Association of Small Landowners vs. Sec of Agrarian Reform

Association of Small Landowners vs. Sec of Agrarian Reform

GR No. 79310

175 SCRA 343 Political Law Constitutional Law Bill of Rights Equal Protection Valid ClassificationEminent Domain Just CompensationThese are four consolidated cases questioning the constitutionality of the Comprehensive Agrarian Reform Act(R.A. No. 6657and related laws i.e., Agrarian Land Reform Code or R.A. No. 3844).Brief background: Article XIII of the Constitution on Social Justice and Human Rights includes a call for the adoption by the State of an agrarian reform program. 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. RA 3844 was enacted in1963. P.D. No. 27 was promulgated in1972 to provide for the compulsory acquisition of private lands for distribution among tenant-farmers and to specify maximum retention limits for landowners. In1987, President Corazon Aquinoissued E.O. No. 228, declaring full land ownership in favor of the beneficiaries of PD 27 and providing for the valuation of still unvalued lands covered by the decree as well as the manner of their payment. In1987,P.P. No. 131, instituting a comprehensive agrarian reform program (CARP) was enacted; later, E.O. No. 229, providing the mechanics for its (PP131s) implementation, was also enacted. Afterwhich is the enactment of R.A. No. 6657, Comprehensive Agrarian Reform Law in 1988. This law, while considerably changing the earlier mentioned enactments, nevertheless gives them suppletory effect insofar as they are not inconsistent with its provisions.[Two of the consolidated cases are discussed below]G.R. No. 78742: (Association of Small Landowners vs Secretary)The Association of Small Landowners in the Philippines, Inc.sought exception from the land distribution scheme provided for in R.A. 6657. The Association is comprised of landowners of ricelands and cornlands whose landholdings do not exceed 7 hectares. They invoke that since their landholdings are less than 7 hectares, they should not be forced to distribute their land to their tenants under R.A. 6657 for they themselves have shown willingness to till their own land. In short, they want to be exempted from agrarian reform program because they claim to belong to a different class.G.R. No. 79777: (Manaay vs Juico)Nicolas Manaay questioned the validity of the agrarian reform laws (PD 27, EO 228, and 229) on the ground that these laws already valuated their lands for the agrarian reform program and that the specific amount must be determined by the Department of Agrarian Reform (DAR). Manaay averred that this violated the principle in eminent domain which provides that only courts can determine just compensation. This, for Manaay, also violated due process for under the constitution, no property shall be taken for public use without just compensation.Manaay also questioned the provision which states that landowners may be paid for their land in bonds and not necessarily in cash. Manaay averred that just compensation has always been in the form of money and not in bonds.ISSUE:1. Whether or not there was a violation of the equal protection clause.2. Whether or not there is a violation of due process.3. Whether or not just compensation, under the agrarian reform program, must be in terms of cash.HELD:1. No. TheAssociation had not shown any proof that they belong to a different class exempt from the agrarian reform program. Under the law,classificationhas been defined as the grouping of persons or things similar to each other in certain particulars and different from each other in these same particulars. To be valid, it must conform to the following requirements:(1) it must be based on substantial distinctions;(2) it must be germane to the purposes of the law;(3) it must not be limited to existing conditions only; and(4) it must apply equally to all the members of the class.Equal protection simply means that all persons or things similarly situated must be treated alike both as to the rights conferred and the liabilities imposed. The Associationhave not shown that they belong to a different class and entitled to a different treatment. The argument that not only landowners but also owners of other properties must be made to share the burden of implementing land reform must be rejected. There is a substantial distinction between these two classes of owners that is clearly visible except to those who will not see. There is no need to elaborate on this matter. In any event, the Congress is allowed a wide leeway in providing for a valid classification. Its decision is accorded recognition and respect by the courts of justice except only where its discretion is abused to the detriment of the Bill of Rights. In the contrary, it appears that Congress is right in classifying small landowners as part of the agrarian reform program.2. No. It is true that the determination of just compensation is a power lodged in the courts. However, there is no law which prohibits administrative bodies like the DAR from determining just compensation. In fact, just compensation can be that amount agreed upon by the landowner and the government even without judicial intervention so long as both parties agree. The DAR can determine just compensation through appraisers and if the landowner agrees, then judicial intervention is not needed. What is contemplated by law however is that, the just compensation determined by an administrative body is merely preliminary. If the landowner does not agree with the finding of just compensation by an administrative body, then it can go to court and the determination of the latter shall be the final determination. This is even so provided by RA 6657:Section 16 (f):Any party who disagrees with the decision may bring the matter to the court of proper jurisdiction for final determination of just compensation.3. No. Money as [sole] payment for just compensation is merely a concept intraditional exercise of eminent domain. The agrarian reform program is a revolutionary exercise of eminent domain. The program will require billions of pesos in funds if all compensation have to be made in cash if everything is in cash, then the government will not have sufficient money hence, bonds, and other securities, i.e., shares of stocks, may be used for just compensation.Roxas and Co., Inc. vs Court of Appeals

GR 127876

December 17, 1999

Facts: This case involves three haciendas in Nasugbu Batangas owned by petitioner and the validity of the acquisition of these by the government under RA 6657 or the Comprehensive Agrarian Reform Law of 9188. Petitioner Roxas and Co. is a domestic corporation and is the registered owner of three haciendas, namely Hacienda Palico, Banilad and Caylaway. The events of this case occurred during the incumbency of then President Aquino,in the exercise of legislative power, the President signed on July 22, 1987, Proclamation No. 131 instituting a Comprehensive Agrarian Reform Program and Executive Order No. 229 providing the mechanisms necessary to initially implement the program. Congress passed Republic Act No. 6657;the Act was signed by the President on June 10, 1988 and took effect on June 15, 1988. Before the laws effectivity, petitioner filed with respondent DAR a voluntary offer to sell Hacienda Caylaway pursuant to the provisions ofEO No. 229. Haciendas Palico and Banilad were later placed under compulsory acquisition by respondent DAR in accordance with the CARL.

