasible and sound for agricultural purposes, or the locality has become urbanized and the land will have a greater economic value for residential, commercial or industrial purposes, the DAR, upon application of the beneficiary or the landowner, with due notice to the affected parties, and subject to existing laws, may authorize the reclassification or conversion of the land and its disposition: Provided, That the beneficiary shall have fully paid his obligation." The opening, adverbial phrase of the provision sends signals that it applies to lands previously placed under the agrarian reform program as it speaks of "the lapse of five (5) years from its award." The rules on conversion of agricultural lands found in Section 4 (k) and 5 (1) of Executive Order No. 129 - A, Series of 1987, cannot be the source of the authority of the Department of Agrarian Reform to determine the suitability of a parcel of agricultural land for the purpose to which it would be devoted by the expropriating authority. While those rules vest on the Department of Agrarian Reform the exclusive authority to approve or disapprove conversions of agricultural lands for residential, commercial or industrial uses, such authority is limited to the applications for reclassification submitted by the land owners or tenant beneficiaries.

Statutes conferring the power of eminent domain to political subdivisions cannot be broadened or constricted by implication (Schulman v. People, 10 N.Y. 2d. 249, 176 N.E. 2d. 817, 219 NYS 2d. 241). To sustain the Court of Appeals would mean that the local government units can no longer expropriate agricultural lands needed for the construction of roads, bridges, schools, hospitals, etc., without first applying for conversion of the use of the lands with the Department of Agrarian Reform, because all of these projects would naturally involve a change in the land use. In effect, it would then be the Department of Agrarian Reform to scrutinize whether the expropriation is for a public purpose or public use. Ordinarily, it is the legislative branch of the local government unit that shall determine whether the use of the property sought to be expropriated shall be public, the same being an expression of legislative policy. The courts defer to such legislative determination and will intervene only when a particular undertaking has no real or substantial relation to the public use (United States Ex Rel Tennessee Valley Authority v. Welch, 327 US 546, 90 L. ed. 843, 66 S Ct 715; State ex rel Twin City Bldg. and Invest. Co. v. Houghton, 144 Minn. 1, 174 NW 885, 8 ALR 585). There is also an ancient rule that restrictive statutes, no matter how broad their terms are, do not embrace the sovereign unless the sovereign is specially mentioned as subject thereto (Alliance of Government Workers v. Minister of Labor and Employment, 124 SCRA 1 [1983]). The Republic of the Philippine, as sovereign, or its political subdivisions, as holders of delegated sovereign powers, cannot be bound by provisions of law couched in general terms. The fears of private respondents that they will be paid on the basis of the valuation declared in the tax declarations of their property, are unfounded. This Court has declared as unconstitutional the Presidential Decrees fixing the just compensation in expropriation cases to be the value given to the condemned property either by the owners or the assessor, whichever was lower ([Export Processing Zone Authority v. Dulay, 149 SCRA 305 [1987]). As held in Municipality of Talisay Ramirez, 183 SCRA 528 [1990]7 the rules for determining just compensation are those laid down in Rule 67 of the Rules of Court, which allow private respondents to submit evidence on what they consider shall be the just compensation for their property. WHEREFORE, the petition is GRANTED and the questioned decision of the Court of Appeals is set aside insofar as it (a) nullifies the trial court's order allowing the Province of Camarines Sur to take possession of private respondents' property; (b) orders the trial court to suspend the expropriation proceedings; and (c) requires the Province of Camarines Sur to obtain the approval of the Department of Agrarian Reform to convert or reclassify private respondents' property from agricultural to non-agricultural use. The decision of the Court of Appeals is AFFIRMED insofar as it sets aside the order of the trial court, denying the amended motion to dismiss of the private respondents. SO ORDERED. Cruz, Grio-Aquino and Bellosillo, JJ ., concur

