Agrarian Reform Law and Jurisprudence (a Dar-undp Sardic Publication

AGRARIAN REFORM LAW AND JURISPRUDENCE (A DAR-UNDP SARDIC PUBLICATION AGRARIAN LAW AND JURISPRUDENCE PREFACE Thisbook has inauspicious beginnings. The original intent of the UNDP-SARDIC project, which eventually bore this book, was to map out special areas for policy reform in agrarian reform law. But as the project team delved deeper into the subject, the long unaddressed need for an organized and systematic presentation of agrarian law and existing jurisprudence was again put to fore. In response to that problem, the project team and the UNDPSARDIC project decided to widen the scope of the project and, thus, what came of it was not only a map of the difficult problem areas in the law's implementation but also this book. TcHCDI Any foray into the complicated, and often contentious, arena that is agrarian reform law necessitates a complete and well-grounded grasp of the basics. If anything, our study revealed that, even after decades, agrarian reform law remains vastly misunderstood and under-appreciated not only by stakeholders but by agrarian reform law implementors themselves. This is largely due to the dearth of materials on the matter. Over the years, laws and their implementing rules have been refined and promulgated to reflect the lessons learned and the changing times. Simultaneously, the Supreme Court issued rulings that elucidate and interpret the law, as well as repudiate portions thereof. The rights and obligations of the different stakeholders have been constantly redefined and readjusted. Despite these exciting developments, however, there has been little done to mesh all these pieces of knowledge into an organized whole. This book is an effort towards that end. In a nutshell, this book is a humble attempt in summing up years of agrarian reform law implementation. This book intends to reach out to all sectors and stakeholders to heighten their understanding and appreciation of the agrarian reform in the Philippines, and hopefully help refine the terms of the ongoing debates among them. This book hopes to appeal to both familiar and unfamiliar on the subject. It attempts to present, in an academic fashion, all relevant agrarian reform laws, DAR implementing rules, and pertinent judicial declarations on the matter. Hopefully, this will provide a holistic framework for understanding agrarian law. Extra effort was also exerted to demonstrate agrarian reform in action by giving concrete illustrations and discussion from an operational perspective. Interspersed with the theoretical discussions are the various operational — issues and difficulties that DAR implementors faced or are still facing. The authors would like to thank — This is but a first step. We derive inspiration from the words of T.S. Eliot: We shall not cease from exploration And the end of all our exploring • the UNDP-SARDIC project management team for providing the financial and logistic support to see this project through. • the members of DAR's management committee who shared with the project team their invaluable insights and experience in agrarian reform implementation. Their contribution in making this book complete and insightful is immeasurable. • the DAR-PPLAO support staff for providing administrative and secretariat support; and • Antonio Ramos who served as auditor for this project. Will be to arrive where we started And know the place for the first time [From " Little Gidding "] — THE AUTHORS CHAPTER 1 Coverage of the Comprehensive Agrarian Reform Program The Comprehensive Agrarian Reform Program The Comprehensive Agrarian Reform Program (CARP) is implemented by Republic Act No. 6657 (1988) otherwise known as the "Comprehensive Agrarian Reform Law". Prior to its enactment on 10 June 1988, President Corazon C. Aquino issued Proclamation No. 131 (1987) instituting a comprehensive agrarian reform program, and Executive Order No. 229 (1987) providing the mechanics for its implementation. RA 6657 took effect on 15 June 1988. While expressly repealing specific provisions of prior enactments on agrarian reform, RA 6657provides that the provisions of RA 3844 (1963), Presidential Decree No. 27 (1972) and PD 266(1973), EO 228 (1987) and EO 229 (1987) and other laws not inconsistent with it shall have suppletory effect. RA 6657 was enacted pursuant to the constitutional mandate enshrined in Section 4, Art. XIII of the 1987 Constitution, which provides: SEC. 4. The State shall, by law, undertake an agrarian reform program founded on the right of farmers and regular farmworkers, who are landless, to own directly or collectively the lands they till or, in the case of other farmworkers, to receive a just share of the fruits thereof. To this end, the State shall encourage and undertake the 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. 