Petitioner was informed that 1,023.999 hectares of its land in Hacienda Palico were subject to immediate acquisition and distribution by the government under the CARL. Meanwhile in a letter dated May 4, 1993, petitioner applied with the DAR for conversion of Haciendas Palico and Banilad from agricultural to non-agricultural lands under the provisions of the CARL.Despite petitioners application for conversion, respondent DAR proceeded with the acquisition of the two Haciendas.The Land Bank of the Philippines trust accounts as compensation for Hacienda Palico were replaced by respondent DAR with cash and LBP bonds.On October 22, 1993, from the title ofthe Hacienda, respondent DAR registered Certificate of Land Ownership Award No. 6654.On October 30, 1993, CLOAs were distributed to farmer beneficiaries. On December 18, 1991, the LBP certified certain amounts in cash and LBP bonds had been earmarked as compensation for petitioners land in Hacienda Banilad. On May 4, 1993, petitioner applied for conversion of both Haciendas Palico and Banilad. Hacienda Caylaway was voluntarily offered for sale to the government on May 6, 1988 before the effectivity of the CARL. Nevertheless, on August 6, 1992, petitioner, through its President, Eduardo Roxas, sent a letter to the Secretary of respondent DAR withdrawing its VOS of Hacienda Caylaway.The Sangguniang Bayan of Nasugbu, Batangas allegedly authorized the reclassification of Hacienda Caylaway from agricultural to non-agricultural.As a result, petitioner informed respondent DAR that it was applying for conversion of Hacienda Caylaway from agricultural to other uses. Respondent DAR Secretary informed petitioner that a reclassification of the land would not exempt it from agrarian reform. On August 24, 1993, petitioner instituted a case with respondent DAR Adjudication Board praying for the cancellation of the CLOAs issued by respondent DAR in the name of the farmers.Petitioner alleged that the Municipality of Nasugbu, where the haciendas are located, had been declared a tourist zone, that the land is not suitable for agricultural production, and that the Sangguniang Bayan of Nasugbu had reclassified the land to non-agricultural. Respondent DARAB held that the case involved the prejudicial question of whether the property was subject to agrarian reform; hence, this question should be submitted to the Office of the Secretary of Agrarian Reform for determination.

Petitioner filed a petition with the CA.It questioned the expropriation of its properties under the CARL and the denial of due process in the acquisition of its landholdings. Meanwhile, the petition for conversion of the three haciendas was denied. Petitioners petition was dismissed by the CA. Hence, this recourse. Issue: Whether or not the acquisition proceedings over the haciendas were valid and in accordance with the law.

Held: No, for a valid implementation of the CAR Program, two notices are required first the Notice of Coverage and letter of invitationto a preliminary conference sent to the landowner, the representatives of the BARC, LBP, farmer beneficiaries and other interested parties and second, the Notice of Acquisition sentto the landowner under Section 16 of the CARL. The importance of the first notice, the Notice of Coverage and the letter of invitation to the conference, and its actual conduct cannot be understated.They are steps designed to comply with the requirements of administrative due process.The implementation of the CARL is an exercise of the States police power and the power of eminent domain.To the extent that the CARL prescribes retention limits to the landowners, there is an exercise of police power for the regulation of private property in accordance with the Constitution.But where, to carry out such regulation, the owners are deprived of lands they own in excess of the maximum area allowed, there is also a taking under the power of eminent domain. In this case, respondent DAR claims that it sent a letter of invitation to petitioner corporation, through Jaime Pimentel, the administrator of Hacienda Palico but he was not authorized as such by the corporation. The SC stressed that the failure of respondent DAR to comply with the requisites of due process in the acquisition proceedings does not give the SC the power to nullify the CLOAs already issued to the farmer beneficiaries.The Court said, to assume the power is to short-circuit the administrative process, which has yet to run its regular course.Respondent DAR must be given the chance to correct its procedural lapses in the acquisition proceedings. In Hacienda Palico alone, CLOA's were issued to 177 farmer beneficiaries in 1993.Since then until the present, these farmers have been cultivating their lands.It goes against the basic precepts of justice, fairness and equity to deprive these people, through no fault of their own, of the land they till. The petition is granted in part and the acquisition proceedings over the three haciendas are nullified for respondent DAR's failure to observe due process.