ROXAS vs. DAMBA

DECISION CARPIO MORALES, J. The main subject of the seven consolidated petitions is the application of petitioner Roxas & Co., Inc. (Roxas & Co.) for conversion from agricultural to non-agricultural use of its three haciendas located in Nasugbu, Batangas containing a total area of almost 3,000 hectares. The facts are not new, the Court having earlier resolved intimately-related issues dealing with these haciendas. Thus, in the 1999 case of Roxas & Co., Inc. v. Court of Appeals,[1] the Court presented the facts as follows: . . . Roxas & Co. is a domestic corporation and is the registered owner of three haciendas, namely, Haciendas Palico, Banilad and Caylaway , all located in the Municipality ofNasugbu, Batangas. Hacienda Palico is 1,024 hectares in area and is registered under Transfer Certificate of Title (TCT) No. 985. This land is covered by Tax Declaration Nos. 0465, 0466, 0468, 0470, 0234 and 0354. Hacienda Banilad is 1,050 hectares in area, registered under TCT No. 924 and covered by Tax Declaration Nos. 0236, 0237 and 0390. Hacienda Caylaway is 867.4571 hectares in area and is registered under TCT Nos. T-44662, T-44663, T-44664 and T-44665. xxxx On July 27, 1987, the Congress of the Philippines formally convened and took over legislative power from the President. This Congress passed Republic Act No. 6657, the Comprehensive Agrarian Reform Law (CARL) of 1988. The Act was signed by the President on June 10, 1988 and took effect on June 15, 1988. Before the laws effectivity, on May 6, 1988, [Roxas & Co.] filed with respondent DAR a voluntary offer to sell [VOS] Hacienda Caylaway pursuant to the provisions of E.O. No. 229. Haciendas Palico and Banilad were later placed under compulsory acquisition by DAR in accordance with the CARL. xxxx Nevertheless, on August 6, 1992, [Roxas & Co.], through its President, Eduardo J. Roxas, sent a letter to the Secretary of DAR withdrawing its VOS of Hacienda Caylaway. The Sangguniang Bayan of Nasugbu, Batangas allegedly authorized the reclassification of Hacienda Caylaway from agricultural to non-agricultural . As a result, petitioner informed respondent DAR that it was applying for conversion of Hacienda Caylaway from agricultural to other uses. x x x x[2] (emphasis and underscoring supplied) The petitions in G.R. Nos. 167540 and 167543 nub on the interpretation of Presidential Proclamation (PP) 1520 which was issued on November 28, 1975 by then President Ferdinand Marcos. The PP reads: DECLARING THE MUNICIPALITIES OF MARAGONDON AND TERNATE IN CAVITE PROVINCE AND THE MUNICIPALITY OF NASUGBU IN BATANGAS AS A TOURIST ZONE, AND FOR OTHER PURPOSES WHEREAS, certain areas in the sector comprising the Municipalities of Maragondon and Ternate in Cavite Province and Nasugbu in Batangas have potential tourism value after being developed into resort complexes for the foreign and domestic market; and

WHEREAS, it is necessary to conduct the necessary studies and to segregate specific geographic areas for concentrated efforts of both the government and private sectors in developing their tourism potential; NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution, do hereby declare the area comprising the Municipalities of Maragondon and Ternate in Cavite Province and Nasugbu in Batangas Province as a tourist zone under the administration and control of the Philippine Tourism Authority (PTA) pursuant to Section 5 (D) of P.D. 564. The PTA shall identify well-defined geographic areas within the zone with potential tourism value, wherein optimum use of natural assets and attractions, as well as existing facilities and concentration of efforts and limited resources of both government and private sector may be affected and realized in order to generate foreign exchange as well as other tourist receipts. Any duly established military reservation existing within the zone shall be excluded from this proclamation. All proclamation, decrees or executive orders inconsistent herewith are hereby revoked or modified accordingly. supplied). The incidents which spawned the filing of the petitions in G.R. Nos. 149548, 167505, 167845, 169163 and 179650 are stated in the dissenting opinion of Justice Minita ChicoNazario, the original draft of which was made the basis of the Courts deliberations. Essentially, Roxas & Co. filed its application for conversion of its three haciendas from argricultural to non-agricultural on the assumption that the issuance of PP 1520 which declared Nasugbu, Batangas as a tourism zone, reclassified them to non-agricultural uses. Its pending application notwithstanding, the Department of Agrarian Reform (DAR) issued Certificates of Land Ownership Award (CLOAs) to the farmer-beneficiaries in the three haciendas including CLOA No. 6654 which was issued on October 15, 1993 covering 513.983 hectares, the subject of G.R. No. 167505. The application for conversion of Roxas & Co. was the subject of the above-stated Roxas & Co., Inc. v. Court of Appeals which the Court remanded to the DAR for the observance of proper acquisition proceedings. As reflected in the above-quoted statement of facts in said case, during the pendency before the DAR of its application for conversion following its remand to the DAR or on May 16, 2000, Roxas & Co. filed with the DAR an application for exemption from the coverage of the Comprehensive Agrarian Reform Program (CARP) of 1988 on the basis of PP 1520 and of DAR Administrative Order (AO) No. 6, Series of 1994 [3] which states that all lands already classified as commercial, industrial, or residential before the effectivity of CARP no longer need conversion clearance from the DAR. It bears mentioning at this juncture that on April 18, 1982, the Sangguniang Bayan of Nasugbu enacted Municipal Zoning Ordinance No. 4 (Nasugbu MZO No. 4) which was approved on May 4, 1983 by the Human Settlements Regulation Commission, now the Housing and Land Use Regulatory Board (HLURB). The records show that Sangguniang Bayan and Association of Barangay Captains of Nasugbu filed before this Court petitions for intervention which were, however, denied by Resolution of June 5, 2006 for lack of standing.[4] After the seven present petitions were consolidated and referred to the Court en banc,[5] oral arguments were conducted on July 7, 2009. The core issues are: (emphasis and underscoring

1. 2. 3.

Whether PP 1520 reclassified in 1975 all lands in the Maragondon-Ternate-Nasugbu tourism zone to non-agricultural use to exempt Roxas & Co.s three haciendas in Nasugbu from CARP coverage; Whether Nasugbu MSO No. 4, Series of 1982 exempted certain lots in Hacienda Palico from CARP coverage; and Whether the partial and complete cancellations by the DAR of CLOA No. 6654 subject of G.R. No. 167505 is valid.

