AGRARIAN LAW 2017
anarchy," but the humanization of laws and the equalization of social and
HOW ASIA WORKS
Super short summary :)
SOUTH EAST ASIA
PH - landed elites, leftist people; land reform only worked through NGOs
Indonesia - evasion of land reform laws, much like PH
Malaysia - plantation-centric because of foreign powers, limits on the small-
scale farmers were made
Thailand - urban bias and export centric
NORTH EAST ASIA
Subsidies, buying at higher market price from farmers, cheaper fertilizers;
land reform was okay, but good policies will become bad ones at some point
in time
CONCEPT OF AGRARIAN REFORM
1987 CONSTITUTION
Art II Declaration of Principles and State Policies
Section 10. The State shall promote social justice in all phases of national
development.
Art XIII Social Justice and Human Rights
Section 1. The Congress shall give highest priority to the enactment of
measures that protect and enhance the right of all the people to human
dignity, reduce social, economic, and political inequalities, and remove
cultural inequities by equitably diffusing wealth and political power for the
common good.
To this end, the State shall regulate the acquisition, ownership, use, and
disposition of property and its increments.
Section 2. The promotion of social justice shall include the commitment to
create economic opportunities based on freedom of initiative and self-
reliance.
Social Justice
Case: Calalang v. Williams
The promotion of social justice, however, is to be achieved not through a
mistaken sympathy towards any given group.
Social justice is "neither communism, nor despotism, nor atomism, nor
economic forces by the State so that justice in its rational and objectively
secular conception may at least be approximated. Social justice means the
promotion of the welfare of all the people, the adoption by the Government
of measures calculated to insure economic stability of all the competent
elements of society, through the maintenance of a proper economic and
social equilibrium in the interrelations of the members of the community,
constitutionally, through the adoption of measures legally justifiable, or
extra-constitutionally, through the exercise of powers underlying the
existence of all governments on the time-honored principle of salus populi
est suprema lex.
Social justice, therefore, must be founded on the recognition of the
necessity of interdependence among divers and diverse units of a society
and of the protection that should be equally and evenly extended to all
groups as a combined force in our social and economic life, consistent with
the fundamental and paramount objective of the state of promoting the
health, comfort, and quiet of all persons, and of bringing about "the
greatest good to the greatest number.
Police Power is the power vested in the legislature by the Constitution to
make, ordain, establish all manner of wholesome and reasonable laws for
the good and welfare of the State and its people.
Eminent Domain is the inherent right of the State to condemn or to take
private property for public use upon payment of just compensation
Constitutional Issues
Case: Association of Small Landholders of the PH v. Sec of Agrarian Reform
Eminent domain is an inherent power of the State that enables it to forcibly
acquire private lands intended for public use upon payment of just
compensation to the owner. Obviously, there is no need to expropriate
where the owner is willing to sell under terms also acceptable to the
purchaser, in which case an ordinary deed of sale may be agreed upon by
the parties. It is only where the owner is unwilling to sell, or cannot accept
the price or other conditions offered by the vendee, that the power of
eminent domain will come into play to assert the paramount authority of
the State over the interests of the property owner. Private rights must then
yield to the irresistible demands of the public interest on the time-honored
justification, as in the case of the police power, that the welfare of the
people is the supreme law.
But for all its primacy and urgency, the power of expropriation is by no
means absolute (as indeed no power is absolute). The limitation is found in
the constitutional injunction that private property shall not be taken for
public use without just compensation
xxx
It cannot be denied from these cases that the traditional medium for the
payment of just compensation is money and no other. And so, conformably,
has just compensation been paid in the past solely in that medium. However,
we do not deal here with the traditional exercise of the power of eminent
domain. This is not an ordinary expropriation where only a specific property
of relatively limited area is sought to be taken by the State from its owner
for a specific and perhaps local purpose.
What we deal with here is a revolutionary kind of expropriation. The
expropriation before us affects all private agricultural lands whenever found
and of whatever kind as long as they are in excess of the maximum retention
limits allowed their owners. This kind of expropriation is intended for the
benefit not only of a particular community or of a small segment of the
population but of the entire Filipino nation, from all levels of our society,
from the impoverished farmer to the land-glutted owner. Cash or LBP bonds.
AGRICULTURAL TENANCY
RA 1199 as amended by RA 2263
Section 3. Agricultural Tenancy Defined. - Agricultural tenancy is the physical
possession by a person of land devoted to agriculture belonging to, or
legally possessed by, another for the purpose of production through the
labor of the former and of the members of his immediate farm household,
in consideration of which the former agrees to share the harvest with the
latter, or to pay a price certain or ascertainable, either in produce or in
money, or in both.
Section 5. Definitions of Terms. - As used in this Act:
(a) A tenant shall mean a person who, himself and with the aid available
from within his immediate farm household, cultivates the land belonging to,
or possessed by, another, with the latter's consent for purposes of
production, sharing the produce with the landholder under the share
tenancy system, or paying to the landholder a price certain or ascertainable
in produce or in money or both, under the leasehold tenancy system.
(b) A landholder shall mean a person, natural or juridical, who, either as
owner, lessee, usufructuary, or legal possessor, lets or grants to another the
use or cultivation of his land for a consideration either in shares under the
share tenancy system, or a price certain or ascertainable under the
leasehold tenancy system.
RA 3844
CHAPTER I
AGRICULTURAL LEASEHOLD SYSTEM
Section 4. Abolition of Agricultural Share Tenancy - Agricultural share
tenancy, as herein defined, is hereby declared to be contrary to public policy
and shall be abolished: Provided, That existing share tenancy contracts may
continue in force and effect in any region or locality, to be governed in the
meantime by the pertinent provisions of Republic Act Numbered Eleven
hundred and ninety-nine, as amended, until the end of the agricultural year
when the National Land Reform Council proclaims that all the government
machineries and agencies in that region or locality relating to leasehold
envisioned in this Code are operating, unless such contracts provide for a
shorter period or the tenant sooner exercise his option to elect the
leasehold system: Provided, further, That in order not to jeopardize
international commitments, lands devoted to crops covered by marketing
allotments shall be made the subject of a separate proclamation that
adequate provisions, such as the organization of cooperatives, marketing
agreements, or other similar workable arrangements, have been made to
insure efficient management on all matters requiring synchronization of the
agricultural with the processing phases of such crops: Provided,
furthermore, That where the agricultural share tenancy contract has ceased
to be operative by virtue of this Code, or where such a tenancy contract has
been entered into in violation of the provisions of this Code and is,
therefore, null and void, and the tenant continues in possession of the land
for cultivation, there shall be presumed to exist a leasehold relationship
under the provisions of this Code, without prejudice to the right of the
landowner and the former tenant to enter into any other lawful contract in
relation to the land formerly under tenancy contract, as long as in the
interim the security of tenure of the former tenant under Republic Act
Numbered Eleven hundred and ninety-nine, as amended, and as provided in
this Code, is not impaired: Provided, finally, That if a lawful leasehold
tenancy contract was entered into prior to the effectivity of this Code, the
rights and obligations arising therefrom shall continue to subsist until
modified by the parties in accordance with the provisions of this Code.
Section 5. Establishment of Agricultural Leasehold Relation - The agricultural
leasehold relation shall be established by operation of law in accordance
with Section four of this Code and, in other cases, either orally or in writing,
expressly or impliedly.
Section 6. Parties to Agricultural Leasehold Relation - The agricultural
leasehold relation shall be limited to the person who furnishes the
landholding, either as owner, civil law lessee, usufructuary, or legal
possessor, and the person who personally cultivates the same.
Section 7. Tenure of Agricultural Leasehold Relation - The agricultural
leasehold relation once established shall confer upon the agricultural lessee
the right to continue working on the landholding until such leasehold
relation is extinguished. The agricultural lessee shall be entitled to security
of tenure on his landholding and cannot be ejected therefrom unless
authorized by the Court for causes herein provided.
Section 8. Extinguishment of Agricultural Leasehold Relation - The
agricultural leasehold relation established under this Code shall be
extinguished by:
(1) Abandonment of the landholding without the knowledge of the
agricultural lessor;
(2) Voluntary surrender of the landholding by the agricultural lessee, written
notice of which shall be served three months in advance; or
(3) Absence of the persons under Section nine to succeed to the lessee, in
the event of death or permanent incapacity of the lessee.
Section 9. Agricultural Leasehold Relation Not Extinguished by Death or
Incapacity of the Parties - In case of death or permanent incapacity of the
agricultural lessee to work his landholding, the leasehold shall continue
between the agricultural lessor and the person who can cultivate the
landholding personally, chosen by the agricultural lessor within one month
from such death or permanent incapacity, from among the following: (a) the
surviving spouse; (b) the eldest direct descendant by consanguinity; or (c)
the next eldest descendant or descendants in the order of their age:
Provided, That in case the death or permanent incapacity of the agricultural
lessee occurs during the agricultural year, such choice shall be exercised at
the end of that agricultural year: Provided, further, That in the event the
agricultural lessor fails to exercise his choice within the periods herein
provided, the priority shall be in accordance with the order herein
established.
In case of death or permanent incapacity of the agricultural lessor, the
leasehold shall bind his legal heirs.
Section 10. Agricultural Leasehold Relation Not Extinguished by Expiration
of Period, etc. - The agricultural leasehold relation under this Code shall not
be extinguished by mere expiration of the term or period in a leasehold
contract nor by the sale, alienation or transfer of the legal possession of the
landholding. In case the agricultural lessor sells, alienates or transfers the
legal possession of the landholding, the purchaser or transferee thereof
shall be subrogated to the rights and substituted to the obligations of the
agricultural lessor.
Section 11. Lessee's Right of Pre-emption - In case the agricultural lessor
decides to sell the landholding, the agricultural lessee shall have the
preferential right to buy the same under reasonable terms and conditions:
Provided, That the entire landholding offered for sale must be pre-empted
by the Land Authority if the landowner so desires, unless the majority of the
lessees object to such acquisition: Provided, further, That where there are
two or more agricultural lessees, each shall be entitled to said preferential
right only to the extent of the area actually cultivated by him. The right of
pre-emption under this Section may be exercised within ninety days from
notice in writing which shall be served by the owner on all lessees affected.
Section 12. Lessee's Right of Redemption - In case the landholding is sold to
a third person without the knowledge of the agricultural lessee, the latter
shall have the right to redeem the same at a reasonable price and
consideration: Provided, That the entire landholding sold must be
redeemed: Provided, further, That where these are two or more agricultural
lessees, each shall be entitled to said right of redemption only to the extent
of the area actually cultivated by him. The right of redemption under this
Section may be exercised within two years from the registration of the sale,
and shall have priority over any other right of legal redemption.