Hacienda Luisita Inc. (HLI) v. Presidential Agrarian Reform Council (PARC), et al., G.R. No. 171101, November 22, 2011R E S O L U T I O NVELASCO, JR.,J.:I.THE FACTSOn July 5, 2011, the Supreme Court en banc voted unanimously (11-0) to DISMISS/DENY the petition filed by HLI and AFFIRM with MODIFICATIONS the resolutions of the PARC revoking HLIs Stock Distribution Plan (SDP) and placing the subject lands in Hacienda Luisita under compulsory coverage of the Comprehensive Agrarian Reform Program (CARP) of the government.The Court howeverdid not order outright land distribution. Voting 6-5, the Court noted thatthere are operative facts that occurred in the interim and which the Court cannot validly ignore.Thus, the Court declared that the revocation of the SDP must, by application of the operative fact principle, give way to the right of the original 6,296 qualified farmworkers-beneficiaries (FWBs) to choose whether they want to remain as HLI stockholders or [choose actual land distribution]. It thus ordered the Department of Agrarian Reform (DAR) toimmediately schedule meetings with the said 6,296 FWBs and explain to them the effects, consequences and legal or practical implications of their choice, after which the FWBs will be asked to manifest, in secret voting, their choices in the ballot, signing their signatures or placing their thumbmarks, as the case may be, over their printed names. The parties thereafter filed their respective motions for reconsideration of the Court decision.II.THE ISSUES(1)Is the operative fact doctrine available in this case?(2)Is Sec. 31 of RA 6657 unconstitutional?(3)Cant the Court order that DARs compulsory acquisition of Hacienda Lusita cover the full6,443 hectares allegedly covered by RA 6657 and previously held by Tarlac Development Corporation (Tadeco), and not just the 4,915.75 hectares covered by HLIs SDP?(4)Is the date of the taking (for purposes of determining the just compensation payable to HLI) November 21, 1989, when PARC approved HLIs SDP?(5)Has the 10-year period prohibition on the transfer of awarded lands under RA 6657 lapsed on May 10, 1999 (since Hacienda Luisita were placed under CARP coverage through the SDOA scheme on May 11, 1989), and thus the qualified FWBs should now be allowed to sell their land interests in Hacienda Luisita to third parties, whether they have fully paid for the lands or not?(6)THE CRUCIAL ISSUE:Should the ruling in the July 5, 2011 Decision that the qualified FWBs be given an option to remain as stockholders of HLI be reconsidered?III.THE RULING[The CourtPARTIALLY GRANTEDthe motions for reconsideration of respondents PARC, et al.with respect to the option granted to the original farmworkers-beneficiaries (FWBs) of Hacienda Luisita to remain with petitioner HLI,which option the Court therebyRECALLEDandSET ASIDE. Itreconsidered its earlier decision that the qualified FWBs should be given an option to remain as stockholders of HLI, andUNANIMOUSLY directed immediate land distribution to the qualified FWBs.]1.YES, the operative fact doctrine is applicable in this case.[The Court maintained its stance that the operative fact doctrine is applicable in this case since, contrary to the suggestion of the minority, the doctrine is not limited only to invalid or unconstitutional laws but also applies to decisions made by the President or the administrative agencies that have the force and effect of laws.Prior to the nullification or recall of said decisions, they may have produced acts and consequences that must be respected. It is on this score that the operative fact doctrine should be applied to acts and consequences that resulted from the implementation of the PARC Resolution approving the SDP of HLI.The majority stressed that the application of the operative fact doctrine by the Court in its July 5, 2011 decision was in fact favorable to the FWBs because not only were they allowed to retain the benefits and homelots they received under the stock distribution scheme, they were also given the option to choose for themselves whether they want to remain as stockholders of HLI or not.]2.NO, Sec. 31 of RA 6657 NOT unconstitutional.[The Court maintained that the Court is NOT compelled to rule on the constitutionality of Sec. 31 of RA 6657, reiterating that it wasnot raised at the earliest opportunityand that the resolution thereof isnot the lis motaof the case. Moreover, the issue has been renderedmoot and academicsince SDO is no longer one of the modes of acquisition under RA 9700.The majority clarified that in its July 5, 2011 decision, it made no ruling in favor of the constitutionality of Sec. 31 of RA 6657, but found nonetheless that there was no apparent grave violation of the Constitution that may justify the resolution of the issue of constitutionality.]3.NO, the Court CANNOT order that DARs compulsory acquisition of Hacienda Lusita cover the full6,443 hectares and not just the 4,915.75 hectares covered by HLIs SDP.[Since what is put in issue before the Court is the propriety of the revocation of the SDP, which only involves 4,915.75 has. of agricultural land and not 6,443 has., then the Court is constrained to rule only as regards the 4,915.75 has. of agricultural land.Nonetheless, this should not prevent the DAR, under its mandate under the agrarian reform law, from subsequently subjecting to agrarian reform other agricultural lands originally held by Tadeco that were allegedly not transferred to HLI but were supposedly covered by RA 6657.However since the areato be awarded to each FWB in the July 5, 2011 Decision appears too restrictive considering that there are roads, irrigation canals, and other portions of the land that are considered commonly-owned by farmworkers, and these may necessarily result in the decrease of the area size that may be awarded per FWB the Court reconsiders its Decision and resolves to give the DAR leeway in adjusting the area that may be awarded per FWB in case the number of actual qualified FWBs decreases. In order to ensure the proper distribution of the agricultural lands of Hacienda Luisita per qualified FWB, and considering that matters involving strictly the administrative implementation and enforcement of agrarian reform laws are within the jurisdiction of the DAR,it is the latter which shall determine the area with which each qualified FWB will be awarded.On the other hand, the majority likewise reiterated its holding thatthe 500-hectare portion of Hacienda Luisita that have been validly converted to industrial use and have been acquired by intervenors Rizal Commercial Banking Corporation (RCBC) and Luisita Industrial Park Corporation (LIPCO), as well as the separate 80.51-hectare SCTEX lot acquired by the government, should be excluded from the coverage of the assailed PARC resolution. The Court however ordered that the unused balance of the proceeds of the sale of the 500-hectare converted land and of the 80.51-hectare land used for the SCTEX be distributed to the FWBs.]4.YES, the date of taking is November 21, 1989, when PARC approved HLIs SDP.[For the purpose of determining just compensation,the date of taking is November 21, 1989 (the date when PARC approved HLIs SDP) since this is the time that the FWBs were considered to own and possess the agricultural lands in Hacienda Luisita. To be precise, these lands became subject of the agrarian reform coverage through the stock distribution scheme only upon the approval of the SDP, that is, on November 21, 1989. Such approval is akin to a notice of coverage ordinarily issued under compulsory acquisition. On the contention of the minority (Justice Sereno) that the date of the notice of coverage [after PARCs revocation of the SDP], that is, January 2, 2006, is determinative of the just compensation that HLI is entitled to receive, the Court majority noted that none of the cases cited to justify this position involved the stock distribution scheme. Thus, said cases do not squarely apply to the instant case.The foregoing notwithstanding, it bears stressing that the DAR's land valuation is only preliminary and is not, by any means, final and conclusive upon the landowner. The landowner can file an original action with the RTC acting as a special agrarian court to determine just compensation. The court has the right to review with finality the determination in the exercise of what is admittedly a judicial function.]5.NO, the 10-year period prohibition on the transfer of awarded lands under RA 6657 has NOT lapsed on May 10, 1999; thus, the qualified FWBs should NOT yet be allowed to sell their land interests in Hacienda Luisita to third parties.[Under RA 6657 and DAO 1, the awarded lands may only be transferred or conveyed after 10 years from theissuanceandregistrationof the emancipation patent (EP) or certificate of land ownership award (CLOA). Considering that the EPs or CLOAs have not yet been issued to the qualified FWBs in the instant case, the 10-year prohibitive period has not even started. Significantly, the reckoning point isthe issuance of the EP or CLOA, andnot the placing of the agricultural lands under CARP coverage. Moreover, should the FWBs be immediately allowed the option to sell or convey their interest in the subject lands, then all efforts at agrarian reform would be rendered nugatory, since, at the end of the day, these lands will just be transferred to persons not entitled to land distribution under CARP.]6.YES, the ruling in the July 5, 2011 Decision that the qualified FWBs be given an option to remain as stockholders of HLI should be reconsidered.