The Court shall discuss the issues in seriatim. I. PP 1520 DID NOT AUTOMATICALLY CONVERT THE AGRICULTURAL LANDS IN THE THREE MUNICIPALITIES INCLUDING NASUGBU TO NONAGRICULTURAL LANDS.

Roxas & Co. contends that PP 1520 declared the three municipalities as each constituting a tourism zone, reclassified all lands therein to tourism and, therefore, converted their use to non-agricultural purposes. To determine the chief intent of PP 1520, reference to the whereas clauses is in order. By and large, a reference to the congressional deliberation records would provide guidance in dissecting the intent of legislation. But since PP 1520 emanated from the legislative powers of then President Marcos during martial rule, reference to the whereas clauses cannot be dispensed [6] with. The perambulatory clauses of PP 1520 identified only certain areas in the sector comprising the [three Municipalities that] have potential tourism value and mandated the conduct of necessary studies and the segregation of specific geographic areas to achieve its purpose. Which is why the PP directed the Philippine Tourism Authority (PTA) to identify what those potential tourism areas are. If all the lands in those tourism zones were to be wholly converted to non-agricultural use, there would have been no need for the PP to direct the PTA to identify what those specific geographic areas are. The Court had in fact passed upon a similar matter before. Thus in DAR v. Franco,[7] it pronounced: Thus, the DAR Regional Office VII, in coordination with the Philippine Tourism Authority, has to determine precisely which areas are for tourism development and excluded from the Operation Land Transfer and the Comprehensive Agrarian Reform Program. And suffice it to state here that the Court has repeatedly ruled that lands already classified as non-agricultural before the enactment of RA 6657 on 15 June 1988 do not need any conversion clearance.[8] (emphasis and underscoring supplied). While the above pronouncement in Franco is an obiter, it should not be ignored in the resolution of the present petitions since it reflects a more rational and just interpretation of PP 1520. There is no prohibition in embracing the rationale of an obiter dictum in settling controversies, or in considering related proclamations establishing tourism zones. In the above-cited case of Roxas & Co. v. CA,[9] the Court made it clear that the power to determine whether Haciendas Palico, Banilad and Caylaway are non-agricultural, hence, exempt from the coverage of the [Comprehensive Agrarian Reform Law] lies with the [Department of Agrarian Reform], not with this Court.[10] The DAR, an administrative body of special competence, denied, by Order of October 22, 2001, the application for CARP exemption of Roxas & Co., it finding that PP 1520 did not automatically reclassify all the lands in the affected municipalities from their original uses. It appears that the PTA had not yet, at that time, identified the specific geographic areas for tourism development and had no pending tourism development projects in the areas. Further, report from the Center for Land Use Policy Planning and Implementation (CLUPPI) indicated that the areas were planted with sugar cane and other crops.[11] Relatedly, the DAR, by Memorandum Circular No. 7, Series of 2004,[12] came up with clarificatory guidelines and therein decreed that A. x x x x. B. Proclamations declaring general areas such as whole provinces, municipalities, barangays, islands or peninsulas as tourist zones that merely:

(1) recognize certain still unidentified areas within the covered provinces, municipalities, barangays, islands, or peninsulas to be with potential tourism value and charge the Philippine Tourism Authority with the task to identify/delineate specific geographic areas within the zone with potential tourism value and to coordinate said areas development; or (2) recognize the potential value of identified spots located within the general area declared as tourist zone (i.e. x x x x) and direct the Philippine Tourism Authority to coordinate said areas development; could not be regarded as effecting an automatic reclassification of the entirety of the land area declared as tourist zone. This is so because reclassification of lands denotes their allocation into some specific use and providing for the manner of their utilization and disposition (Sec. 20, Local Government Code) or the act of specifying how agricultural lands shall be utilized for non-agricultural uses such as residential, industrial, or commercial, as embodied in the land use plan. (Joint HLURB, DAR, DA, DILG Memo. Circular Prescribing Guidelines for MC 54, S. 1995, Sec.2) A proclamation that merely recognizes the potential tourism value of certain areas within the general area declared as tourist zone clearly does not allocate, reserve, or intend the entirety of the land area of the zone for non-agricultural purposes . Neither does said proclamation direct that otherwise CARPable lands within the zone shall already be used for purposes other than agricultural . Moreover, to view these kinds of proclamation as a reclassification for non-agricultural purposes of entire provinces, municipalities, barangays, islands, or peninsulas would be unreasonable as it amounts to an automatic and sweeping exemption from CARP in the name of tourism development. The same would also undermine the land use reclassification powers vested in local government units in conjunction with pertinent agencies of government. C. There being no reclassification, it is clear that said proclamations/issuances, assuming [these] took effect before June 15, 1988, could not supply a basis for exemption of the entirety of the lands embraced therein from CARP coverage x x x x. D. x x x x. (underscoring in the original; emphasis and italics supplied) The DARs reading into these general proclamations of tourism zones deserves utmost consideration, more especially in the present petitions which involve vast tracts of agricultural land. To reiterate, PP 1520 merely recognized the potential tourism value of certain areas within the general area declared as tourism zones . It did not reclassify the areas to nonagricultural use. Apart from PP 1520, there are similarly worded proclamations declaring the whole of Ilocos Norte and Bataan Provinces, Camiguin, Puerto Prinsesa, Siquijor,Panglao Island, parts of Cebu City and Municipalities of Argao and Dalaguete in Cebu Province as tourism zones.[13] Indubitably, these proclamations, particularly those pertaining to the Provinces of Ilocos Norte and Bataan, did not intend to reclassify all agricultural lands into non-agricultural lands in one fell swoop. The Court takes notice of how the agrarian reform program wasand still isimplemented in these provinces since there are lands that do not have any tourism potential and are more appropriate for agricultural utilization. Relatedly, a reference to the Special Economic Zone Act of 1995[14] provides a parallel orientation on the issue. Under said Act, several towns and cities encompassing the whole Philippines were readily identified as economic zones. [15] To uphold Roxas & Co.s reading of PP 1520 would see a total reclassification of practically all the agricultural lands in the country to non-agricultural use. Propitiously, the legislature had the foresight to include a bailout provision in Section 31 of said Act for land conversion. [16] The same cannot be said of PP 1520, despite the existence of Presidential Decree (PD) No. 27 or the Tenant Emancipation Decree,[17] which is the precursor of the CARP. Interestingly, then President Marcos also issued on September 26, 1972 PD No. 2 which declared the entire Philippines as land reform area.[18] Such declaration did not intend to reclassify all lands in the entire country to agricultural lands. President Marcos, about a month later or on October 21, 1972, issued PD 27 which decreed that all private agricultural lands primarily devoted to rice and corn were deemed awarded to their tenant-farmers. Given these martial law-era decrees and considering the socio-political backdrop at the time PP 1520 was issued in 1975, it is inconceivable that PP 1520, as well as other similarly worded proclamations which are completely silent on the aspect of reclassification of the lands in those tourism zones, would nullify the gains already then achieved by PD 27. Even so, Roxas & Co. turns to Natalia Realty v. DAR and NHA v. Allarde to support its position. These cases are not even closely similar to the petitions in G.R. Nos. 167540 and 167543. The only time that these cases may find application to said petitions is when the PTA actually identifies well-defined geographic areas within the zone with potential tourism value. In remotely tying these two immediately-cited cases that involve specific and defined townsite reservations for the housing program of the National Housing Authority to the present petitions, Roxas & Co. cites Letter of Instructions No. 352 issued on December 22, 1975 which states that the survey and technical description of the tourism zones shall be considered an integral part of PP 1520. There were, however, at the time no surveys and technical delineations yet of the intended tourism areas. On hindsight, Natalia and Allarde find application in the petitions in G.R. Nos. 179650 & 167505, which petitions are anchored on the extenuating effects of Nasugbu MZO No. 4, but not in the petitions in G.R. Nos. 167540 & 167543 bearing on PP 1520, as will later be discussed. Of significance also in the present petitions is the issuance on August 3, 2007 of Executive Order No. 647[19] by President Arroyo which proclaimed the areas in the Nasugbu Tourism Development Plan as Special Tourism Zone. Pursuant to said Executive Order, the PTA completed its validation of 21 out of 42 barangays as tourism priority areas, hence, it is only after such completion that these identified lands may be subjected to reclassification proceedings. It bears emphasis that a mere reclassification of an agricultural land does not automatically allow a landowner to change its use since there is still that process of conversion before one is permitted to use it for other purposes.[20] Tourism Act, and not to PP 1520, for possible exemption. II. ROXAS & CO.S APPLICATION IN DAR ADMINISTRATIVE CASE NO. A-9999-142-97 FOR CARP EXEMPTION IN HACIENDA PALICOSUBJECT OF G.R. NO. 179650 CANNOT BE GRANTED IN VIEW OF DISCREPANCIES IN THE LOCATION AND IDENTITY OF THE SUBJECT PARCELS OF LAND.

Since PP 1520 did not automatically convert Haciendas Caylaway, Banilad and Palico into non-agricultural estates, can Roxas & Co. invoke in the alternative Nasugbu MZO No. 4, which reclassified in 1982 the haciendas to non-agricultural use to exclude six parcels of land in Hacienda Palico from CARP coverage? By Roxas & Co.s contention, the affected six parcels of land which are the subject of DAR Administrative Case No. A-9999-142-97 and nine parcels of land which are the subject of DAR Administrative Case No. A-9999-008-98 involved in G.R. No. 167505, all in Hacienda Palico, have been reclassified to non-agricultural uses via Nasugbu MZO No. 4 which was approved by the forerunner of HLURB. Roxas & Co.s contention fails. To be sure, the Court had on several occasions decreed that a local government unit has the power to classify and convert land from agricultural to non-agricultural prior to the effectivity of the CARL.[23] In Agrarian Reform Beneficiaries Association v. Nicolas,[24] it reiterated that . . . the facts obtaining in this case are similar to those in Natalia Realty. Both subject lands form part of an area designated for non-agricultural purposes. Both were classified as non-agricultural lands prior to June 15, 1988, the date of effectivity of CARL. xxxx