Section 13. Affidavit Required in Sale of Land Subject to Right of Pre-
emption - No deed of sale of agricultural land under cultivation by an
agricultural lessee or lessees shall be recorded in the Registry of Property
unless accompanied by an affidavit of the vendor that he has given the
written notice required in Section eleven of this Chapter or that the land is
not worked by an agricultural lessee.
Section 14. Right of Pre-emption and Redemption Not Applicable to Land to
be Converted into Residential, Industrial and Similar Purposes - The right of
pre-emption and redemption granted under Sections eleven and twelve of
this Chapter cannot be exercised over landholdings suitably located which
the owner bought or holds for conversion into residential, commercial,
industrial or other similar non-agricultural purposes: Provided, however,
That the conversion be in good faith and is substantially carried out within
one year from the date of sale. Should the owner fail to comply with the
above condition, the agricultural lessee shall have the right to repurchase
under reasonable terms and conditions said landholding from said owner
within one year after the aforementioned period for conversion has
expired: Provided, however, That the tenure of one year shall cease to run
from the time the agricultural lessee petitions the Land Authority to acquire
the land under the provisions of paragraph 11 of Section fifty-one.
Section 15. Agricultural Leasehold Contract in General - The agricultural
lessor and the agricultural lessee shall be free to enter into any kind of
terms, conditions or stipulations in a leasehold contract, as long as they are
not contrary to law, morals or public policy. A term, condition or stipulation
in an agricultural leasehold contract is considered contrary to law, morals or
public policy:
(1) If the agricultural lessee is required to pay a rental in excess of that
which is hereinafter provided for in this Chapter;
(2) If the agricultural lessee is required to pay a consideration in excess of
the fair rental value as defined herein, for the use of work animals and/or
farm implements belonging to the agricultural lessor or to any other person;
or
(3) If it is imposed as a condition in the agricultural leasehold contract: (a)
that the agricultural lessee is required to rent work animals or to hire farm
implements from the agricultural lessor or a third person, or to make use of
any store or services operated by the agricultural lessor or a third person; or
(b) that the agricultural lessee is required to perform any work or render
any service other than his duties and obligations provided in this Chapter
with or without compensation; or (c) that the agricultural lessee is required
to answer for any fine, deductions and/or assessments.
Any contract by which the agricultural lessee is required to accept a loan or
to make payment therefor in kind shall also be contrary to law, morals or
public policy.
Section 16. Nature and Continuity of Conditions of Leasehold Contract - In
the absence of any agreement as to the period, the terms and conditions of
a leasehold contract shall continue until modified by the parties: Provided,
That in no case shall any modification of its terms and conditions prejudice
the right of the agricultural lessee to the security of his tenure on the
landholding: Provided, further, That in case of a contract with a period an
agricultural lessor may not, upon the expiration of the period increase the
rental except in accordance with the provisions of Section thirty-four.
Section 17. Form and Registration of Contract - Should the parties decide to
reduce their agreement into writing, the agricultural leasehold contract
shall be drawn in quadruplicate in a language or dialect known to the
agricultural lessee and signed or thumb-marked both by the agricultural
lessee personally and by the agricultural lessor or his authorized
representative, before two witnesses, to be chosen by each party. If the
agricultural lessee does not know how to read, the contents of the
document shall be read and explained to him by his witness. The contracting
parties shall acknowledge the execution of the contract before the justice of
the peace of the municipality where the land is situated. No fees or stamps
of any kind shall be required in the preparation and acknowledgment of the
instrument. Each of the contracting parties shall retain a copy of the
contract. The justice of the peace shall cause the third copy to be delivered
to the municipal treasurer of the municipality where the land is located and
the fourth copy to the Office of the Agrarian Counsel.
Except in case of mistake, violence, intimidation, undue influence, or fraud,
an agricultural contract reduced in writing and registered as hereinafter
provided, shall be conclusive between the contracting parties, if not
denounced or impugned within thirty days after its registration.
Section 18. Registration of Leasehold Contract - The municipal treasurer
shall, upon receipt of his copy of the contract, require the agricultural lessee
and agricultural lessor to present their respective copies of the contract,
and shall cause to be annotated thereon the date, time and place of
registration as well as its entry or registration number.
Section 19. Registry of Agricultural Leasehold Contracts - The Municipal
Treasurer of the municipality wherein the land is situated shall keep a
record of all such contracts drawn and executed within his jurisdiction, to be
known as "Registry of Agricultural Leasehold Contracts". He shall keep this
registry together with a copy of each contract entered therein, and make
annotations on said registry of all subsequent acts relative to each contract,
such as its renewal, novation, cancellation, etc. No registration fees or
documentary stamps shall be required in the registration of said contracts
or of any subsequent acts relative thereto.
Section 20. Memorandum of Loans - No obligation to pay money on account
of loans including interest thereon obtained by the agricultural lessee from
the agricultural lessor or his representative shall be enforceable unless the
same or a memorandum thereof be in writing in a language or dialect
known to the agricultural lessee, and signed or thumb-marked by him, or by
his agent.
Section 21. Exemption from Lien and/or Execution - The following shall be
exempt from lien and/or execution against the agricultural lessee:
(1) Twenty-five per centum of the entire produce of the land under
cultivation; and
(2) Work animals and farm implements belonging to the agricultural lessee:
Provided, That their value does not exceed one thousand pesos. But no
article or species of property mentioned in this Section shall be exempt
from execution issued upon a judgment recovered for its price or upon a
judgment of foreclosure of a mortgage thereon.
Section 22. Use of Accepted Standards of Weights and Measures - In all
transactions entered into between the agricultural lessee and the
agricultural lessor concerning agricultural products the official or, upon
agreement of the parties, the accepted standards of weights and measures
shall be used.
Section 23. Rights of Agricultural Lessee in General - It shall be the right of
the agricultural lessee:
(1) To have possession and peaceful enjoyment of the land;
(2) To manage and work on the land in a manner and method of cultivation
and harvest which conform to proven farm practices;
(3) To mechanize all or any phase of his farm work; and
(4) To deal with millers and processors and attend to the issuance of
quedans and warehouse receipts for the produce due him.
Section 24. Right to a Home Lot - The agricultural lessee shall have the right
to continue in the exclusive possession and enjoyment of any home lot he
may have occupied upon the effectivity of this Code, which shall be
considered as included in the leasehold.
Section 25. Right to be Indemnified for Labor - The agricultural lessee shall
have the right to be indemnified for the cost and expenses incurred in the
cultivation, planting or harvesting and other expenses incidental to the
improvement of his crop in case he surrenders or abandons his landholding
for just cause or is ejected therefrom. In addition, he has the right to be
indemnified for one-half of the necessary and useful improvements made
by him on the landholding: Provided, That these improvements are tangible
and have not yet lost their utility at the time of surrender and/or
abandonment of the landholding, at which time their value shall be
determined for the purpose of the indemnity for improvements.
Section 26. Obligations of the Lessee - It shall be the obligation of the
agricultural lessee:

(1) To cultivate and take care of the farm, growing crops, and other
improvements on the landholding as a good father of a family and perform
all the work therein in accordance with proven farm practices;
(2) To inform the agricultural lessor within a reasonable time of any trespass
committed by third persons upon the farm, without prejudice to his direct
action against the trespasser;
(3) To take reasonable care of the work animals and farm implements
delivered to him by the agricultural lessor and see that they are not used for
purposes other than those intended or used by another without the
knowledge and consent of the agricultural lessor: Provided, however, That if
said work animals get lost or die, or said farm implements get lost or are
destroyed, through the negligence of the agricultural lessee, he shall be held
responsible and made answerable therefor to the extent of the value of the
work animals and/or farm implements at the time of the loss, death or
destruction;
(4) To keep his farm and growing crops attended to during the work season.
In case of unjustified abandonment or neglect of his farm, any or all of his
expected produce may, upon order of the Court, be forfeited in favor of the
agricultural lessor to the extent of the damage caused thereby;
(5) To notify the agricultural lessor at least three days before the date of
harvesting or, whenever applicable, of threshing; and
(6) To pay the lease rental to the agricultural lessor when it falls due.
Section 27. Prohibitions to Agricultural Lessee - It shall be unlawful for the
agricultural lessee:
(1) To contract to work additional landholdings belonging to a different
agricultural lessor or to acquire and personally cultivate an economic family-
size farm, without the knowledge and consent of the agricultural lessor with
whom he had entered first into household, if the first landholding is of
sufficient size to make him and the members of his immediate farm
household fully occupied in its cultivation; or
(2) To employ a sub-lessee on his landholding: Provided, however, That in
case of illness or temporary incapacity he may employ laborers whose
services on his landholding shall be on his account.
Section 28. Termination of Leasehold by Agricultural Lessee During
Agricultural Year - The agricultural lessee may terminate the leasehold
during the agricultural year for any of the following causes:
(1) Cruel, inhuman or offensive, treatment of the agricultural lessee or any
member of his immediate farm household by the agricultural lessor or his
representative with the knowledge and consent of the lessor;
(2) Non-compliance on the part of the agricultural lessor with any of the
obligations imposed upon him by the provisions of this Code or by his
contact with the agricultural lessee;
(3) Compulsion of the agricultural lessee or any member of his immediate
farm household by the agricultural lessor to do any work or render any
service not in any way connected with farm work or even without
compulsion if no compensation is paid;
(4) Commission of a crime by the agricultural lessor or his representative
against the agricultural lessee or any member of his immediate farm
household; or
(5) Voluntary surrender due to circumstances more advantageous to him
and his family.
Section 29. Rights of the Agricultural Lessor - It shall be the right of the
agricultural lessor:
(1) To inspect and observe the extent of compliance with the terms and
conditions of their contract and the provisions of this Chapter;
(2) To propose a change in the use of the landholding to other agricultural
purposes, or in the kind of crops to be planted: Provided, That in case of
disagreement as to the proposed change, the same shall be settled by the
Court according to the best interest of the parties concerned: Provided,
further, That in no case shall an agricultural lessee be ejected as a
consequence of the conversion of the land to some other agricultural
purpose or because of a change in the crop to be planted;
(3) To require the agricultural lessee, taking into consideration his financial
capacity and the credit facilities available to him, to adopt in his farm
proven farm practices necessary to the conservation of the land,
improvement of its fertility and increase of its productivity: Provided, That
in case of disagreement as to what proven farm practice the lessee shall
adopt, the same shall be settled by the Court according to the best interest
of the parties concerned; and
(4) To mortgage expected rentals.