[The Court reconsidered its earlier decision that the qualified FWBs should be given an option to remain as stockholders of HLI, inasmuch as these qualified FWBs will never gain control [over the subject lands] given the present proportion of shareholdings in HLI. The Court noted that the share of the FWBs in the HLI capital stock is [just] 33.296%. Thus, even if all the holders of this 33.296% unanimously vote to remain as HLI stockholders, which is unlikely, control will never be in the hands of the FWBs.Control means the majority of [sic] 50% plus at least one share of the common shares and other voting shares.Applying the formula to the HLI stockholdings, the number of shares that will constitute the majority is 295,112,101 shares (590,554,220 total HLI capital shares divided by 2 plus one [1] HLI share).The 118,391,976.85 shares subject to the SDP approved by PARC substantially fall short of the 295,112,101 shares needed by the FWBs to acquire control over HLI.](FULL TEXT)GABINO ALITA, JESUS JULIAN, JR., JESUS JULIAN, SR., PEDRO RICALDE, VICENTE RICALDE and ROLANDO SALAMAR, petitioners, vs. THE HONORABLE COURT OF APPEALS, ENRIQUE M. REYES, PAZ M. REYES and FE M. REYES, respondents.Bureau of Agrarian Legal Assistance for petitioners.Leonardo N . Zulueta for Enrique Reyes, et al.Adolfo S. Azcuna for private respondents.SYLLABUS1.AGRARIAN REFORM LAW; PRES. DECREE NO. 27; DOES NOT COVER LANDS OBTAINED THROUGH A HOMESTEAD PATENT. The pivotal issue is whether or not lands obtained through homestead patent are covered by the Agrarian Reform under P.D. 27. The question certainly calls for a negative answer. We agree with the petitioners in saying that P.D. 27 decreeing the emancipation of tenants from the bondage of the soil and transferring to them ownership of the land they till is a sweeping social legislation, a remedial measure promulgated pursuant to the social justice precepts of the Constitution. However, such contention cannot be invoked to defeat the very purpose of the enactment of the Public Land Act or Commonwealth Act No. 141. Thus, "The Homestead Act has been enacted for the welfare and protection of the poor. The law gives a needy citizen a piece of land where he may build a modest house for himself and family and plant what is necessary for subsistence and for the satisfaction of life's other needs. The right of the citizens to their homes and to the things necessary for their subsistence is as vital as the right to life itself. They have a right to live with a certain degree of comfort as become human beings, and the State which looks after the welfare of the people's happiness is under a duty to safeguard the satisfaction of this vital right." (Patricio v. Bayog, 112 SCRA 45)2.COMPREHENSIVE AGRARIAN REFORM LAW OF 1988 (RA NO. 6657); MAINTAINS THE INAPPLICABILITY OF P.D. 27 OVER HOMESTEAD GRANTEES. It is worthy of note that the newly promulgated Comprehensive Agrarian Reform Law of 1988 or Republic Act No. 6657 likewise contains a proviso supporting the inapplicability of P.D. 27 to lands covered by homestead patents like those of the property in question, reading, "Section 6. Retention Limits . . . ". . . 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."D E C I S I O NPARAS, J p:Before Us is a petition seeking the reversal of the decision rendered by the respondent Court of Appeals ** on March 3, 1987 affirming the judgment of the court a quo dated April 29, 1986, the dispositive portion of the trial court's decision reading as follows;"WHEREFORE, the decision rendered by this Court on November 5, 1982 is hereby reconsidered and a new judgment is hereby rendered:"1.Declaring that Presidential Decree No. 27 is inapplicable to lands obtained thru the homestead law;"2.Declaring that the four registered co-owners will cultivate and operate the farmholding themselves as owners thereof; and"3.Ejecting from the land the so-called tenants, namely; Gabino Alita, Jesus Julian, Sr., Jesus Julian, Jr., Pedro Ricalde, Vicente Ricalde and Rolando Salamar, as the owners would want to cultivate the farmholding themselves."No pronouncement as to costs.SO ORDERED." (p. 31, Rollo)The facts are undisputed. The subject matter of the case consists of two (2) parcels of land, acquired by private respondents' predecessors-in-interest through homestead patent under the provisions of Commonwealth Act No. 141. Said lands are situated at Guilinan, Tungawan, Zamboanga del Sur.Private respondents herein are desirous of personally cultivating these lands, but petitioners refuse to vacate, relying on the provisions of P.D. 27 and P.D. 316 and appurtenant regulations issued by the then Ministry of Agrarian Reform (MAR for short), now Department of Agrarian Reform (DAR for short).On June 18, 1981, private respondents (then plaintiffs), instituted a complaint against Hon. Conrado Estrella as then Minister of Agrarian Reform, P.D. Macarambon as Regional Director of MAR Region IX, and herein petitioners (then defendants) for the declaration of P.D. 27 and all other Decrees, Letters of Instructions and General Orders issued in connection therewith as inapplicable to homestead lands.Defendants filed their answer with special and affirmative defenses of July 8, 1981. prLLSubsequently, on July 19, 1982, plaintiffs filed an urgent motion to enjoin the defendants from declaring the lands in litigation under Operation Land Transfer and from being issued land transfer certificates to which the defendants filed their opposition dated August 4, 1982.On November 5, 1982, the then Court of Agrarian Relations 16th Regional District, Branch IV, Pagadian City (now Regional Trial Court, 9th Judicial Region, Branch XVIII) rendered its decision dismissing the said complaint and the motion to enjoin the defendants was denied.On January 4, 1983, plaintiffs moved to reconsider the Order of dismissal, to which defendants filed their opposition on January 10, 1983.Thus, on April 29, 1986, the Regional Trial Court issued the aforequoted decision prompting defendants to move for a reconsideration but the same was denied in its Order dated June 6, 1986. LLphilOn appeal to the respondent Court of Appeals, the same was sustained in its judgment rendered on March 3, 1987, thus:"WHEREFORE, finding no reversible error thereof, the decision appealed from is hereby AFFIRMED."SO ORDERED." (p. 34, Rollo)Hence, the present petition for review on certiorari.The pivotal issue is whether or not lands obtained through homestead patent are covered by the Agrarian Reform under P.D. 27.The question certainly calls for a negative answer.We agree with the petitioners in saying that P.D. 27 decreeing the emancipation of tenants from the bondage of the soil and transferring to them ownership of the land they till is a sweeping social legislation, a remedial measure promulgated pursuant to the social justice precepts of the Constitution. However, such contention cannot be invoked to defeat the very purpose of the enactment of the Public Land Act or Commonwealth Act No. 141. Thus,"The Homestead Act has been enacted for the welfare and protection of the poor. The law gives a needy citizen a piece of land where he may build a modest house for himself and family and plant what is necessary for subsistence and for the satisfaction of life's other needs. The right of the citizens to their homes and to the things necessary for their subsistence is as vital as the right to life itself. They have a right to live with a certain degree of comfort as become human beings, and the State which looks after the welfare of the people's happiness is under a duty to safeguard the satisfaction of this vital right." (Patricio v. Bayog, 112 SCRA 45)In this regard, the Philippine Constitution likewise respects the superiority of the homesteaders' rights over the rights of the tenants guaranteed by the Agrarian Reform statute. In point is Section 6 of Article XIII of the 1987 Philippine Constitution which provides:"Section 6.The State shall apply the principles of agrarian reform or stewardship, whenever applicable in accordance with law, in the disposition or utilization of other natural resources, including lands of public domain under lease or concession suitable to agriculture, subject to prior rights, homestead rights of small settlers, and the rights of indigenous communities to their ancestral lands."Additionally, it is worthy of note that the newly promulgated Comprehensive Agrarian Reform Law of 1988 or Republic Act No. 6657 likewise contains a proviso supporting the inapplicability of P.D. 27 to lands covered by homestead patents like those of the property in question, reading,"Section 6.Retention Limits . . .". . . 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."WHEREFORE, premises considered, the decision of the respondent Court of Appeals sustaining the decision of the Regional Trial Court is hereby AFFIRMED.SO ORDERED.Melencio-Herrera, Padilla, Sarmiento and Regalado, JJ., concur.Footnotes