In the case under review, the subject parcels of lands were reclassified within an urban zone as per approved Official Comprehensive Zoning Map of the City of Davao. The reclassification was embodied in City Ordinance No. 363, Series of 1982. As such, the subject parcels of land are considered non-agricultural and may be utilized for residential, commercial, and industrial purposes. The reclassification was later approved by the HLURB . [25] (emphasis, italics and underscoring supplied) The DAR Secretary[26] denied the application for exemption of Roxas & Co., however, in this wise: Initially, CLUPPI-2 based [its] evaluation on the lot nos. as appearing in CLOA No. 6654. However, for purposes of clarity and to ensure that the area applied for exemption is indeed part of TCT No. T-60034, CLUPPI-2 sought to clarify with [Roxas & Co.] the origin of TCT No. T-60034. In a letter dated May 28, 1998, [Roxas & Co.] explains that portions of TCT No. T-985, the mother title, was subdivided into 125 lots pursuant to PD 27. A total of 947.8417 was retained by the landowners and was subsequently registered under TCT No. 49946. [[Roxas & Co.] further explains that TCT No. 49946 was further subdivided into several lots (Lot 125-A to Lot 125-P) with Lot No. 125-N registered under TCT No. 60034. [A] review of the titles, however, shows that the origin of T-49946 is T-783 and not T-985. On the other hand, the origin of T-60034 is listed as 59946, and not T-49946. The discrepancies were attributed by [Roxas & Co.] to typographical errors which were acknowledged and initialled [sic] by the ROD. Per verification, the discrepancies . . . cannot be ascertained.[27] (emphasis and underscoring supplied) In denying Roxas & Co.s motion for reconsideration, the DAR Secretary held: The landholdings covered by the aforesaid titles do not correspond to the Certification dated February 11, 1998 of the [HLURB] , the Certification dated September 12, 1996 issued by the Municipal Planning and Development Coordinator, and the Certifications dated July 31, 1997 and May 27, 1997 issued by the National Irrigation Authority. The certifications were issued for Lot Nos. 21, 24, 28, 31, 32 and 34. Thus, it was not even possible to issue exemption clearance over the lots covered by TCT Nos. 60019 to 60023. Furthermore, we also note the discrepancies between the certifications issued by the HLURB and the Municipal Planning Development Coordinator as to the area of the specific lots.[28] (emphasis and underscoring supplied) In affirming the DAR Secretarys denial of Roxas & Co.s application for exemption, the Court of Appeals, in CA-G.R. SP No. 63146 subject of G.R. No. 179650, observed: In the instant case, a perusal of the documents before us shows that there is no indication that the said TCTs refer to the same properties applied for exemption by [Roxas & Co.] It is true that the certifications refer, among others, to DAR Lot Nos. 21, 24, 28, 31, 32 and 34 But these certifications contain nothing to show that these lots are the same as Lots 125-A, 125-B, 125-C, 125-D and 125-E covered by TCT Nos. 60019, 60020, 60021, 60022 and 60023, respetively. While [Roxas & Co.] claims that DAR Lot Nos. 21, 24 and 31 correspond to the aforementioned TCTs submitted to the DAR no evidence was presented to substantiate such allegation . Moreover, [Roxas & Co.] failed to submit TCT 634 which it claims covers DAR Lot Nos. 28, 32 and 24 .(TSN, April 24, 2001, pp. 43-44) xxxx [Roxas & Co.] also claims that subject properties are located at Barangay Cogunan and Lumbangan and that these properties are part of the zone classified as Industrial under Municipal Ordinance No. 4, Series of 1982 of the Municipality of Nasugbu, Batangas. .a scrutiny of the said Ordinance shows that only Barangays Talangan and Lumbangan of the said municipality were classified as Industrial ZonesBarangay Cogunan was not included. x x x x. In fact, the TCTs submitted by [Roxas & Co.] show that the properties covered by said titles are all located at Barrio Lumbangan. [29] (emphasis and underscoring supplied) Its foregoing findings notwithstanding, the appellate court still allowed Roxas & Co. to adduce additional evidence to support its application for exemption under Nasugbu MZO No. 4. Meanwhile, Roxas & Co. appealed the appellate courts decision in CA-G.R. No. SP No. 63146 affirming the DAR Secretarys denial of its application for CARP exemption in Hacienda Palico (now the subject of G.R. No. 149548). When Roxas & Co. sought the re-opening of the proceedings in DAR Administrative Case No. A-9999-142-97 (subject of G.R. No. 179650), and offered additional evidence in support of its application for CARP exemption, the DAR Secretary, this time, granted its application for the six lots including Lot No. 36 since the additional documents offered by Roxas & Co. mentioned the said lot. In granting the application, the DAR Secretary [30] examined anew the evidence submitted by Roxas & Co. which consisted mainly of certifications from various local and national government agencies.[31] Petitioner in G.R. Nos. 167505, 167540, 169163 and 179650, Damayan Ng Mga Manggagawang Bukid Sa AsyendaRoxas-National Federation of Sugar Workers (DAMBA-NFSW), the organization of the farmer-beneficiaries, moved to have the grant of the application reconsidered but the same was denied by the DAR by Order of December 12, 2003, hence, it filed a petition for certiorari before the Court of Appeals, docketed as CA-G.R. SP No. 82225, on grounds of forum-shopping and grave abuse of discretion. The appellate court, by Decision of October 31, 2006, ruled that DAMBA-NFSW availed of the wrong mode of appeal. At all events, it dismissed its petition as it upheld the DAR Secretarys ruling that Roxas & Co. did not commit forum-shopping, hence, the petition of DAMBA-NGSW in G.R. No. 179650. While ordinarily findings of facts of quasi-judicial agencies are generally accorded great weight and even finality by the Court if supported by substantial evidence in recognition of their expertise on the specific matters under their consideration, [32] this legal precept cannot be made to apply in G.R. No. 179650. Even as the existence and validity of Nasugbu MZO No. 4 had already been established, there remains in dispute the issue of whether the parcels of land involved in DAR Administrative Case No. A-9999-142-97 subject of G.R. No. 179650 are actually within the said zoning ordinance. The Court finds that the DAR Secretary indeed committed grave abuse of discretion when he ignored the glaring inconsistencies in the certifications submitted early on by Roxas & Co. in support of its application vis--vis the certifications it later submitted when the DAR Secretary reopened DAR Administrative Case No. A-9999-142-97. Notably, then DAR Secretary Horacio Morales, on one hand, observed that the landholdings covered by the aforesaid titles do not correspond to the Certification dated February 11, 1998 of the [HLURB], the Certification dated September 12, 1996 issued by the Municipal Planning and Development Coordinator, and the Certifications dated July 31, 1997 and May 27, 1997 issued by the National Irrigation Authority. On the other hand, then Secretary Hernani Braganza relied on a different set of certifications which were issued later or on September 19, 1996. In this regard, the Court finds in order the observation of DAMBA-NFSW that Roxas & Co. should have submitted the comprehensive land use plan and pointed therein the exact locations of the properties to prove that indeed they are within the area of coverage of Nasugbu MZO No. 4. The petitions in G.R. Nos. 179650 & 149548 must be distinguished from Junio v. Garilao [33] wherein the certifications submitted in support of the application for exemption of the therein subject lot were mainly considered on the presumption of regularity in their issuance, there being no doubt on the location and identity of the subject lot. [34] In G.R. No. 179650, there exist uncertainties on the location and identities of the properties being applied for exemption. G.R. No. 179650 & G.R. No. 149548 must accordingly be denied for lack of merit. III. ROXAS & CO.S APPLICATION FOR CARP EXEMPTION IN DAR ADMINISTRATIVE CASE NO. A-9999-008-98 FOR THE NINE PARCELS OF LAND IN HACIENDA PALICO SUBJECT OF G.R. NO. 167505 SHOULD BE GRANTED.