Section 30. Obligations of the Agricultural Lessor - It shall be the obligation
of the agricultural lessor:
(1) To keep the agricultural lessee in peaceful possession and cultivation of
his landholding; and
(2) To keep intact such permanent useful improvements existing on the
landholding at the start of the leasehold relation as irrigation and drainage
system and marketing allotments, which in the case of sugar quotas shall
refer both to domestic and export quotas, provisions of existing laws to the
contrary notwithstanding.
Section 31. Prohibitions to the Agricultural Lessor - It shall be unlawful for
the agricultural lessor:
(1) To dispossess the agricultural lessee of his landholding except upon
authorization by the Court under Section thirty-six. Should the agricultural
lessee be dispossessed of his landholding without authorization from the
Court, the agricultural lessor shall be liable for damages suffered by the
agricultural lessee in addition to the fine or imprisonment prescribed in this
Code for unauthorized dispossession;
(2) To require the agricultural lessee to assume, directly or indirectly, the
payment of the taxes or part thereof levied by the government on the
landholding;
(3) To require the agricultural lessee to assume, directly or indirectly, any
part of the rent, "canon" or other consideration which the agricultural lessor
is under obligation to pay to third persons for the use of the land;
(4) To deal with millers or processors without written authorization of the
lessee in cases where the crop has to be sold in processed form before
payment of the rental; or
(5) To discourage, directly or indirectly, the formation, maintenance or
growth of unions or organizations of agricultural lessees in his landholding,
or to initiate, dominate, assist or interfere in the formation or
administration of any such union or organization.
Section 32. Cost of Irrigation System - The cost of construction of a
permanent irrigation system, including distributory canals, may be borne
exclusively by the agricultural lessor who shall be entitled to an increase in
rental proportionate to the resultant increase in production: Provided, That
if the agricultural lessor refuses to bear the expenses of construction the
agricultural lessee or lessees may shoulder the same, in which case the
former shall not be entitled to an increase in rental and shall, upon the
termination of the relationship, pay the lessee or his heir the reasonable
value of the improvement at the time of the termination: Provided, further,
That if the irrigation system constructed does not work, it shall not be
considered as an improvement within the meaning of this Section.
Section 33. Manner, Time and Place of Rental Payment - The consideration
for the lease of the land shall be paid in an amount certain in money or in
produce, or both, payable at the place agreed upon by the parties
immediately after threshing or processing if the consideration is in kind, or
within a reasonable time thereafter, if not in kind.
In no case shall the agricultural lessor require the agricultural lessee to file a
bond, make a deposit or pay the rental in advance, in money or in kind or in
both, but a special and preferential lien is hereby created in favor of the
agricultural lessor over such portion of the gross harvest necessary for the
payment of the rental due in his favor.
Section 34. Consideration for the Lease of Riceland and Lands Devoted to
Other Crops - The consideration for the lease of riceland and lands devoted
to other crops shall not be more than the equivalent of twenty-five per
centum of the average normal harvest during the three agricultural years
immediately preceding the date the leasehold was established after
deducting the amount used for seeds and the cost of harvesting, threshing,
loading, hauling and processing, whichever are applicable: Provided, That if
the land has been cultivated for a period of less than three years, the initial
consideration shall be based on the average normal harvest during the
preceding years when the land was actually cultivated, or on the harvest of
the first year in the case of newly-cultivated lands, if that harvest is normal:
Provided, further, That after the lapse of the first three normal harvests, the
final consideration shall be based on the average normal harvest during
these three preceding agricultural years: Provided, furthermore, That in the
absence of any agreement between the parties as to the rental, the
maximum allowed herein shall apply: Provided, finally, That if capital
improvements are introduced on the farm not by the lessee to increase its
productivity, the rental shall be increased proportionately to the
consequent increase in production due to said improvements. In case of
disagreement, the Court shall determine the reasonable increase in rental.
Section 35. Exemption from Leasehold of Other Kinds of Lands -
Notwithstanding the provisions of the preceding Sections, in the case of
fishponds, saltbeds, and lands principally planted to citrus, coconuts, cacao,
coffee, durian, and other similar permanent trees at the time of the
approval of this Code, the consideration, as well as the tenancy system
prevailing, shall be governed by the provisions of Republic Act Numbered
Eleven hundred and ninety-nine, as amended.
Section 36. Possession of Landholding; Exceptions - Notwithstanding any
agreement as to the period or future surrender, of the land, an agricultural
lessee shall continue in the enjoyment and possession of his landholding
except when his dispossession has been authorized by the Court in a
judgment that is final and executory if after due hearing it is shown that:
(1) The agricultural lessor-owner or a member of his immediate family will
personally cultivate the landholding or will convert the landholding, if
suitably located, into residential, factory, hospital or school site or other
useful non-agricultural purposes: Provided; That the agricultural lessee shall
be entitled to disturbance compensation equivalent to five years rental on
his landholding in addition to his rights under Sections twenty-five and
thirty-four, except when the land owned and leased by the agricultural
lessor, is not more than five hectares, in which case instead of disturbance
compensation the lessee may be entitled to an advanced notice of at least
one agricultural year before ejectment proceedings are filed against him:
Provided, further, That should the landholder not cultivate the land himself
for three years or fail to substantially carry out such conversion within one
year after the dispossession of the tenant, it shall be presumed that he
acted in bad faith and the tenant shall have the right to demand possession
of the land and recover damages for any loss incurred by him because of
said dispossessions.
(2) The agricultural lessee failed to substantially comply with any of the
terms and conditions of the contract or any of the provisions of this Code
unless his failure is caused by fortuitous event or force majeure;
(3) The agricultural lessee planted crops or used the landholding for a
purpose other than what had been previously agreed upon;
(4) The agricultural lessee failed to adopt proven farm practices as
determined under paragraph 3 of Section twenty-nine;
(5) The land or other substantial permanent improvement thereon is
substantially damaged or destroyed or has unreasonably deteriorated
through the fault or negligence of the agricultural lessee;
(6) The agricultural lessee does not pay the lease rental when it falls due:
Provided, That if the non-payment of the rental shall be due to crop failure
to the extent of seventy-five per centum as a result of a fortuitous event,
the non-payment shall not be a ground for dispossession, although the
obligation to pay the rental due that particular crop is not thereby
extinguished; or
(7) The lessee employed a sub-lessee on his landholding in violation of the
terms of paragraph 2 of Section twenty-seven.
Section 37. Burden of Proof - The burden of proof to show the existence of a
lawful cause for the ejectment of an agricultural lessee shall rest upon the
agricultural lessor.
Section 38. Statute of Limitations - An action to enforce any cause of action
under this Code shall be barred if not commenced within three years after
such cause of action accrued.

ELEMENTS:
1. Parties are owner/possessor and tenant
2. Subject is agricultural land
3. Consent
4. Purpose is agricultural production
5. Compensation
6. Personal cultivation
Cases:
Cayetano and Tiongson v. CA
No tenancy relationship in the absence of any of the elements.
Cabales v. DAR
All these requisites must concur in order to create a tenancy relationship
between the parties. The absence of one does not make an occupant of a
parcel of land, or a cultivator thereof, or a planter thereon, a de jure tenant.
This is so because unless a person has established his status as a de jure
tenant, he is not entitled to security of tenure nor is he covered by the Land
Reform Program of the Government under existing tenancy laws.
Therefore, the fact of sharing alone is not sufficient to establish a tenancy
relationship. Certainly, it is not unusual for a landowner to accept some of
the produce of his land from someone who plants certain crops thereon. This
is a typical and laudable provinciano trait of sharing or patikim, a native way
of expressing gratitude for favor received. This, however, does not
automatically make the tiller-sharer a tenant thereof specially when the
area tilled is only 60, or even 500, square meters and located in an urban
area and in. the heart of an industrial or commercial zone at that. Tenancy
status arises only if an occupant of a parcel of land has been given its
possession for the primary purpose of agricultural production. The
circumstances of this case indicate that the private respondent's status is
more of a caretaker who was allowed by the owner out of benevolence or
compassion to live in the premises and to have a garden of some sort at its
southwestern side rather than a tenant of the said portion.
Hilario v. IAC
Tenancy is not a purely factual relationship dependent on what the alleged
tenant does upon the land. It is also a legal relationship. The intent of the
parties, the understanding when the farmer is installed, and, as in this case,
their written agreements, provided these are complied with and are not
contrary to law, are even more important."
The presumption assumed by the appellate court, that a parcel of land which
is located in a poblacion is not necessary devoted to residential purposes, is
wrong. It should be the other way around. A lot inside the poblacion should
be presumed residential or commercial or non-agricultural unless there is
clearly preponderant evidence to show that it is agricultural.
The respondent court also failed to note that the alleged tenant pays no
rental or share to the landowners. Baltazar made a vague allegation that he
shared 70-30 and 50-50 of the produce in his favor. The former owner flatly
denied that she ever received anything from him,
The requirements set by law for the existence of a tenancy relationship, to
wit: (1) The parties are the landholder and tenant; (2) The subject is
agricultural land; (3) The purpose is agricultural production; and (4) There is
consideration; have not been met by the private respondent.
We held in Tiongson v. Court of Appeals, cited above that: All these
requisites are necessary in order to create tenancy relationship between the
parties and the absence of one or more requisites do not make the alleged
tenant a de facto tenant as contradistinguished from a de jure tenant. This is
so because unless a person has established his status as a dejure tenant, he
is not entitled to security of tenure nor is he covered by the Land Reform
Program of the Government under existing tenancy laws ...
Qua v. CA
It is clear from the foregoing that the source of livelihood of private
respondents is not derived from the lots they are allegedly tenanting. This
conclusion is further supported by private respondent Carmen Carillo's
assertion that the auto repair shop was constructed with the consent of
petitioner's predecessor-in-interest for whom her husband served as a
driver-mechanic.
From private respondents' manner of caring for the lots, it is also apparent
that making the same agriculturally viable was not the main purpose of their
occupancy, or else they should have immediately replanted coconut trees in
place of those that did not survive.
Time and again, the Court has ruled that, as regards relations between
litigants in land cases, the findings and conclusions of the Secretary of
Agrarian Reform, being preliminary in nature, are not in any way binding on
the trial courts11 which must endeavor to arrive at their own independent
conclusions.
Had the Regional Trial Court hearkened to this doctrine, proceeded to so
conduct its own investigation and examined the facts of this case, a contrary
conclusion would have been reached, and the findings of the Municipal
Circuit Trial Court, sustained, particularly when the circumstances obtaining
in this case are examined in the light of the essential requisites set by law for
the existence of a tenancy relationship, thus: (1) the parties are the
landowner and the tenant; (2) the subject is agricultural land; (3) the
purpose is agricultural production; and (4) there is consideration. It is also
understood that (5) there is consent to the tenant to work on the land, that
(6) there is personal cultivation by him and that the consideration consists of
sharing the harvest
Guerrero v. CA
The records establish the private respondents' status as agricultural tenants
under the legal definitions.