**Penned by Justice Jorge R. Coquia and concurred in by Justices Josue N. Bellosillo and Venancio D. Aldecoa, Jr. of the Fourth Division.

Natalia Realty, Inc. and Estate Developer and Investors Corp vs DARGR No 103302 August 12, 1993Facts:Natalia is the owner of 3 contiguous parcels of land with an area of 120.9793 hectares, 1.3205 hectares and 2.7080 hectares or a total of 125.0078 hectares, which are covered by TCT No. 31527. Presidential Proclamation No. 1637 set aside 20,312 hectares of land as townsite areas to absorb the population overspill in the metropolis which were designated as the Lungsod Silangan Townsite. The Natalia properties are situated within the areas proclaimed as townsite reservation. Since private landowners were allowed to develop their properties into low-cost housing subdivisions with the reservation, petitioner EDIC as developer of Natalia applied for and was granted preliminary approval and location clearances by the Human Settlements Regulatory Commission, which Natalia thereafter became Antipolo Hills Subdivision. On June 15 1988, Ra 6657 went to effect. Respondent issed a Notice of Coverage on the undeveloped portions of Antipolo Hills Subdivision. Natalia and EDIC immediately registered its objection to the notice of coverage and requested the cancellation of the Notice of Coverage.Natalia and EDIC both argued that the properties ceased to be agricultural lands when they were included in the areas reserved by Presidential Proclamation for the townsite reservation. DAR then contended that the permits granted were not valid and binding since they did not comply with t he implementing Standards, Rules and Regulations of PD 957 (The Subdivision and Condominium Buyers Protective Decree), and that there was no valid conversion of the properties.Issue:Whether or not lands not classified for agricultural use, as approved by the Housing and Land Use Regulatory Board and its agencies prior to June 15, 1988 covered by RA 6657.Ruling:No, Sec. 4 of RA 6657 provides that CARL shall cover, regardless of tenurial arrangement and commodity produced, all public and private agricultural lands. And agricultural lands is referred to as land devoted to agricultural activity and not classified as mineral, forst, residential, commercial or industrial land. Thus, the underdeveloped portions of the Antipolo Hills Subdivision cannot be considered as agricultural lands for this land was intended for residential use. They ceased to be agricultural land by virtue of the Presidential Proclamation No. 1637.(LUZ FARMS) (MATRIX FILE)

Department of Agrarian Reform, represented by Secretary Jose Mari B. Ponce (OIC)