The Court, however, takes a different stance with respect to Roxas & Co.s application for CARP exemption in DAR Administrative Case No. A-9999-008-98 over nine parcels of land identified as Lot Nos. 20, 13, 37, 19-B, 45, 47, 49, 48-1 and 48-2 which are portions of TCT No. 985 covering 45.9771 hectares in Hacienda Palico, subject of G.R. No. 167505. In its application, Roxas & Co. submitted the following documents: 1. 2. Letter-application dated 29 September 1997 signed by Elino SJ. Napigkit, for and on behalf of Roxas & Company, Inc., seeking exemption from CARP coverage of subject landholdings; Secretarys Certificate dated September 2002 executed by Mariano M. Ampil III, Corporate Secretary of Roxas & Company, Inc., indicating a Board Resolution authorizing him to represent the corporation in its application for exemption with the DAR. The same Board Resolution revoked the authorization previously granted to the Sierra Management & Resources Corporation; Photocopy of TCT No. 985 and its corresponding Tax Declaration No. 0401; Location and vicinity maps of subject landholdings; Certification dated 10 July 1997 issued by Reynaldo Garcia, Municipal Planning and Development Coordinator (MPDC) and Zoning Administrator of Nasugbu, Batangas, stating that the subject parcels of land are within the Urban Core Zone as specified in Zone A. VII of Municipal Zoning Ordinance No. 4 , Series of 1982, approved by the Human Settlements Regulatory Commission (HSRC), now the Housing and Land Use Regulatory Board (HLURB), under Resolution No. 123, Series of 1983, dated 4 May 1983; Two (2) Certifications both dated 31 August 1998, issued by Alfredo Tan II, Director, HLURB, Region IV, stating that the subject parcels of land appear to be within the Residential cluster Area as specified in Zone VII of Municipal Zoning Ordinance No. 4 , Series of 1982, approved under HSRC Resolution No. 123, Series of 1983, dated 4 May 1983;[35] x x x x (emphasis and underscoring supplied) By Order of November 6, 2002, the DAR Secretary granted the application for exemption but issued the following conditions: 1. The farmer-occupants within subject parcels of land shall be maintained in their peaceful possession and cultivation of their respective areas of tillage until a final determination has been made on the amount of disturbance compensation due and entitlement of such farmeroccupants thereto by the PARAD of Batangas; No development shall be undertaken within the subject parcels of land until the appropriate disturbance compensation has been paid to the farmer-occupants who are determined by the PARAD to be entitled thereto. Proof of payment of disturbance compensation shall be submitted to this Office within ten (10) days from such payment; and The cancellation of the CLOA issued to the farmer-beneficiaries shall be subject of a separate proceeding before the PARAD of Batangas.
[36]

3. 4. 5.