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 The constitutionality of RA 6657 has been upheld in Association of Small Landowners v. Secretary of Agrarian Reform, 175 SCRA 342 (1989) and companion cases. The Supreme Court held that the requirement of public use has already been settled by the Constitution itself. It noted that "[n]o less than the 1987 Charter calls for agrarian reform which is the reason why private agricultural lands are to be taken from their owners, subject to the prescribed retention limits." (at 378) While RA 6657 itself has been held constitutional, the Supreme Court in a subsequent case,Luz Farms v. Secretary of Agrarian Reform, 192 SCRA 51 (1990), declared unconstitutional Sec. 3 (b), 10 and 11 thereof in so far as they include lands devoted to the raising of livestock, swine and poultry within its coverage. As a result of this ruling, Congress enacted RA 7881(1995) amending these provisions and incorporating new provisions to existing ones. The amendments adopted the Luz doctrine by removing livestock, swine and poultry farms from CARP coverage. Scope of CARP The Constitution in Sec. 4, Art. XIII, mandates the just distribution of all agricultural lands, subject to such priorities and reasonable retention limits that the Congress may prescribe, taking into account ecological, developmental or equity considerations and subject to the payment of just compensation. Prior to RA 6657, the operative law on land distribution was PD 27 (1972). However, PD 27 is limited in scope, covering only tenanted private agricultural lands primarily devoted to rice and corn operating under a system of share-crop or lease tenancy, whether classified as landed estate or not. The constitutional provision therefore expanded the scope of agrarian reform to cover all agricultural lands. RA 6657 operationalized this constitutional mandate and provides in Sec. 4 thereof that the CARP shall cover, regardless of tenurial arrangement and commodity produced, all public and private agricultural lands, as provided in Proclamation No. 131 and EO 229 including other lands of the public domain suitable for agriculture. More specifically, the following lands are covered by CARP: a) c) b) All lands of the public domain in excess of the specific limits as determined by Congress in Sec. 4 (a) of RA 6657; d) All private lands devoted or suitable for agriculture regardless of the agricultural products raised or that can be raised thereon (Rep. Act No. 6657 [1988], Sec. 4). All other lands owned by the government devoted to or suitable for agriculture; and All alienable and disposable lands of the public domain devoted to or suitable for agriculture; Definition of agricultural land Sec. 3 (c) of RA 6657 defines agricultural lands as follows: Sec. 3 (b) of RA 6657, as amended by RA 7881 (1995), defines "agricultural activity" as follows: (c) Agricultural Land refers to land devoted to agricultural activity as defined in this Act and not classified as mineral, forest, residential, commercial or industrial land. (b) Agriculture, Agriculture Enterprise or Agricultural Activity means cultivation of soil, planting of crops, growing of fruit trees, including the harvesting of such farm products, and other farm activities and practices performed by a farmer in conjunction with such farming operations done by persons whether natural or juridical. Section 4 of RA 6657 provides that the CARL "shall cover, regardless of tenurial arrangement and commodity "land devoted to agricultural activity as defined in this Act and not classified as mineral, forest, residential, commercial and industrial lands" (at 282, 283). commercial or industrial land." The deliberations of the Constitutional Commission confirm this limitation. Agricultural lands reclassified by local governments into "forest conservation zones" In Natalia v. DAR, 225 SCRA 278 (1993), the Supreme Court held: produced, all public and private agricultural lands." As to what constitutes "agricultural land," it is referred to as "Agricultural lands" are only those lands which are "arable and suitable agricultural lands" and "do not include Agricultural lands reclassified by local government units (LGUs) into "forest conservation zones" even prior to the effectivity of CARL do not become forest land under Sec. 3 (c) of RA 6657 as to be exempted from CARP coverage. 7160 [1991]. the authority of the DAR to approve such conversion may be exercised from the date of its effectivity or on 15 June 1988. 6 [1994]). 6657 [1988]. However. primary classifications. 6. 3 (c) of RA and is therefore not covered by CARP. Art. an agricultural land is already a primary classification and. under the Constitution and Commonwealth Act No.It should be noted that under the Constitution. No. 3). O. Sec. Act No. commercial or industrial is lodged. On the other hand. 1 [1999]). . 141 [1936]. residential.. the provisions on land conversion under CARL and its implementing rules will apply (Rep. (HLURB) and its preceding competent authorities prior to 15 June 1988 for residential. commercial or industrial by the LGU and approved by the Housing and Land Use Regulatory Board (HLURB). 1 (1990) makes this qualification in its definition of "agricultural land. in cities and municipalities (Rep. 141 (1936). the authority to reclassify agricultural lands into residential. Act No. Secondly. . all lands already classified as commercial. This is based on Department of Justice Opinion No. the land will be recognized as so classified under Sec. commercial or industrial) is a mix of primary and secondary classifications. Sec. 6657 and not classified as mineral or forest by the Department of Environment and Natural Resources (DENR) and its predecessor agencies." The same provision of the Constitution also provides that agricultural lands of the public domain may be further classified according to the uses to which they may be devoted. commercial or industrial use. 3 (c) of RA 6657 as non-agricultural (i. mineral. hence. industrial or residential before that date no longer need any conversion clearance from the DAR. DAR