vs

Delia T. Sutton, Ella T. Sutton-Soliman and Harry T. Sutton

G.R. No.162070Facts:This is a petition for review filed by the Department of Agrarian Reform (DAR) of the Decision and Resolution of the Court of Appeals, dated September 19, 2003 and February 4, 2004, respectively, which declared DAR Administrative Order (A.O.) No. 9, series of 1993, null and void for being violative of the Constitution.The case involves a land in Aroroy, Masbate, inherited by respondents which has been devoted exclusively to cow and calf breeding. On October 26, 1987, pursuant to the then existing agrarian reform program of the government, respondents made a voluntary offer to sell (VOS) their landholdings to petitioner DAR to avail of certain incentives under the law.On June 10, 1988, a new agrarian law, Republic Act (R.A.) No. 6657, also known as the Comprehensive Agrarian Reform Law (CARL) of 1988, took effect. It included in its coverage farms used for raising livestock, poultry and swine.On December 4, 1990, in anen bancdecision in the case of Luz Farms v. Secretary of DAR, the Court ruled that lands devoted to livestock and poultry-raising are not included in the definition of agricultural land and declared as unconstitutional certain provisions of the CARL insofar as they included livestock farms in the coverage of agrarian reform. In view of this, respondents filed with petitioner DAR a formal request to withdraw their VOS as their landholding was devoted exclusively to cattle-raising and thus exempted from the coverage of the CARL.On December 21, 1992, the Municipal Agrarian Reform Officer of Aroroy, Masbate, inspected respondents' land and found that it was devoted solely to cattle-raising and breeding. He recommended to the DAR Secretary that it be exempted from the coverage of the CARL.On April 27, 1993, respondents reiterated to petitioner DAR the withdrawal of their VOS and requested the return of the supporting papers they submitted in connection therewith. Petitioner ignored such request.On December 27, 1993, DAR issued A.O. No. 9, series of 1993, which provided that only portions of private agricultural lands used for the raising of livestock, poultry and swine as of June 15, 1988 shall be excluded from the coverage of the CARL. In determining the area of land to be excluded, the A.O. fixed the following retention limits,viz.: 1:1 animal-land ratio and a ratio of 1.7815 hectares for livestock infrastructure for every 21 heads of cattle shall likewise be excluded from the operations of the CARL.On February 4, 1994, respondents wrote the DAR Secretary and advised him to consider as final and irrevocable the withdrawal of their VOS as, under the Luz Farms doctrine, their entire landholding is exempted from the CARL.On September 14, 1995, then DAR Secretary Ernesto D. Garilao issued an Order partially granting the application of respondents for exemption from the coverage of CARL. Applying the retention limits outlined in the DAR A.O. No. 9, petitioner exempted 1,209 hectares of respondents' land for grazing purposes, and a maximum of 102.5635 hectares for infrastructure. Petitioner ordered the rest of respondents' landholding to be segregated and placed under Compulsory Acquisition.Respondents moved for reconsideration, contending that their entire landholding should be exempted as it is devoted exclusively to cattle-raising. Said motion was denied. Respondents filed a notice of appeal with the Office of the President assailing: (1) the reasonableness and validity of DAR A.O. No. 9, s. 1993, which provided for a ratio between land and livestock in determining the land area qualified for exclusion from the CARL, and (2) the constitutionality of DAR A.O. No. 9, s. 1993, in view of the Luz Farms case which declared cattle-raising lands excluded from the coverage of agrarian reform. The OP affirmed the impugned order. On appeal to CA, the CA ruled in favor of respondents and declared A.O. No. 9, Series of 1993 as void.Issue:Whether or not DAR Administrative Order No. 09, Series of 1993 which prescribes a maximum retention for owners of lands devoted to livestock raising is constitutional?Held:The impugned A.O. is invalid as it contravenes the Constitution. The A.O. sought to regulate livestock farms by including them in the coverage of agrarian reform and prescribing a maximum retention limit for their ownership. However, the deliberations of the 1987 Constitutional Commission show a clear intent to exclude,inter alia,all lands exclusively devoted to livestock, swine and poultry-raising. The Court clarified in the Luz Farms case that livestock, swine and poultry-raising are industrial activities and do not fall within the definition of "agriculture" or "agricultural activity." The raising of livestock, swine and poultry is different from crop or tree farming. It is an industrial, not an agricultural, activity. A great portion of the investment in this enterprise is in the form of industrial fixed assets, such as: animal housing structures and facilities, drainage, waterers and blowers, feedmill with grinders, mixers, conveyors, exhausts and generators, extensive warehousing facilities for feeds and other supplies, anti-pollution equipment like bio-gas and digester plants augmented by lagoons and concrete ponds, deepwells, elevated water tanks, pumphouses, sprayers, and other technological appurtenance.Petitioner DAR has no power to regulate livestock farms which have been exempted by the Constitution from the coverage of agrarian reform. It has exceeded its power in issuing the assailed A.O.Moreover, it is a fundamental rule of statutory construction that the reenactment of a statute by Congress without substantial change is an implied legislative approval and adoption of the previous law. On the other hand, by making a new law, Congress seeks to supersede an earlier one. In the case at bar, after the passage of the 1988 CARL, Congress enacted R.A. No. 7881 which amended certain provisions of the CARL. Specifically, the new law changed the definition of the terms "agricultural activity" and "commercial farming" by dropping from its coverage lands that are devoted to commercial livestock, poultry and swine-raising. With this significant modification, Congress clearly sought to align the provisions of our agrarian laws with the intent of the 1987 Constitutional Commission to exclude livestock farms from the coverage of agrarian reform.It is doctrinal that rules of administrative bodies must be in harmony with the provisions of the Constitution. They cannot amend or extend the Constitution. To be valid, they must conform to and be consistent with the Constitution. In case of conflict between an administrative order and the provisions of the Constitution, the latter prevails. The assailed A.O. of petitioner DAR was properly stricken down as unconstitutional as it enlarges the coverage of agrarian reform beyond the scope intended by the 1987 Constitution.Agrarian LawAgrarian Reform; exclusion and exemption from coverage. Thedeliberations of the 1987 Constitutional Commission show a clear intent to exclude, inter alia, all landsexclusivelydevoted to livestock, swine and poultry-raising from the coverage of the Comprehensive Agrarian Reform Program. Petitioners admission that, since 2001, it leased another ranch for its own livestock is fatal to its cause. The SC, in this case, accorded respect to the CAs observation that the assailed MARO reports and the Investigating Teams Report do not actually contradict one another, finding that the 43 cows, while owned by petitioner, were actually pastured outside the subject property.Milestone Farms, Inc. v. Office of the President,

CMU vs. DARAB

G.R. No. 100091

Facts:

Petitioner, the CMU, is an agricultural education institution owned and run by the state located in the town of Musuan, Bukidnon province. It started as a farm school at Marilang, Bukidnon, in early 1910, in response to the public demand for and agricultural school in Mindanao.

In 1960s it was converted into a college with campus in Musuan, and became known as the CMU. Primarily an agricultural university, the school was the answer to the need for training people in order to develop the agricultural potential of the island of Mindanao.

On January 16, 1958 the late president Carlos P. Garcia, issued Proclamation No. 476, withdrawing from sale or settlement and reserving for the Mindanao Agricultural College, a site which would be the future campus of what is now the CMU. A total land area comprising 3080 hectares was surveyed and registered and titled in the name of the petitioner.

In the early 1960s student population of the school was less than 3000. By 1988, the student population had expanded to some 13000 students. To cope with the increase in its enrollment, it has expanded and improved its educational facilities partly from government appropriation and partly by self-help measures.