6.

2.

3.

DAMBA-NSFW moved for reconsideration but the DAR Secretary denied the same and explained further why CLOA holders need not be informed of the pending application for exemption in this wise: As regards the first ground raised by [DAMBA-NSFW], it should be remembered that an application for CARP-exemption pursuant to DOJ Opinion No. 44, series of 1990, as implemented by DAR Administrative Order No. 6, series of 1994, is non-adversarial or non-litigious in nature. Hence, applicant is correct in saying that nowhere in the rules is it required that occupants of a landholding should be notified of an initiated or pending exemption application. xxxx With regard [to] the allegation that oppositors-movants are already CLOA holders of subject propert[ies] and deserve to be notified, as owners, of the initiated questioned exemption application, is of no moment. The Supreme Court in the case of Roxas [&] Co., Inc. v. Court of Appeals, 321 SCRA 106, held: We stress that the failure of respondent DAR to comply with the requisites of due process in the acquisition proceedings does not give this Court the power to nullify the CLOAs already issued to the farmer beneficiaries. x x x x. Anyhow, the farmer[-]beneficiaries hold the property in trust for the rightful owner of the land. Since subject landholding has been validly determined to be CARP-exempt, therefore, the previous issuance of the CLOA of oppositors-movants is erroneous. Hence, similar to the situation of the above-quoted Supreme Court Decision, oppositors-movants only hold the property in trust for the rightful owners of the land and are not the owners of subject landholding who should be notified of the exemption application of applicant Roxas & Company, Incorporated. Finally, this Office finds no substantial basis to reverse the assailed Orders since there is substantial compliance by the applicant with the requirements for the issuance of exemption clearance under DAR AO 6 (1994).[37] On DAMBA-NSFWs petition for certiorari, the Court of Appeals, noting that the petition was belatedly filed, sustained, by Decision of December 20, 1994 and Resolution of May 7, 2007,[38] the DAR Secretarys finding that Roxas & Co. had substantially complied with the prerequisites of DAR AO 6, Series of 1994. Hence, DAMBA-NFSWs petition in G.R. No. 167505. The Court finds no reversible error in the Court of Appeals assailed issuances, the orders of the DAR Secretary which it sustained being amply supported by evidence.

IV.

THE CLOAs ISSUED BY THE DAR in ADMINISTRATIVE CASE NO. A-9999-008-98 SUBJECT OF G.R. No. 179650 TO THE FARMER-BENEFICIARIES INVOLVING THE NINE PARCELS OF LAND IN HACIENDA PALICO MUST BE CANCELLED.

Turning now to the validity of the issuance of CLOAs in Hacienda Palico vis--vis the present dispositions: It bears recalling that in DAR Administrative Case Nos. A-9999-00898 and A-9999-142-97 (G.R. No. 179650), the Court ruled for Roxas & Co.s grant of exemption in DAR Administrative Case No. A-9999-008-98 but denied the grant of exemption in DAR Administrative Case No. A-9999-142-97 for reasons already discussed. It follows that the CLOAs issued to the farmer-beneficiaries in DAR Administrative Case No. A-9999-008-98 must be cancelled.

But first, the Court digresses. The assertion of DAMBA-NSFW that the petitions for partial and complete cancellations of the CLOAs subject of DARAB Case Nos. R-401-0032001 to R-401-005-2001 and No. 401-239-2001 violated the earlier order in Roxas v. Court of Appeals does not lie. Nowhere did the Court therein pronounce that the CLOAs issued cannot and should not be cancelled, what was involved therein being the legality of the acquisition proceedings. The Court merely reiterated that it is the DAR which has primary jurisdiction to rule on the validity of CLOAs. Thus it held: . . . [t]he failure of respondent DAR to comply with the requisites of due process in the acquisition proceedings does not give this Court the power to nullify the [CLOAs] already issued to the farmer-beneficiaries. To assume the power is to short-circuit the administrative process, which has yet to run its regular course. Respondent DAR must be given the chance to correct its procedural lapses in the acquisition proceedings. x x x x. Anyhow, the farmer beneficiaries hold the property in trust for the rightful owner of the land.[39]