Administrative Order No. Sec. commercial or industrial and not classified in town plans and zoning ordinances as approved by the Housing and Land Use Regulatory Board Taking into consideration the effectivity of the law. 44 (1990) which provides that with respect to the conversion of agricultural lands covered by RA 6657 to non-agricultural uses. lands of the public domain are classified into agricultural. forest or timber. Thus. The forest (or mineral) land referred to in Sec. Act No. prior to 15 June 1988. O. No. can only be subjected to secondary classification. XII. Agricultural lands reclassified LGUs into residential." as follows: . Reclassification by LGUs of agricultural lands into "forest conservation zones" does not have the effect of converting such lands into forest lands as to be exempted from CARP. 20). The group of lands referred to in Sec. EO 192 [1987]). If the agricultural land was classified as residential. . Forest and mineral lands are. mineral lands and national parks (CONST. Agricultural land refers to those devoted to agricultural activity as defined in R. the secondary classifications mentioned in Sec.. while the rest are secondary classifications. 65. These classifications are called primary classifications or "classification in the first instance. 3 (c) of RA 6657 are treated according whether they were classified as such before or after the effectivity of the law on 15 June 1988. (DAR Adm. sec. Firstly. forest.e. LGUs have no authority or power to make primary classifications considering that such power is the sole prerogative of the President exercising such power upon the recommendation of the DENR. among others. The responsibility over primary classification of lands of the public domain is vested in the President who exercises such power upon the recommendation of the Department of Environment and Natural Resources (DENR) (Com.A. DAR Adm. 3 (c) of RA 6657 is therefore to be understood as referring to forest (or mineral) land declared to be such by the President/DENR and not by the LGUs. This further classification of agricultural land is referred to as secondary classification. If an agricultural land is reclassified after 15 June 1988. an exemption clearance from DAR is still necessary to confirm or declare its exempt status. or its predecessor agencies. including experimental farm stations operated by public or private schools for educational purposes. 1637 (1979) as townsite area for the Lungsod Silangan Reservation. all public and private and agricultural lands" and as per the transcripts of the Constitutional Commission. industrial and residential lands. prior to 15 June 1988 are covered by CARP. SDHCac Natalia Realty. sec. directly and exclusively used for prawn farms and fishponds: Provided. covered by RA 6657? Exemptions and Exclusions Held: Sec. watersheds and mangroves (Rep. as follows: a) Lands actually. vs. church sites and convents appurtenant thereto. the developer of the area. Issue: Are lands already classified for residential. supra. Act No. 10 [b]). 10 of RA 6657. "agricultural lands" covered by agrarian reform refers only to those which are "arable and suitable lands" and "do not include commercial. directly or exclusively used for parks and wild-life. 7881 [1995]). government and private ." The land subject of the controversy has been set aside for the Lungsod Silangan Reservation by Proclamation No. 10 [a]. school sites and campuses.Conversion prior to 15 June 1988 through presidential proclamation binding before DAR The reasoning in DOJ Opinion No. as amended by Rep. 4 of RA 6657 states that the CARL covers "regardless of tenurial arrangement and commodity produced. The developer filed its objections and filed this case imputing grave abuse of discretion to respondent DAR for including the undeveloped portions of its landholding within the coverage of CARP. Act No.0078-ha land set aside by Presidential Proclamation No. reforestation. DAR is bound by such conversion. Inc. 44 (1990) was validated by the Supreme Court in Natalia v. directly and exclusively used and found to be necessary for national defense. as amended by RA 7881 (1995). and thus it was an error to include these within the coverage of CARL. This case involved the question of whether or not lands already classified for residential. mosque sites and Islamic centers appurtenant thereto. Department of Agrarian Reform 225 SCRA 278 (1993) Facts: Petitioner Natalia Realty. communal burial grounds and cemeteries. is the owner of a 125. penal colonies and penal farms actually worked by the inmates. commercial or industrial use. specifically enumerates the exemptions and exclusions from CARP. a Notice of Coverage was issued by DAR on the undeveloped portion of the landholding. 6657 [1988]. Inc. b) Private lands actually. commercial or industrial use. That said prawn farms and fishponds have not been distributed and Certificate of Land Ownership Award (CLOA) issued to agrarian reform beneficiaries (ARBs) under CARP (Sec. forest reserves. In November 1990. DAR. Estate Developers and Investors Corporation (EDIC). and approved by HLURB and its precursor agencies prior to 15 June 1988. as approved by HLURB and its precursor agencies. Sec. c) Lands actually. seeds and seedling research and pilot production center. Since the Natalia lands were converted prior to 15 June 1988. fish sanctuaries and breeding grounds. was granted preliminary approval and locational clearances by the then Human Settlements Regulatory Commission (HSRC) for the establishment of the Antipolo Hills Subdivision therein. 