In 1984, the CMU approved Resolution No. 160, a livelihood program called Kilusang Sariling Sikap Program under which the land resources of the University were leased to its faculty and employees. This arrangement was covered by a written contract. Under this program, the faculty and staff combine themselves to groups of five members each, and the CMU provided technical know-how, practical training and all kinds of assistance, to enable each group to cultivate 4-5 hectares of land for the lowland rice project. The contract prohibits participants and their hired workers to establish houses or live in the project area and to use the cultivated land as a collateral for any kind of loan. It was expressly stipulated that no landlord-tenant relationship existed between the CMU and the faculty and/or employees.Among the participants in this program were Alvin Obrique, Felix Guinanao, Joven Caballero, Nestor Pulao, Danilo Vasquez, Aronio Pelayo and other complainants. Obrique was a Physics Instructor at the CMU while the others were employees in the lowland rice project. The other complainants, who were not members of the faculty or non-academic staff of the CMU, were hired workers or laborers of the participants in this program.

When petitioner Dr. Leonardo Chua became President of the CMU in July 1986, he discontinued the agri-business project for the production of rice, corn and sugar cane known as Agri-Business Management and Training Project, due to losses incurred while carrying on the said project. Some CMU personnel, among whom were the complainants, were laid-off when this project was discontinued. As Assistant Director of this agri-business project, Obrique was found guilty of mishandling the CMU funds and was separated from service by virtue of Executive Order No. 17, the re-organization law of the CMU.

Sometime in 1986, under Dr. Chua as President, the CMU launched a self-help project called CMU-Income Enhancement Program (CMU-IEP) to develop unutilized land resources, mobilize and promote the spirit of self-reliance, provide socio-economic and technical training in actual field project implementation and augment the income of the faculty and the staff.

Under the terms of a 3-party Memorandum of Agreement2among the CMU, the CMU-Integrated Development Foundation (CMU-IDF) and groups of "seldas" of 5 CMU employees, the CMU would provide the use of 4 to 5 hectares of land to a selda for one (1) calendar year.The participants agreed not to allow their hired laborers or members of their family to establish any house or live within the vicinity of the project area and not to use the allocated lot as collateral for a loan. It was expressly provided that no tenant-landlord relationship would exist as a result of the Agreement.Initially, participation in the CMU-IEP was extended only to workers and staff members who were still employed with the CMU and was not made available to former workers or employees. In the middle of 1987, to cushion the impart of the discontinuance of the rice, corn and sugar cane project on the lives of its former workers, the CMU allowed them to participate in the CMU-IEP as special participants.

The one-year contracts expired on June 30, 1988. Some contracts were renewed. Those whose contracts were not renewed were served with notices to vacate.The non-renewal of the contracts, the discontinuance of the rice, corn and sugar can project, the loss of jobs due to termination or separation from the service and the alleged harassment by school authorities, all contributed to, and precipitated the filing of, the complaint.On the basis of the above facts, the DARAB found that the private respondents were not tenants and cannot therefore be beneficiaries under the CARP. At the same time, the DARAB ordered the segregation of 400 hectares of suitable, compact and contiguous portions of the CMU land and their inclusion in the CARP for distribution to qualified beneficiaries.Issue/s:

Whether or not the DARAB has jurisdiction to hear and decide Case No. 005 for Declaration of Status of Tenants and coverage of land under CARP.

Whether or not respondent Court of Appeals committed serious errors and GADALEJ in dismissing the Petition for Review on Certiorari and affirming the decision of DARAB

Held:

Petition is meritorious.

Ratio:

We agree with the DARAB's finding that Obrique, et. al. are not tenants. Under the terms of the written agreement signed by Obrique, et. al., pursuant to the livelihood program called "Kilusang Sariling Sikap Program", it was expressly stipulated that no landlord-tenant relationship existed between the CMU and the faculty and staff (participants in the project). The CMU did not receive any share from the harvest/fruits of the land tilled by the participants. What the CMU collected was a nominal service fee and land use participant's fee in consideration of all the kinds of assistance given to the participants by the CMU.

In the same paragraph of their complaint, complainants claim that they are landless peasants. This allegation requires proof and should not be accepted as factually true. Obrique is not a landless peasant. The facts showed he was Physics Instructor at CMU holding a very responsible position was separated from the service on account of certain irregularities he committed while Assistant Director of the Agri-Business Project of cultivating lowland rice. Others may, at the moment, own no land in Bukidnon but they may not necessarily be so destitute in their places of origin. No proof whatsoever appears in the record to show that they are landless peasants.

The evidence on record establish without doubt that the complainants were originally authorized or given permission to occupy certain areas of the CMU property for a definite purpose to carry out certain university projects as part of the CMU's program of activities pursuant to its avowed purpose of giving training and instruction in agricultural and other related technologies, using the land and other resources of the institution as a laboratory for these projects. Their entry into the land of the CMU was with the permission and written consent of the owner, the CMU, for a limited period and for a specific purpose. After the expiration of their privilege to occupy and cultivate the land of the CMU, their continued stay was unauthorized and their settlement on the CMU's land was without legal authority. A person entering upon lands of another, not claiming in good faith the right to do so by virtue of any title of his own, or by virtue of some agreement with the owner or with one whom he believes holds title to the land, is a squatter.Squatters cannot enter the land of another surreptitiously or by stealth, and under the umbrella of the CARP, claim rights to said property as landless peasants. Under Section 73 of R.A. 6657, persons guilty of committing prohibited acts of forcible entry or illegal detainer do not qualify as beneficiaries and may not avail themselves of the rights and benefits of agrarian reform. Any such person who knowingly and willfully violates the above provision of the Act shall be punished with imprisonment or fine at the discretion of the Court. Therefore, private respondents, not being tenants nor proven to be landless peasants, cannot qualify as beneficiaries under the CARP.

The questioned decision of the Adjudication Board, affirmedby the Court of Appeals, segregating 400 hectares from the CMU land is primarily based on the alleged fact that the land subject is "not directly, actually and exclusively used for school sites, because the same was leased to Philippine Packing Corporation (now Del Monte Philippines)".