On the procedural question raised by Roxas & Co. on the appellate courts relaxation of the rules by giving due course to DAMBA-NFSWs appeal in CA G.R. SP No. 72198, the subject of G.R. No. 167845: Indeed, the perfection of an appeal within the statutory period is jurisdictional and failure to do so renders the assailed decision final and executory. [40] A relaxation of the rules may, however, for meritorious reasons, be allowed in the interest of justice. [41] The Court finds that in giving due course to DAMBA-NSFWs appeal, the appellate court committed no reversible error. Consider its ratiocination: x x x x. To deny [DAMBA-NSFW]s appeal with the PARAD will not only affect their right over the parcel of land subject of this petition with an area of 103.1436 hectares, but also that of the whole area covered by CLOA No. 6654 since the PARAD rendered a Joint Resolution of the Motion for Reconsideration filed by the [DAMBA-NSFW] with regard to [Roxas & Co.]s application for partial and total cancellation of the CLOA in DARAB Cases No. R-401-003-2001 to R-401-005-2001 and No. 401-239-2001. There is a pressing need for an extensive discussion of the issues as raised by both parties as the matter of canceling CLOA No. 6654 is of utmost importance, involving as it does the probable displacement of hundreds of farmer-beneficiaries and their families. x x x x (underscoring supplied) Unlike courts of justice, the DARAB, as a quasi-judicial body, is not bound to strictly observe rules of procedure and evidence. To strictly enforce rules on appeals in this case would render to naught the Courts dispositions on the other issues in these consolidated petitions. In the main, there is no logical recourse except to cancel the CLOAs issued for the nine parcels of land identified as Lot Nos. 20, 13, 37, 19-B, 45, 47, 49, 48-1 and 48-2 which are portions of TCT No. 985 covering 45.9771 hectares in Hacienda Palico (or those covered by DAR Administrative Case No. A-9999-008-98). As for the rest of the CLOAs, they should be respected since Roxas & Co., as shown in the discussion in G.R. Nos. 167540, 167543 and 167505, failed to prove that the other lots in Hacienda Palico and the other two haciendas, aside from the above-mentioned nine lots, are CARP-exempt. Conformably, Republic Act No. 3844 (R.A. No. 3844), as amended, [42] mandates that disturbance compensation be given to tenants of parcels of land upon finding that (t)he landholding is declared by the department head upon recommendation of the National Planning Commission to be suited for residential, commercial, industrial or some other urban purposes.[43] In addition, DAR AO No. 6, Series of 1994 directs the payment of disturbance compensation before the application for exemption may be completely granted. Roxas & Co. is thus mandated to first satisfy the disturbance compensation of affected farmer-beneficiaries in the areas covered by the nine parcels of lands in DAR AO No. A9999-008-98 before the CLOAs covering them can be cancelled. And it is enjoined to strictly follow the instructions of R.A. No. 3844. Finally then, and in view of the Courts dispositions in G.R. Nos. 179650 and 167505, the May 27, 2001 Decision of the Provincial Agrarian Reform Adjudicator (PARAD) [44] in DARAB Case No. 401-239-2001 ordering the total cancellation of CLOA No. 6654, subject of G.R. No. 169163, is SET ASIDE except with respect to the CLOAs issued for Lot Nos. 20, 13, 37, 19-B, 45, 47, 49, 48-1 and 48-2 which are portions of TCT No. 985 covering 45.9771 hectares in Hacienda Palico (or those covered by DAR Administrative Case No. A-9999-008-98). It goes without saying that the motion for reconsideration of DAMBA-NFSW is granted to thus vacate the Courts October 19, 2005 Resolution dismissing DAMBA-NFSWs petition for review of the appellate courts Decision in CA-G.R. SP No. 75952;[45] WHEREFORE, 1) In G.R. No. 167540, the Court REVERSES and SETS ASIDE the November 24, 2003 Decision [46] and March 18, 2005 Resolution of the Court of Appeals in CA-G.R. SP No. 72131 which declared that Presidential Proclamation No. 1520 reclassified the lands in the municipalities of Nasugbu in Batangas and Maragondon and Ternate in Cavite to non-agricultural use; 2) The Court accordingly GRANTS the Motion for Reconsideration of the Department of Agrarian Reform in G.R. No. 167543 and REVERSES and SETS ASIDE its Resolution of July 20, 2005; 3) In G.R. No. 149548, the Court DENIES the petition for review of Roxas & Co. for lack of merit; 4) In G.R. No. 179650, the Court GRANTS the petition for review of DAMBA-NSFW and REVERSES and SETS ASIDE the October 31, 2006 Decision and August 16, 2007 Resolution of the Court of Appeals in CA-G.R. SP No. 82225; 5) In G.R. No. 167505, the Court DENIES the petition for review of DAMBA-NSFW and AFFIRMS the December 20, 2004 Decision and March 7, 2005Resolution of the Court of Appeals in CA-G.R. SP No. 82226; 6) In G.R. No. 167845, the Court DENIES Roxas & Co.s petition for review for lack of merit and AFFIRMS the September 10, 2004 Decision and April 14, 2005 Resolution of the Court of Appeals; 7) In G.R. No. 169163, the Court SETS ASIDE the Decisions of the Provincial Agrarian Reform Adjudicator in DARAB Case No. 401-239-2001 ordering the cancellation of CLOA No. 6654 and DARAB Cases Nos. R-401-003-2001 to No. R-401-005-2001 granting the partial cancellation of CLOA No. 6654. The CLOAs issued for Lots No. 21 No. 24, No. 26, No. 31, No. 32 and No. 34 or those covered by DAR Administrative Case No. A-9999-142-97) remain; and 8) Roxas & Co. is ORDERED to pay the disturbance compensation of affected farmer-beneficiaries in the areas covered by the nine parcels of lands in DAR Administrative Case No. A-9999-008-98 before the CLOAs therein can be cancelled, and is ENJOINED to strictly follow the mandate of R.A. No. 3844. No pronouncement as to costs. SO ORDERED.

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