Respondent Benitez has physically possessed the landholding continuously
from 1969 until he was ejected from it. Such possession of longstanding is an
essential distinction between a mere agricultural laborer and a real tenant
within the meaning of the tenancy law (Moreno, Philippine Law Dictionary,
1972 Edition), a tenant being one who, has the temporary use and
occupation of land or tenements belonging to another (Bouvier's Law
Dictionary, Vol. II,p. 3254) for the purpose of production (Sec. 3, Republic Act
1199; delos Reyes vs. Espinelli, 30 SCRA 574). Respondent Benitez lives on
the landholding. He built his house as an annex to the petitioner's copra kiln.
A hired laborer would not build his own house at his expense at the risk of
losing the same upon his dismissal or termination any time. Such conduct is
more consistent with that of an agricultural tenant who enjoys security of
tenure under the law.
Cultivation is another important factor in determining the existence of
tenancy relationships. It is admitted that it had been one Conrado Caruruan,
with others, who had originally cleared the land in question and planted the
coconut trees, with the respondent coming to work in the landholding only
after the same were already fruit bearing. The mere fact that it was not
respondent Benitez who had actually seeded the land does not mean that he
is not a tenant of the land. The definition of cultivation is not limited merely
to the tilling, plowing or harrowing of the land. It includes the promotion of
growth and the care of the plants, or husbanding the ground to forward the
products of the earth by general industry. The raising of coconuts is a unique
agricultural enterprise. Unlike rice, the planting of coconut seedlings does
not need harrowing and plowing. Holes are merely dug on the ground of
sufficient depth and distance, the seedlings placed in the holes and the
surface thereof covered by soil. Some coconut trees are planted only every
thirty to a hundred years. The major work in raising coconuts begins when
the coconut trees are already fruitbearing. Then it is cultivated by smudging
or smoking the plantation, taking care of the coconut trees, applying
fertilizer, weeding and watering, thereby increasing the produce. The fact
that respondent Benitez, together with his family, handles all phases of
farmwork from clearing the landholding to the processing of copra, although
at times with the aid of hired laborers, thereby cultivating the land, shows
that he is a tenant, not a mere farm laborer. (delos Reyes vs. Espinelli, supra
Marcelo vs. de Leon, 105 Phil. 1175).
Further indicating the existence of a tenancy relationship between
petitioners and respondent is their agreement to share the produce or
harvest on a "tercio basis" that is, a 1/3 to 2/3 sharing in favor of the
petitioner-landowners. Though not a positive indication of the existence of
tenancy relations per se the sharing of harvest taken together with other
factors characteristic of tenancy shown to be present in the case at bar,
strengthens the claim of respondent that indeed, he is a tenant.
RIGHT OF SECURITY OF TENURE Maam: #1 pillar of Agrarian Law
Cases:
Talavera v. CA
The very essence of agricultural tenancy lies in the cardinal rule that an
agricultural tenant enjoys security of tenurial status. The Code of Agrarian
Reforms of the Philippines (Republic Act No. 3844, as amended) specifically
enumerates the grounds for the extinguishment of agricultural leasehold
relations. Section 8 of the said Code provides:
Extinguishment of agricultural leasehold relation. The agricultural
leasehold relation established under this Code shall be extinguished by:
(1) Abandonment of the landholding without the knowledge of the
agricultural lessor;
(2) Voluntary surrender of the land holding by the agricultural lessee, written
notice of which shall be served three months in advance; or
(3) Absence of the persons under Section rune to succeed to the lessee, in the
event of death or permanent incapacity of the lessee.
The petitioners invoke voluntary surrender under Paragraph 2 of Section 8 as
the reason for the end of the tenancy relationship.
Voluntary surrender, as a mode of extinguishment of tenancy relations, does
not require any court authorization considering that it involves the tenant's
own volition. (see Jacinto v. Court of Appeals, 87 SCRA 263 [1978]). To
protect the tenant's right to security of tenure, voluntary surrender, as
contemplated by law, must be convincingly and sufficiently proved by
competent evidence. The tenant's intention to surrender the landholding
cannot be presumed, much less determined by mere implication. Otherwise,
the right of a tenant to security of tenure becomes an illusory one.
Endaya v. CA
R.A. No. 3844 (1963), as amended By R.A. No. 6839 (1971), which is the
relevant law governing the events at hand, abolished share tenancy
throughout the Philippines from 1971 and established the agricultural
leasehold system by operation of law. Section 7 of the said law gave
agricultural lessees security of tenure by providing the following: "The
agricultural leasehold relation once established shall confer upon the
agricultural lessee the right to continue working on the landholding until
such leasehold relation is extinguished. The agricultural lessee shall be
entitled to security of tenure on his landholding and cannot be ejected
therefrom unless authorized by the Court for causes herein provided." The
fact that the landowner entered into a civil lease contract over the subject
landholding and gave the lessee the authority to oversee the farming of the
land, as was done in this case, is not among the causes provided by law for
the extinguishment of the agricultural leasehold relation. On the contrary,
Section 10 of the law provides:
Sec. 10. Agricultural Leasehold Relation Not Extinguished by Expiration of
Period, etc. The agricultural leasehold relation under this code shall not
be extinguished by mere expiration of the term or period in a leasehold
contract nor by the sale, alienation or transfer of the legal possession of the
landholding. In case the agricultural lessor sells, alienates or transfers the
legal possession of the landholding, the purchaser or transferee thereof shall
be subrogated to the rights and substituted to the obligations of the
agricultural lessor
.
Hence, transactions involving the agricultural land over which an
agricultural leasehold subsists resulting in change of ownership, e.g., sale, or
transfer of legal possession, such as lease, will not terminate the right of the
agricultural lessee who is given protection by the law by making such rights
enforceable against the transferee or the landowner's successor in interest.
Illustrative of the legal principles outlined above is Catorce v. Court of
Appeals where the person holding a mortgage over the farm land subject of
an agricultural leasehold took possession thereof pursuant to the mortgage
and ousted the agricultural lessee. Upon complaint for reinstatement filed
by the agricultural lessee, the then Court of Agrarian Relations ordered the
mortgagee to deliver possession over the land to the agricultural lessee but
his decision was reversed by the Court of Appeals. In reversing the Court of
Appeals' judgment and reinstating the Agrarian Court's decision, the Court,
through Justice Melencio-Herrera, noted, among other considerations, that
"tenants are guaranteed security of tenure, meaning, the continued
enjoyment and possession of their landholding except when their
dispossession had been authorized by virtue of a final and executory
judgment, which is not so in the case at bar." Implicit in the decision is the
recognition that the transfer of possession to the mortgage did not
terminate the agricultural leasehold nor prejudice the security of tenure of
the agricultural lessee.
Milestone Reality v. CA
Section 9 of Republic Act No. 3844 is clear and unequivocal in providing for
the rules on succession to tenancy rights. A close examination of the
provision leaves no doubt as to its rationale of providing for continuity in
agricultural leasehold relation in case of death or incapacity of a party. To
this end, it provides that in case of death or permanent incapacity of the
agricultural lessee to work his landholding, the leasehold shall continue
between the agricultural lessor and the person who can cultivate the
landholding personally. In the same vein, the leasehold shall bind the legal
heirs of the agricultural lessor in case of death or permanent incapacity of
the latter. It is to achieve this continuity of relationship that the agricultural
lessor is mandated by law to choose a successor-tenant within one month
from the death or incapacity of the agricultural lessee from among the
following: (1) surviving spouse; (2) eldest direct descendant by
consanguinity; or (3) the next eldest direct descendant or descendants in the
order of their age. Should the lessor fail to exercise his choice within one
month from the death of the tenant, the priority shall be in accordance with
the aforementioned order.
Applying Section 9 of Republic Act 3844, in the light of prevailing
jurisprudence, it is undeniable that respondent Delia Razon Pea, the
surviving spouse of the original tenant, Anacleto Pea, is the first in the order
of preference to succeed to the tenancy rights of her husband because the
lessor, Carolina Zacarias, failed to exercise her right of choice within the one-
month period from the time of Anacletos death.
Villaviza v. Panganiban
A tenant's right to be respected in his tenure under Republic Act 1199, as
amended, is an obligation of the landholder created by law, and an action
for violation thereof prescribes in ten years under No. 2 of Article 1144 of
the Civil Code. The respondents were ousted from their landholdings in June,
1955, they filed the present action on 31 March 1960; therefore, the period
of limitation had not expired.
RIGHT OF PRE-EMPTION and REDEMPTION
Case: Basbas v. Entena
SEC. 11. Lessee's Right of Pre-emption. In case the agricultural lessor
decides to sell the landholding, the agricultural lessee shall have the
preferential right to buy the same under reasonable terms and conditions:
Provided, That the entire landholding offered for sale must be pre-empted by
the Land Authority if the owner so desires unless the majority of the lessees
object to such acquisitions: Provided, further, That where there are two or
more agricultural lessees, each shall be entitled to said preferential right
only to the extent of the area actually cultivated by him. The right of pre-
emption under this section may be exercised within ninety days from notice
in writing, which shall be served by the owner an all lessees affected.
SEC. 12. Lessee's Right of Redemption. In case the landholding is sold to a
third person without the knowledge of the agricultural lessee, the latter shall
have the right to redeem the same at a reasonable price and consideration:
Provided, That the entire landholding sold must be redeemed: Provided,
further, That where there are two or more agricultural lessees, each shall be
entitled to said right of redemption only to the extent of the area actually
cultivated by him. The right of redemption under this Section may be
exercised within two years from the registration of the sale, and shall have
priority over any other right of legal redemption.
LAWFUL CONSIDERATION
Case: Tan v. Pollescas
The Court agrees with the Court of Appeals that for non-payment of the
lease rental to be a valid ground to dispossess the agricultural lessee of the
landholding, the amount of the lease rental must first of all be lawful. If the
amount of lease rental claimed exceeds the limit allowed by law, non-
payment of lease rental cannot be a ground to dispossess the agricultural
lessee of the landholding.
Section 34 of RA 3844 as amended mandates that not x x x more than 25%
of the average normal harvest shall constitute the just and fair rental for
leasehold. In this case, the Tan Heirs demanded Reynalda to deliver 2/3 of
the harvest as lease rental, which clearly exceeded the 25% maximum
amount prescribed by law. Therefore, the Tan Heirs cannot validly dispossess
Reynalda of the landholding for non-payment of rental precisely because the
lease rental claimed by the Tan Heirs is unlawful.