In support of this view, the Board held that the "respondent University failed to show that it is using actually, really, truly and in fact, the questioned area to the exclusion of others, nor did it show that the same is directly used without any intervening agency or person", and "there is no definite and concrete showing that the use of said lands are essentially indispensable for educational purposes". The reliance by the respondents Board and Appellate Tribunal on the technical or literal definition from Moreno's Philippine Law Dictionary and Black's Law Dictionary, may give the ordinary reader a classroom meaning of the phrase "is actually directly and exclusively", but in so doing they missed the true meaning of Section 10, R.A. 6657, as to what lands are exempted or excluded from the coverage of the CARP.The construction given by the DARAB to Section 10 restricts the land area of the CMU to its present needs or to a land area presently, actively exploited and utilized by the university in carrying out its present educational program with its present student population and academic facility overlooking the very significant factor of growth of the university in the years to come. By the nature of the CMU, which is a school established to promote agriculture and industry, the need for a vast tract of agricultural land and for future programs of expansion is obvious. It was in this same spirit that President Garcia issued Proclamation No. 476, withdrawing from sale or settlement and reserving for the Mindanao Agricultural College (forerunner of the CMU) a land reservation of 3,080 hectares as its future campus. It was set up in Bukidnon, in the hinterlands of Mindanao, in order that it can have enough resources and wide-open spaces to grow as an agricultural educational institution, to develop and train future farmers of Mindanao and help attract settlers to that part of the country.

The first land use plan of the CARP was prepared in 1975 and since then it has undergone several revisions in line with changing economic conditions, national economic policies and financial limitations and availability of resources. The CMU, through Resolution No. 160 S. 1984, pursuant to its development plan, adopted a multi-disciplinary applied research extension and productivity program called the "Kilusang Sariling Sikap Project" (CMU-KSSP).

The portion of the CMU land leased to the Philippine Packing Corporation (now Del Monte Phils., Inc.) was leased long before the CARP was passed. The agreement with the Philippine Packing Corporation was not a lease but a Management and Development Agreement, a joint undertaking where use by the Philippine Packing Corporation of the land was part of the CMU research program, with the direct participation of faculty and students. Said contracts with the Philippine Packing Corporation and others of a similar nature were made prior to the enactment of R.A. 6657 and were directly connected to the purpose and objectives of the CMU as an educational institution. As soon as the objectives of the agreement for the joint use of the CMU land were achieved as of June 1988, the CMU adopted a blue print for the exclusive use and utilization of said areas to carry out its own research and agricultural experiments.

As to the determination of when and what lands arefound to be necessaryfor use by the CMU, the school is in the best position to resolve and answer the question and pass upon the problem of its needs in relation to its avowed objectives for which the land was given to it by the State. Neither the DARAB nor the Court of Appeals has the right to substitute its judgment or discretion on this matter, unless the evidentiary facts are so manifest as to show that the CMU has no real for the land.

It is our opinion that the 400 hectares ordered segregated by the DARAB and affirmed by the Court of Appeals in its Decision dated August 20, 1990, is not covered by the CARP becauase (1) It is not alienable and disposable land of the public domain; (2) The CMU land reservation is not in excess of specific limits as determined by Congress; (3) It is private land registered and titled in the name of its lawful owner, the CMU; (4) It is exempt from coverage under Section 10 of R.A. 6657 because the lands are actually, directly and exclusively used andfound to be necessaryfor school site and campus, including experimental farm stations for educational purposes, and for establishing seed and seedling research and pilot production centers.

Under Section 4 and Section 10 of R.A. 6657, it is crystal clear that the jurisdiction of the DARAB is limited only to matters involving the implementation of the CARP. It is restricted to agrarian cases and controversies involving lands falling within the coverage of the aforementioned program. It does not include those, which are actually, directly, and exclusively used and found to be necessary for, among such purposes, school sites and campuses for setting up experimental farm stations, research and pilot production centers.

Consequently, the DARAB has no power to try, hear and adjudicate the case pending before it involving a portion of the CMU's titled school site, as the portion of the CMU land reservation ordered segregated is actually, directly and exclusively used and found by the school to be necessary for its purposes. The CMU has constantly raised the issue of the DARAB's lack of jurisdiction and has questioned the respondent's authority to hear, try and adjudicate the case at bar. Despite the law and the evidence on record tending to establish that the fact that the DARAB had no jurisdiction, it made the adjudication now subject of review.

In this case, DARAB found that the complainants are not share tenants or lease holders of the CMU, yet it ordered the "segregation of a suitable compact and contiguous area of Four Hundred hectares, more or less", from the CMU land reservation, and directed the DAR Regional Director to implement its order of segregation. Having found that the complainants in this agrarian dispute for Declaration of Tenancy Status are not entitled to claim as beneficiaries of the CARP because they are not share tenants or leaseholders, its order for the segregation of 400 hectares of the CMU land was without legal authority.

We do not believe that the quasi-judicial function of the DARAB carries with it greater authority than ordinary courts to make an award beyond what was demanded by the complainants/petitioners, even in an agrarian dispute. Where the quasi-judicial body finds that the complainants/petitioners are not entitled to the rights they are demanding, it is an erroneous interpretation of authority for that quasi-judicial body to order private property to be awarded to future beneficiaries. The order segregation 400 hectares of the CMU land was issued on a finding that the complainants are not entitled as beneficiaries, and on an erroneous assumption that the CMU land which is excluded or exempted under the law is subject to the coverage of the CARP. Going beyond what was asked by the complainants who were not entitled to the relief prayed the complainants who were not entitled to the relief prayed for, constitutes a grave abuse of discretion because it implies such capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction.

The education of the youth and agrarian reform are admittedly among the highest priorities in the government socio-economic programs. In this case, neither need give way to the other. Certainly, there must still be vast tracts of agricultural land in Mindanao outside the CMU land reservation which can be made available to landless peasants, assuming the claimants here, or some of them, can qualify as CARP beneficiaries. To our mind, the taking of the CMU land which had been segregated for educational purposes for distribution to yet uncertain beneficiaries is a gross misinterpretation of the authority and jurisdiction granted by law to the DARAB.

It is the opinion of the Court that the evidence is sufficient to sustain a finding of grave abuse of discretion by respondents Court of Appeals and DAR Adjudication Board. Declaring the decision of the DARAB dated September 4, 1989 and the decision of the Court of Appeals dated August 20, 1990, affirming the decision of the quasi-judicial body, as null and void and ordered to be set aside.