SHARE TENANCY, ABOLITION
RA 1199
Section 4. Systems of Agricultural Tenancy; Their Definitions. - Agricultural
tenancy is classified into leasehold tenancy and share tenancy.
Share tenancy exists whenever two persons agree on a joint undertaking for
agricultural production wherein one party furnishes the land and the other
his labor, with either or both contributing any one or several of the items of
production, the tenant cultivating the land personally with the aid of labor
available from members of his immediate farm household, and the produce
thereof to be divided between the landholder and the tenant in proportion
to their respective contributions.
Leasehold tenancy exists when a person who, either personally or with the
aid of labor available from members of his immediate farm household,
undertakes to cultivate a piece of agricultural land susceptible of cultivation
by a single person together with members of his immediate farm
household, belonging to or legally possessed by, another in consideration of
a price certain or ascertainable to be paid by the person cultivating the land
either in percentage of the production or in a fixed amount in money, or in
both.
RA 2263
Section 1. The last paragraph of section four of Republic Act Numbered One
thousand one hundred ninety-nine is hereby amended to read as follows:
"Sec. 4. Systems of Agricultural Tenancy: Their Definitions.
xxx xxx xxx
"Leasehold tenancy exists when a person who, either personally or with the
aid of labor available form members of his immediate farm household,
undertakes to cultivate a piece of agricultural land susceptible of cultivation
by a single person together with members of his immediate farm
household, belonging to or legally possessed by, another in consideration of
a fixed amount in money or in produce or in both,"
Case: Hidalgo v. Hidalgo
1. The very essence of the Agricultural Land Reform Code is the abolition of
agricultural share tenancy as proclaimed in its title. Section 4 of the Code
expressly outlaws agricultural share tenancy as "contrary to public policy"
and decrees its abolition. 3 Section 2 of the Code expressly declares it to be
the policy of the State, inter alia, "to establish owner cultivatorship and the
economic family-size farm as the basis of Philippine agriculture and, as a
consequence, divert landlord capital in agriculture to industrial
development; to achieve a dignified existence for the small farmers free
from pernicious institutional restraints and practices; ... and to make the
small farmers more independent, self-reliant and responsible citizens, and a
source of strength in our democratic society." It was error, therefore, for the
agrarian court to state the premise after the Land Reform Code had already
been enacted, that "the systems of agricultural tenancy recognized in this
jurisdiction are share tenancy and leasehold tenancy." A more accurate
statement of the premise is that based on the transitory provision in the first
proviso of section 4 of the Code, i.e. that existing share tenancy contracts
are allowed to continue temporarily in force and effect, notwithstanding
their express abolition, until whichever of the following events occurs earlier:
(a) the end of the agricultural year when the National Land Reform Council
makes the proclamation declaring the region or locality a land reform area;
or (b) the shorter period provided in the share tenancy contracts expires; or
(c) the share tenant sooner exercises his option to elect the leasehold
system.
In anticipation of the expiration of share tenancy contracts whether by
contractual stipulation or the tenant's exercise of his option to elect the
leasehold system instead or by virtue of their nullity occuring before the
proclamation of the locality as a land reform area, the same section 4 has
further declared in the third provisothereof that in such event, the tenant
shall continue in possession of the land for cultivation and "there shall be
presumed to exist a leasehold relationship under the provisions of this
Code."
2. The foregoing exposes the error of the agrarian court's corollary premise
that "a share tenant is altogether different from a leasehold tenant." The
agrarian court's dictum that "their respective rights and obligations are not
co-extensive or co-equal "refer to their contractual relations with the
landowner, with respect to the contributions given, management, division or
payment of the produce.
But the Land Reform Code forges by operation of law, between the
landowner and the farmer be a leasehold tenant or temporarily a share
tenant a vinculum juris with certain vital juridical consequences, such as
security of tenure of the tenant and the tenant's right to continue in
possession of the land he works despite the expiration of the contract or the
sale or transfer of the land to third persons, and now, more basically, the
farmer's pre-emptive right to buy the land he cultivates under section 11 of
the Code6 as well as the right to redeem the land, if sold to a third person
without his knowledge, under section 12 of the Code.
This is an essential and indispensable mandate of the Code to implement the
state's policy of establishing owner cultivatorship and to achieve a dignified
and self-reliant existence for the small farmers that would make them a
pillar of strength of our Republic. Aside from expropriation by the Land
Authority of private agricultural land for resale in economic family-size farm
units "to bona fide tenants, occupants and qualified farmers,"7 the purchase
by farmers of the lands cultivated by them, when the owner decides to sell
the same through rights of pre-emption and redemption are the only
means prescribed by the Code to achieve the declared policy of the State.
Guerrero v. CA
With petitioner reference to this case, "share tenancy" exists whenever two
persons agree on a joint undertaking for agricultural production wherein one
party furnishes the land and the other his labor, with either or both
contributing any one or several of the items of production, the tenant
cultivating the land with the aid of labor available from members of his
immediate farm household, and the produce thereof to be divided between
the landholder and the tenant in proportion to their respective contributions
(Sec. 4, RA 1199; Sec. 166(25) RA 3844, Agricultural Land Reform Code).
There is no question that the latest law on land and tenancy reforms seeks
to abolish agricultural share tenancy as the basic relationship governing
farmers and landowners in the country.
On August 8, 1963, Republic Act 3844 abolished and outlawed share tenancy
and put in its stead the agricultural leasehold system. On September 10,
1971, Republic Act 6389 amending Republic Act 3844 declared share
tenancy relationships as contrary to public policy. On the basis of this
national policy, the petitioner asserts that no cause of action exists in the
case at bar and the lower court's committed grave error in upholding the
respondent's status as share tenant in the petitioners' landholding.
AGRARIAN LAW IMPLEMENTATION
SECTION 4. Scope. The Comprehensive Agrarian Reform Law of 1989 shall
cover, regardless of tenurial arrangement and commodity produced,
all public and private agricultural lands, as provided in Proclamation No. 131
and Executive Order No. 229, including other lands of the public domain
suitable for agriculture.
More specifically the following lands are covered by the
Comprehensive Agrarian Reform Program:
(a) All alienable and disposable lands of the public domain devoted to
or suitable for agriculture. No reclassification of forest or mineral lands
to agricultural lands shall be undertaken after the approval of this Act
until Congress, taking into account ecological, developmental and
equity considerations, shall have determined by law, the specific limits of
the public domain.
(b) All lands of the public domain in excess of the specific limits
as determined by Congress in the preceding paragraph;
(c) All other lands owned by the Government devoted to or suitable
for agriculture; and
(d) All private lands devoted to or suitable for agriculture regardless of
the agricultural products raised or that can be raised thereon.
JUST COMPENSATION
CONSTITUTION
ARTICLE XIII SECTION 4. The State shall, by law, undertake an agrarian
reform program founded on the right of farmers and regular farmworkers,
who are landless, to own directly or collectively the lands they till or, in the
case of other farmworkers, to receive a just share of the fruits thereof. To
this end, the State shall encourage and undertake the just distribution of all
agricultural lands, subject to such priorities and reasonable retention limits
as the Congress may prescribe, taking into account ecological,
developmental, or equity considerations, and subject to the payment of just
compensation. In determining retention limits, the State shall respect the
right of small landowners. The State shall further provide incentives for
voluntary land-sharing.
ARTICLE 3 SECTION 9. Private property shall not be taken for public use
without just compensation.
CASE: Association of Small Landholders of the PH v. Secretary of Agrarian
Reform
As held in Republic of the Philippines v. Castellvi, there is compensable
taking when the following conditions concur: (1) the expropriator must enter
a private property; (2) the entry must be for more than a momentary period;
(3) the entry must be under warrant or color of legal authority; (4) the
property must be devoted to public use or otherwise informally appropriated
or injuriously affected; and (5) the utilization of the property for public use
must be in such a way as to oust the owner and deprive him of beneficial
enjoyment of the property.
To be sure, the determination of just compensation is a function addressed
to the courts of justice and may not be usurped by any other branch or
official of the government. A reading of the aforecited Section 16(d) will
readily show that it does not suffer from the arbitrariness that rendered
the challenged decrees constitutionally objectionable. Although the
proceedings are described as summary, the landowner and other interested
parties are nevertheless allowed an opportunity to submit evidence on the
real value of the property. But more importantly, the determination of the
just compensation by the DAR is not by any means final and conclusive upon
the landowner or any other interested party.
The determination made by the DAR is only preliminary unless accepted by
all parties concerned. Otherwise, the courts of justice will still have the right
to review with finality the said determination in the exercise of what is
admittedly a judicial function.
It cannot be denied from these cases that the traditional medium for the
payment of just compensation is money and no other. And so,
conformably, has just compensation been paid in the past solely in that
medium. However, we do not deal here with the traditional exercise of
the power of eminent domain. This is not an ordinary expropriation
where only a specific property of relatively limited area is sought to be
taken by the State from its owner for a specific and perhaps local
purpose.
What we deal with here is a revolutionary kind of expropriation.
The expropriation before us affects all private agricultural lands
whenever found and of whatever kind as long as they are in excess of the
maximum retention limits allowed their owners. This kind of expropriation is
intended for the benefit not only of a particular community or of a small
segment of the population but of the entire Filipino nation, from all levels of
our society, from the impoverished farmer to the land-glutted owner.
RA No. 6657
CHAPTER VI
Compensation
Section 17. Determination of Just Compensation. In determining just
compensation, the cost of acquisition of the land, the current value of the
like properties, its nature, actual use and income, the sworn valuation by
the owner, the tax declarations, and the assessment made by government
assessors shall be considered. The social and economic benefits contributed
by the farmers and the farmworkers and by the Government to the
property as well as the non-payment of taxes or loans secured from any
government financing institution on the said land shall be considered as
additional factors to determine its valuation.
Section 18. Valuation and Mode of Compensation. The LBP shall
compensate the landowner in such amounts as may be agreed upon by the
landowner and the DAR and the LBP, in accordance with the criteria
provided for in Sections 16 and 17, and other pertinent provisions hereof, or
as may be finally determined by the court, as the just compensation for the
land.
The compensation shall be paid on one of the following modes, at the
(a) For lands above fifty (50) hectares, insofar as Twenty-five percent (25%) cash, the balance to
the excess hectarage is concerned. be paid in government financial instruments
negotiable at any time.
(b) For lands above twenty-four (24) hectares Thirty percent (30%) cash, the balance to be
and up to fifty (50) hectares. paid in government financial instruments
negotiable at any time.
(c) For lands twenty-four (24) hectares and Thirty-five percent (35%) cash, the balance to be
below. paid in government financial instruments
negotiable at any time.
option of the landowner:
(1) Cash payment, under the following terms and conditions;
(2) Shares of stock in government-owned or controlled
corporations, LBP preferred shares, physical assets or other
qualified investments in accordance with guidelines set by the
PARC;
(3) Tax credits which can be used against any tax liability;
(4) LBP bonds, which shall have the following features:
(a) Market interest rates aligned with 91-day treasury bill
rates. Ten percent (10%) of the face value of the bonds shall
mature every year from the date of issuance until the tenth
(10th) year: provided, that should the landowner choose to
forego the cash portion, whether in full or in part, he shall
be paid correspondingly in LBP bonds;
(b) Transferability and negotiability. Such LBP bonds may be
used by the landowner, his successors in interest or his
assigns, up to the amount of their face value, for any of the
following:
(i) Acquisition of land or other real properties of the
government, including assets under the Asset
Privatization Program and other assets foreclosed
by government financial institutions in the same
province or region where the lands for which the
bonds were paid are situated;
(ii) Acquisition of shares of stock of government-
owned or -controlled corporations or shares of
stocks owned by the government in private
corporations;
(iii) Substitution for surety or bail bonds for the
provisional release of accused persons, or
performance bonds;
(iv) Security for loans with any government financial
institution, provided the proceeds of the loans shall
be invested in an economic enterprise, preferably in
a small-and medium-scale industry, in the same
province or region as the land for which the bonds
are paid;
(v) Payment for various taxes and fees to
government; provided, that the use of these bonds
for these purposes will be limited to a certain
percentage of the outstanding balance of the
financial instruments: provided, further, that the
PARC shall determine the percentage mentioned
above;
(vi) Payment for tuition fees of the immediate
family of the original bondholder in government
universities, colleges, trade schools, and other
institutions;
(vii) Payment for fees of the immediate family of
the original bondholder in government hospitals;
and
(viii) Such other uses as the PARC may from time to
time allow.
In case of extraordinary inflation, the PARC shall take appropriate measures
to protect the economy.
Section 19. Incentives for Voluntary Offers for Sales. Landowners, other
than banks and other financial institutions, who voluntarily offer their lands
for sale shall be entitled to an additional five percent (5%) cash payment.
RA No. 9700
Section 7. Section 17of Republic Act No. 6657, as amended, is hereby
further amended to read as follows:
"SEC. 17. Determination of Just Compensation. - In determining just
compensation, the cost of acquisition of the land, the value of the
standing crop, the current: value of like properties, its nature, actual
use and income, the sworn valuation by the owner, the tax
declarations, the assessment made by government assessors, and
seventy percent (70%) of the zonal valuation of the Bureau of
Internal Revenue (BIR), translated into a basic formula by the DAR
shall be considered, subject to the final decision of the proper court.
The social and economic benefits contributed by the farmers and
the farmworkers and by the Government to the property as well as
the nonpayment of taxes or loans secured from any government
financing institution on the said land shall be considered as
additional factors to determine its valuation."
NOT TRUST DEPOSIT
Case: LBP v. Yap
The contention is untenable. Section 16(e) of RA 6657 provides as follows:
Sec. 16. Procedure for Acquisition of Private Lands xxx xxx xxx
(e) Upon receipt by the landowner of the corresponding payment or, in case
of rejection or no response from the landowner, upon the deposit with an
accessible bank designated by the DAR of the compensation in cash or in LBP
bonds in accordance with this Act, the DAR shall take immediate possession
of the land and shall request the proper Register of Deeds to issue a Transfer
Certificate of Title (TCT) in the name of the Republic of the Philippines.
It is very explicit therefrom that the deposit must be made only in "cash" or
in "LBP bonds". Nowhere does it appear nor can it be inferred that the
deposit can be made in any other form. If it were the intention to include a
"trust account" among the valid modes of deposit, that should have been
made express, or at least, qualifying words ought to have appeared from
which it can be fairly deduced that a "trust account" is allowed. In sum,
there is no ambiguity in Section 16(e) of RA 6657 to warrant an expanded
construction of the term "deposit".
FORMULA
Cases: LBP v. Rufino; LBP v. Banal; LBP v. Celada; LBP v. Soriano; LBP v.
Wycoco; LBP v. Rivera
The DAR, being the government agency primarily charged with the
implementation of the CARP, issued Administrative Order No. 6, Series of
1992 (DAR AO 6-92), as amended by DAR Administrative Order No. 11,
Series of 1994 (DAR AO 11-94), translating the factors mentioned in Section
17 of RA 6657 into a basic formula, presented as follows:
LV = (CNI x 0.6) + ( CS x 0.3) + (MV x 0.1)
Where: LV = Land Value
CNI = Capitalized Net Income
CS = Comparable Sales
MV = Market Value per Tax Declaration
The above formula shall be used if all the three factors are present, relevant,
and applicable.
A.1. When the CS factor is not present and CNI and MV are applicable, the
formula shall be:
LV = (CNI x 0.9) + (MV x 0.1)
A.2. When the CNI factor is not present, and CS and MV are applicable, the
formula shall be:
LV = (CS x 0.9) + (MV x 0.1)
A.3. When both the CS and CNI are not present and only MV is applicable,
the formula shall be:
LV = MV x 2
TIME OF TAKING
Cases:
Apo Fruits v. LBP
Apart from the requirement that compensation for expropriated land must
be fair and reasonable, compensation, to be just, must also be made without
delay. Without prompt payment, compensation cannot be considered "just"
if the property is immediately taken as the property owner suffers the
immediate deprivation of both his land and its fruits or income. This is the
principle at the core of the present case where the petitioners were made to
wait for more than a decade after the taking of their property before they
actually received the full amount of the principal of the just compensation
due them. What they have not received to date is the income of their
landholdings corresponding to what they would have received had no
uncompensated taking of these lands been immediately made. This income,
in terms of the interest on the unpaid principal, is the subject of the current
litigation.
We recognized in Republic v. Court of Appeals the need for prompt payment
and the necessity of the payment of interest to compensate for any delay in
the payment of compensation for property already taken. We ruled in this
case that:
The constitutional limitation of just compensation is considered to be the sum
equivalent to the market value of the property, broadly described to be the price
fixed by the seller in open market in the usual and ordinary course of legal action
and competition or the fair value of the property as between one who receives, and
one who desires to sell, i[f] fixed at the time of the actual taking by the government.
Thus, if property is taken for public use before compensation is deposited with the
court having jurisdiction over the case, the final compensation must include
interest[s] on its just value to be computed from the time the property is taken to
the time when compensation is actually paid or deposited with the court. In fine,
between the taking of the property and the actual payment, legal interest[s] accrue
in order to place the owner in a position as good as (but not better than) the
position he was in before the taking occurred.

Under the circumstances of the present case, we see no compelling reason
to depart from the rule that Republic firmly established. Let it be
remembered that shorn of its eminent domain and social justice aspects,
what the agrarian land reform program involves is the purchase by the
government, through the LBP, of agricultural lands for sale and distribution
to farmers. As a purchase, it involves an exchange of values the landholdings
in exchange for the LBPs payment. In determining the just compensation for
this exchange, however, the measure to be borne in mind is not the taker's
gain but the owner's loss since what is involved is the takeover of private
property under the States coercive power. As mentioned above, in the
value-for-value exchange in an eminent domain situation, the State must
ensure that the individual whose property is taken is not shortchanged and
must hence carry the burden of showing that the just compensation
requirement of the Bill of Rights is satisfied.
The owners loss, of course, is not only his property but also its income-
generating potential. Thus, when property is taken, full compensation of its
value must immediately be paid to achieve a fair exchange for the property
and the potential income lost. The just compensation is made available to
the property owner so that he may derive income from this compensation, in
the same manner that he would have derived income from his expropriated
property. If full compensation is not paid for property taken, then the State
must make up for the shortfall in the earning potential immediately lost due
to the taking, and the absence of replacement property from which income
can be derived; interest on the unpaid compensation becomes due as
compliance with the constitutional mandate on eminent domain and as a
basic measure of fairness.
LBP v. Soriano
LBP assails the imposition of 6% interest rate on the 18.0491 hectares of lot
valued at P133,751.65. It avers that the incremental interest due to the
respondents should be computed from the date of taking on 21 October
1972, not up to full payment of just compensation but up to the time LBP
approved the payment of their just compensation claim and a corresponding
deposit of the compensation proceeds was made by the bank. LBP relies
on the provisions of DAR Administrative Order No. 13, series of 1994, as
amended, which substantially provides that the grant of 6% yearly interest
compounded annually shall be reckoned from 21 October 1972 up to the
time of actual payment but not later than December 2006. LBP stresses that
under said Administrative Order, time of actual payment is defined as the
date when LBP approves the payment of the land transfer claim and
deposits the compensation proceeds in the name of the landowner in cash
and in bonds. In sum, LBP posits that the appellate court departed from the
express provision of DAR Administrative Order No. 13, as amended, by
imposing an interest to be reckoned from the time of taking up to the actual
payment of just compensation.
Respondents counter that the award of interest until full payment of just
compensation was correctly adhered to by the lower courts in line with the
Courts ruling in Land Bank of the Philippines v. Imperial, which found it
inequitable to determine just compensation based solely on the formula
provided by DAR Administrative Order No. 13, as amended. According to
respondents, the award of interest until full payment of just compensation is
to ensure prompt payment. Moreover, respondents claim that the date LBP
approves the payment of the land transfer claim and deposits
Administrative Order No. 13, as amended, was issued to compensate those
who were effectively deprived of their lands by expropriation. LBP relies on
said Administrative Order to justify its own computation of interest. A literal
reading of this Administrative Order seems to favor LBPs interpretation with
respect to the period covered by the interest rate. We quote the relevant
portion of the Administrative Order:
The grant of six percent (6%) yearly interest compounded annually shall be
reckoned as follows:
3.1 Tenanted as of 21 October 1972 and covered under OLT
- From 21 October 1972 up to the time of actual payment but not later than
December 2006
3.2 Tenanted after 21 October 1972 and covered under OLT
-From the date when the land was actually tenanted (by virtue of Regional Order of
Placement
issued prior to August 18, 1987) up to the time of actual payment but not later than
December 2006
Time of actual payment is the date when the Land Bank of the Philippines (LBP)
approves payment of the land transfer claim and deposits the compensation
proceeds in the name of the landowner (LO) in cash and in bonds. The release of
payment can be claimed by the landowner upon compliance with the documentary
requirements for release of payment.
However, as embodied in its Prefatory Statement, the intent of the
Administrative Order was precisely to address a situation where a number of
landholdings remain unpaid in view of the nonacceptance by the landowners
of the compensation due to low valuation. Had the landowner been paid
from the time of taking his land and the money deposited in a bank, the
money would have earned the same interest rate compounded annually as
authorized under banking laws, rules and regulations.
The concept of just compensation embraces not only the correct
determination of the amount to be paid to the owners of the land, but also
payment within a reasonable time from its taking. Without prompt
payment, compensation cannot be considered "just" inasmuch as the
property owner is made to suffer the consequences of being immediately
deprived of his land while being made to wait for a decade or more before
actually receiving the amount necessary to cope with his loss.
To condition the payment upon LBPs approval and its release upon
compliance with some documentary requirements would render nugatory
the very essence of prompt payment. Therefore, to expedite the payment of
just compensation, it is logical to conclude that the 6% interest rate be
imposed from the time of taking up to the time of full payment of just
compensation. Certainly, the trend of recent rulings bolsters this
interpretation.
RETENTION
Cases:
Daez v. CA
Exemption and retention in agrarian reform are two (2) distinct concepts.
P.D. No. 27, which implemented the Operation Land Transfer (OLT) Program,
covers tenanted rice or corn lands. The requisites for coverage under the OLT
program are the following: (1) the land must be devoted to rice or corn
crops; and (2) there must be a system of share-crop or lease-tenancy
obtaining therein. If either requisite is absent, a landowner may apply for
exemption. If either of these requisites is absent, the land is not covered
under OLT. Hence, a landowner need not apply for retention where
his ownership over the entire landholding is intact and undisturbed.
P.D. No. 27 grants each tenant of covered lands a five (5)-hectare lot, or in
case the land is irrigated, a three (3)-hectare lot constituting a family size
farm. However, said law allows a covered landowner to retain not more
than seven (7) hectares of his land if his aggregate landholding does not
exceed twenty-four (24) hectares. Otherwise, his entire landholding is
covered without him being entitled to any retention right.
Consequently, a landowner may keep his entire covered landholding if its
aggregate size does not exceed the retention limit of seven (7) hectares. In
effect, his land will not be covered at all by the OLT program although all
requisites for coverage are present. LOI No. 474 clarified the effective
coverage of OLT to include tenanted rice or corn lands of seven (7) hectares
or less, if the landowner owns other agricultural lands of more than seven
(7) hectares. The term "other agricultural lands" refers to lands other than
tenanted rice or corn lands from which the landowner derives ade
quate income to support his family.
Thus, on one hand, exemption from coverage of OLT lies if: (1) the land is not
devoted to rice or corn crops even if it is tenanted; or (2) the land is
untenanted even though it is devoted to rice or corn crops.
On the other hand, the requisites for the exercise by the landowner of his
right of retention are the following: (1) the land must be devoted to rice or
corn crops; (2) there must be a system of share-crop or lease-tenancy
obtaining therein; and (3) the size of the landholding must not exceed
twenty-four (24) hectares, or it could be more than twenty-four (24)
hectares provided that at least seven (7) hectares thereof are covered lands
and more than seven (7) hectares of it consist of "other agricultural
lands".
Clearly, then, the requisites for the grant of an application for exemption
from coverage of OLT and those for the grant of an application for the
exercise of a landowners right of retention, are different.
Sec. 6 of R.A. No. 6657, which provides, viz.:
SECTION 6. Retention Limits Except as otherwise provided in this Act, no person may
own or retain, directly or indirectly, any public or private agricultural land, the size
of which shall vary according to factors governing a viable family-size, such as
commodity produced, terrain, infrastructure, and soil fertility as determined by the
Presidential Agrarian Reform Council (PARC) created hereunder, but in no case shall
retention by the landowner exceed five (5) hectares. Three (3) hectares may be
awarded to each child of the landowner, subject to the following qualifications: (1)
that he is at least fifteen (15) years of age; and (2) that he is actually tilling the land
or directly managing the farm; Provided, That landowners whose land have been
covered by Presidential Decree No. 27 shall be allowed to keep the area originally
retained by them thereunder, further, That original homestead grantees or direct
compulsory heirs who still own the original homestead at the time of the approval of
this Act shall retain the same areas as long as
they continue to cultivate said homestead.
The right to choose the area to be retained, which shall be compact or contiguous,
shall pertain to the landowner. Provided, however, That in case the area selected for
retention by the landowner is tenanted, the tenant shall have the option to choose
whether to remain therein or be a beneficiary in the same or another agricultural
land with similar or comparable features. In case the tenant chooses to remain in
the retained area, he shall be considered a leaseholder and shall lose his right to be
a beneficiary under this Act. In case the tenant chooses to be a beneficiary in
another agricultural land, he loses his right as a lease-holder to the land retained by
the landowner. The tenant must exercise this option within a period of one (1) year
from the time the landowner manifests his choice of the area for retention.
In all cases, the security of tenure of the farmers or farmworkers on the land prior to
the approval of this Act shall be respected.
Upon the effectivity of this Act, any sale, disposition, lease, management contract or
transfer of possession of private lands executed by the original landowner in
violation of this Act shall be null and void; Provided, however, That those executed
prior to this Act shall be valid only when registered with the Register of Deeds within
a period of three (3) months after the effectivity of this Act. Thereafter, all Register
of Deeds shall inform the DAR within thirty (3) days of any transaction involving
agricultural lands in excess of five
(5) hectares"
Archbishop of Caceres v. DAR
The laws simply speak of the landowner without qualification as to under
what title the land is held or what rights to the land the landowner may
exercise. There is no distinction made whether the landowner holds naked
title only or can exercise all the rights of ownership. Archbishop would have
us read deeper into the law, to create exceptions that are not stated in PD
27 and RA 6657, and to do so would be to frustrate the revolutionary intent
of the law, which is the redistribution of agricultural land for the benefit of
landless farmers and farmworkers. Archbishop was found to be the
registered owner of the lands in question, and does not contest that fact. For
the purposes of the law, this makes him the landowner, without the
necessity of going beyond the registered titles. He cannot demand a deeper
examination of the registered titles and demand further that the intent of
the original owners be ascertained and followed. To adopt his reasoning
would create means of sidestepping the law, wherein the mere act of
donation places lands beyond the reach of agrarian reform.
There can be no claim of more than one right of retention per landowner.
Neither PD 27 nor RA 6657 has a provision for a landowner to exercise more
than one right of retention. The law is simple and clear as to the retention
limits per landowner. PD 27 states, In all cases, the landowner may retain an
area of not more than seven (7) hectares if such landowner is cultivating
such area or will now cultivate it; while RA 6657 states 5 hectares.
Nothing in either law supports Archbishops claim to more than one right of
retention on behalf of each cestui que trust. The provisions of PD 27 and RA
6657 are plain and require no further interpretation here is only one right of
retention per landowner, and no multiple rights of retention can be held by a
single party. Furthermore, the scheme proposed by Archbishop would create
as many rights of retention as there are beneficiaries, which could in effect
protect the entire available land area from agrarian reform. Under
Archbishops reasoning, there is not even a definite landowner to claim
separate rights of retention, and no specific number of rights of retention to
be claimed by the landowners. There is simply no basis in the law or
jurisprudence for his argument that it is the beneficial ownership that should
be used to determine which party would have the right of retention.
CONSTITUTION Art XIII
Agrarian and Natural Resources Reform
SECTION 4. The State shall, by law, undertake an agrarian reform program founded
on the right of farmers and regular farmworkers, who are landless, to own directly
or collectively the lands they till or, in the case of other farmworkers, to receive a
just share of the fruits thereof. To this end, the State shall encourage and undertake
the just distribution of all agricultural lands, subject to such priorities and
reasonable retention limits as the Congress may prescribe, taking into account
ecological, developmental, or equity considerations, and subject to the payment of
just compensation. In determining retention limits, the State shall respect the right
of small landowners. The State shall further provide incentives for voluntary land-
sharing
RA 6657
Section 6. Retention Limits. Except as otherwise provided in this Act, no person
may own or retain, directly or indirectly, any public or private agricultural land, the
size of which shall vary according to factors governing a viable family-size farm,
such as commodity produced, terrain, infrastructure, and soil fertility as determined
by the Presidential Agrarian Reform Council (PARC) created hereunder, but in no
case shall retention by the landowner exceed five (5) hectares. Three (3) hectares
may be awarded to each child of the landowner, subject to the following
qualifications: (1) that he is at least fifteen (15) years of age; and (2) that he is
actually tilling the land or directly managing the farm: provided, that landowners
whose lands have been covered by Presidential Decree No. 27 shall be allowed to
keep the areas originally retained by them thereunder: provided, further, that
original homestead grantees or their direct compulsory heirs who still own the
original homestead at the time of the approval of this Act shall retain the same
areas as long as they continue to cultivate said homestead.
The right to choose the area to be retained, which shall be compact or contiguous,
shall pertain to the landowner: provided, however, that in case the area selected
for retention by the landowner is tenanted, the tenant shall have the option to
choose whether to remain therein or be a beneficiary in the same or another
agricultural land with similar or comparable features.in case the tenant chooses to
remain in the retained area, he shall be considered a leaseholder and shall lose his
right to be a beneficiary under this Act.in case the tenant chooses to be a
beneficiary in another agricultural land, he loses his right as a leaseholder to the
land retained by the landowner. The tenant must exercise this option within a
period of one (1) year from the time the landowner manifests his choice of the area
for retention.
WHEREAS, last year, I ordered that small landowners of tenanted rice/corn lands
with areas of less than twenty-four hectares but above seven hectares shall retain
not more than seven hectares of such lands except when they own other
agricultural lands containing more than seven hectares or lands used for residential,
commercial, industrial or other urban purposes from which they derive adequate
income to support themselves and their families;
WHEREAS, the Department of Agrarian Reform found that in the course of
implementing my directive there are many landowners of tenanted rice/corn lands
with areas of seven hectares or less who also own other agricultural lands
containing more than seven hectares or lands used for residential, commercial,
industrial or other urban purposes where they derive adequate income to support
themselves and their families;
WHEREAS, it is therefore necessary to cover said lands under the Land Transfer
Program of the government to emancipate the tenant-farmers therein.
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, do
hereby order the following:
1. You shall undertake to place under the Land Transfer Program of the government
pursuant to Presidential Decree No. 27, all tenanted rice/corn lands with areas of
seven hectares or less belonging to landowners who own other agricultural lands of
more than seven hectares in aggregate areas or lands used for residential,
commercial, industrial or other urban purposes from which they derive adequate
income to support themselves and their families.

In all cases, the security of tenure of the farmers or farmworkers on the land prior
2. Landowners who may choose to be paid the cost of their lands by the Land Bank
to the approval of this Act shall be respected.
of the Philippines shall be paid in accordance with the mode of payment provided in
Letter of Instructions No. 273 dated May 7, 1973.
Upon the effectivity of this Act, any sale, disposition, lease, management, contract
or transfer of possession of private lands executed by the original landowner in
Done in the City of Manila, this 21st day of October in the year of Our Lord,
violation of the Act shall be null and void: provided, however, that those executed
nineteen hundred and seventy-six.
prior to this Act shall be valid only when registered with the Register of Deeds
within a period of three (3) months after the effectivity of this Act. Thereafter, all
(SGD.) FERDINAND E. MARCOS
Registers of Deeds shall inform the Department of Agrarian Reform (DAR) within
President of the Philippines
thirty (30) days of any transaction involving agricultural lands in excess of five (5)
hectares.
RA 6657
LETTER OF INSTRUCTIONS NO. 474
CHAPTER XV
General Provisions
TO: The Secretary of Agrarian Reform
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.
Cases:
Daez v. CA
Heirs of Grio v. CA
A landowner who failed to exercise his retention right of land under PD 27
may do so under RA 6657 provided he is qualified to do so under the regime
of PD 27. Stated differently, where a landowner is not entitled to retain land
under PD 27, he cannot avail of the right of retention over the same land
under RA 6657. In the case at hand, it is established that Juan Grio, Sr. was
not entitled to exercise his retention right over subject property under PD 27.
As such, he is also not entitled to exercise said right under RA 6657. If Juan
Grio, Sr. had no retention rights under PD 27 and RA 6657, it follows that
his heirs, who are his successors-in-interest, cannot also exercise the same
right under PD 27 and RA 6657.
What was certain at that point was that from the combined application of
P.D. 27 and LOI 474, Juan Grio, Sr. had no right of retention because he
owned 9 hectares of tenanted riceland and 50 hectares of coconut land.
Thus, his tenants were givenin 1981, during the lifetime of Juan Grio,
Sr.their Certificates of Land Transfers preparatory to the Emancipation
Patents they would receive if they can perfect their payments of their
portion of the covered riceland. Juan Grio, Sr. objected to the issuance of
the CLTs soon after. This was the status of Juan Grio, Sr.s retention rights
when he died in 1985.
xxxx
While Juan Grio seasonably objected to the CLTs, the objection was simply
a pending remedial action passed on to the heirs. This remedial action lost
its efficacy for the heirs when the DAR dismissed the petition on September
25, 1989 and their heirs failed to appeal the dismissal.
CONVERSION
Conversion vs. Reclassification
Case: Ros v. DAR
Conversion is different from reclassification. Conversion is the act of
changing the current use of a piece of agricultural land into some other use
as approved by the Department of Agrarian Reform. Reclassification, on the
other hand, is the act of specifying how agricultural lands shall be utilized for
non-agricultural uses such as residential, industrial, commercial, as
embodied in the land use plan, subject to the requirements and procedure
for land use conversion. Accordingly, a mere reclassification of agricultural
land does not automatically allow a landowner to change its use and thus
cause the ejectment of the tenants. He has to undergo the process of
conversion before he is permitted to use the agricultural land for other
purposes.
RA 6657
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.
GROUNDS
1. Land ceases to be economically feasible and sound for agricultural
purposes
2. Locality has become urbanized and the land will have a greater
economic value for residential, commercial or industrial purposes
PROHIBITION: IRRIGATED OR IRRIGABLE
5 YEAR DEVELOPMENT PERIOD
AWARDED LAND:
5 YEAR PROHIBITION
INVESTMENT REQUIREMENT (10%)
FULL PAYMENT
CASES:
Alarcon v. CA
The subject landholding was merely reclassified. Conversion is different from
reclassification. Conversion is the act of changing the current use of a piece
of agricultural land into some other use as approved by the Department of
Agrarian Reform. Reclassification, on the other hand, is the act of specifying
how agricultural lands shall be utilized for non-agricultural uses such as
residential, industrial, commercial, as embodied in the land use plan, subject
to the requirements and procedure for land use conversion. Accordingly, a
mere reclassification of agricultural land does not automatically allow a
landowner to change its use and thus cause the ejectment of the tenants. He
has to undergo the process of conversion before he is permitted to use the
agricultural land for other purposes. Since in this case, there is neither a final
order of conversion by the DAR nor a court judgment authorizing the
tenants ejectment on the ground of reclassification, as a result of the
landowners court action, there is no legal basis to make respondent liable
to pay disturbance compensation. Accordingly, the Court of Appeals
committed no error in ordering the dismissal of the complaint before
the DARAB.
Province of CamSur v. CA
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:
SEC. 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.
CANCELLATION AND INDEFEASIBILITY OF TITLE
RA 9700
Section 9. Section 24 of Republic Act No. 6657, as amended, is hereby
further amended to read as follows:
"SEC. 24. Award to Beneficiaries. - The rights and responsibilities of the
beneficiaries shall commence from their receipt of a duly registered
emancipation patent or certificate of land ownership award and their actual
physical possession of the awarded land. Such award shall be completed in
not more than one hundred eighty (180) days from the date of registration
of the title in the name of the Republic of the Philippines: Provided, That the
emancipation patents, the certificates of land ownership award, and other
titles issued under any agrarian reform program shall be indefeasible and
imprescriptible after one (1) year from its registration with the Office of the
Registry of Deeds, subject to the conditions, limitations and qualifications of
this Act, the property registration decree, and other pertinent laws. The
emancipation patents or the certificates of land ownership award being
titles brought under the operation of the torrens system, are conferred with
the same indefeasibility and security afforded to all titles under the said
system, as provided for by Presidential Decree No. 1529, as amended by
Republic Act No. 6732.
"It is the ministerial duty of the Registry of Deeds to register the title of the
land in the name of the Republic of the Philippines, after the Land Bank of
the Philippines (LBP) has certified that the necessary deposit in the name of
the landowner constituting full payment in cash or in bond with due notice
to the landowner and the registration of the certificate of land ownership
award issued to the beneficiaries, and to cancel previous titles pertaining
thereto.
"Identified and qualified agrarian reform beneficiaries, based on Section 22
of Republic Act No. 6657, as, amended, shall have usufructuary rights over
the awarded land as soon as the DAR takes possession of such land, and
such right shall not be diminished even pending the awarding of the
emancipation patent or the certificate of land ownership award.
"All cases involving the cancellation of registered emancipation patents,
certificates of land ownership award, and other titles issued under any
agrarian reform program are within the exclusive and original jurisdiction of
the Secretary of the DAR."
PD 1529
CLT Certificate of Land Transfer
EP Emancipation Patents
Cases:
Heirs of Grio v. CA
Juan Grio, Sr. had no right of retention because he owned 9 hectares of
tenanted riceland and 50 hectares of coconut land. Thus, his tenants were
givenin 1981, during the lifetime of Juan Grio, Sr.their Certificates of
Land Transfers preparatory to the Emancipation Patents they would receive
if they can perfect their payments of their portion of the covered riceland.
Juan Grio, Sr. objected to the issuance of the Certificate of Land Transfer
(CLTs) soon after. This was the status of Juan Grio, Sr.s retention rights
when he died in 1985.
xxxx
While Juan Grio seasonably objected to the CLTs, the objection was simply
a pending remedial action passed on to the heirs. This remedial action lost
its efficacy for the heirs when the DAR dismissed the petition on September
25, 1989 and their heirs failed to appeal the dismissal. x x x
xxxx
Additionally, when the heirs of Juan Grio, Sr. filed their application for
retention under RA 6657 in 1997 they had to contend with an existing
adverse ruling by the DARthe order of September 25, 1989 and the CLTs
the ruling confirmed. In 1997, the estate of Juan Grio, Sr. could no longer
file a petition that would question the denial of Juan Grio, Sr.s retention
rights as res judicata had then set in.
Estribillo v. DAR
Certificates of title issued in administrative proceedings are as indefeasible
as certificates of title issued in judicial proceedings.
The same confusion, uncertainty and suspicion on the distribution of
government-acquired lands to the landless would arise if the possession of
the grantee of an EP would still be subject to contest, just because his
certificate of title was issued in an administrative proceeding. The silence of
Presidential Decree No. 27 as to the indefeasibility of titles issued pursuant
thereto is the same as that in the Public Land Act.
After complying with the procedure, therefore, in Section 105 of Presidential
Decree No. 1529, otherwise known as the Property Registration Decree
(where the DAR is required to issue the corresponding certificate of title after
granting an EP to tenant-farmers who have complied with Presidential
Decree No. 27), the TCTs issued to petitioners pursuant to their EPs acquire
the same protection accorded to other TCTs. The certificate of title becomes
indefeasible and incontrovertible upon the expiration of one year from the
date of the issuance of the order for the issuance of the patent, x x x. Lands
covered by such title may no longer be the subject matter of a cadastral
proceeding, nor can it be decreed to another person.
The EPs themselves, like the Certificates of Land Ownership Award (CLOAs)
in Republic Act No. 6657 (the Comprehensive Agrarian Reform Law of 1988),
are enrolled in the Torrens system of registration. The Property Registration
Decree in fact devotes Chapter IX on the subject of EPs. Indeed, such EPs and
CLOAs are, in themselves, entitled to be as indefeasible as certificates of title
issued in registration proceedings.

Deleste v. LBP
Prior to compliance with the prescribed requirements, tenant-farmers have,
at most, an inchoate right over the land they were tilling. In recognition of
this, a CLT is issued to a tenant-farmer to serve as a provisional title of
ownership over the landholding while the lot owner is awaiting full payment
of [just compensation] or for as long as the [tenant-farmer] is an amortizing
owner.
This certificate proves inchoate ownership of an agricultural land primarily
devoted to rice and corn production. It is issued in order for the tenant-
farmer to acquire the land he was tilling. Concomitantly, with respect to the
LBP and the government, tenant-farmers cannot be considered as full
owners of the land they are tilling unless they have fully paid the
amortizations due them. This is because it is only upon such full payment of
the amortizations that EPs may be issued in their favor.

In Del Castillo v. Orciga, We explained that land transfer under PD 27 is

effected in two (2) stages. The first stage is the issuance of a CLT to a
farmer-beneficiary as soon as the DAR transfers the landholding to the
farmer-beneficiary in recognition that said person is its deemed owner. And
the second stage is the issuance of an Emancipation Patents (EP) as proof of
full ownership of the landholding upon full payment of the annual
amortizations or lease rentals by the farmer-beneficiary.