1637 prior to the effectivity of RA 6657 and in effect converted these lands into residential use. industrial and residential lands (Record. CONCOM. 30). 621).7815 hectares of infrastructure . The Supreme Court noted that the intention of the Committee to limit the application of the word "agriculture" is further shown by the proposal of Commissioner Jamir to insert the word "arable" to distinguish this kind of agricultural land from such lands as commercial and industrial lands and residential properties. including but not limited to crop lands. Likewise. poultry and livestock workers (Record. Secretary of the Department of Agrarian Reform 192 SCRA 51 (1990) research and quarantine centers and all lands with eighteen percent (18%) slope and over. Vol. was not considered because the Committee contemplated that agricultural lands are limited to arable and suitable agricultural lands and therefore. as follows: cattle. livestock. 3 (b) and Sec. III. The Committee adopted the definition of "agricultural land" as defined under Section 166 of RA 3844. II. swine and poultry. 3 (b) and Sec. 11 of RA 6657 are unconstitutional in so far as they include lands devoted to raising livestock. The Supreme Court held that: The transcripts of deliberations of the Constitutional Commission of 1986 on the meaning of the word "agricultural. 11 of RA 6657 in so far as they apply to livestock and poultry business. p. August 2. p. do not include commercial. Facts: Petitioner Luz Farms is a corporation engaged in livestock and poultry business. the original Sec. The use of land is incidental to but not the principal factor or consideration of productivity in this industry. 10 [c]). 21 heads for every 1. and (b) the farm must satisfy the ratios of land. 7 August 1986. carabao and horse raising maximum of 1 head to 1 hectare. The proposal. Held: Sec. directly. poultry and swine raising as of 15 June 1988. swine and poultry within its coverage. except those already developed (Sec. Sec. It seeks to nullify Sec. 11 of RA 6657 on commercial farming provided that "lands devoted to commercial livestock. fishponds. Commissioner Tadeo clarified that the term "farmworker" was used instead of "agricultural worker" in order to exclude therein piggery." clearly show that it was never the intention of the framers of the Constitution to include livestock and poultry industry in the coverage of the constitutionally-mandated agrarian reform program of the government. poultry and swine. CONCOM. The Luz Farms Case. supra. DAR AO 9 (1993) imposes two (2) conditions in order that these lands may be exempted: (a) that the land or portion thereof is exclusively. 3(b) of RA 6657 included in its definition of agricultural activity the "raising of livestock. idle and abandoned land (Record. as land devoted to any growth. in his answer to Commissioner Regalado's interpellation. 1986. saltbeds. the Supreme Court in Luz Farms vs. Luz Farms vs. 11). Vol. CONCOM. Moreover. or actually used for livestock. 13 and 32) are unconstitutional in far as they include the raising of livestock and swine in the coverage of CARP. p. August 7. 11 of RA 6657 (along with Sec. held that Sec.Lands devoted to raising of livestock. Vol. however. III. Before its amendment by RA 7881. 3 (b) and Sec. poultry or fish". 1986. poultry and swine raising shall be subject to compulsory acquisition within ten (10) years from the effectivity of the Act. Secretary of Agrarian Reform." However. 5%) of net profits before tax from the operation of the fishpond or prawn farms are distributed within sixty (60) days at the end of the fiscal year as compensation to regular and other pond workers over and above their current compensation. Under the terms of the program. 10 and 11 of RA 6657 by RA 7881. the date of effectivity of RA 7881. the Supreme Court passed upon the exemption of lands directly. the consent of the farm workers shall no longer be necessary (Rep.5126 hectare of infrastructure 500 layers for every 0.sheep and goat raising swine raising poultry raising Fishponds and prawn ponds With the amendment of Sec. In 1984. a piece of land to be used as its future campus. Central Mindanao University vs. President Carlos Garcia issued Proclamation No. O. In Central Mindanao University vs. by voluntary offer to sell. Operators and entities owning or operating fishponds and prawn farms are directed to execute within six (6) months from its effectivity an incentive plan with their regular fishpond or prawn farm worker's organization. does not apply to agricultural lands subsequently converted to fishponds or prawn farms provided that the size of the land converted does not exceed the retention limit of the landowner. In turn. including experimental farm stations operated by public or private schools for educational purposes provided for under Sec. Sec. provided that said lands have not been distributed to ARBs and no CLOAs have been issued. commercial farms deferment or notice of compulsory acquisition. DARAB. directly and exclusively used for prawn farms and fishponds as of 12 March 1995. as amended. the agricultural land must have been actually. training and other kinds of assistance. CMU embarked on a project titled "Kilusang Sariling Sikap" wherein parcels of land were leased to its faculty members and employees. 3 [1995]). 215 SCRA 85 (1992). Department of Agrarian Reform Adjudication Board 215 SCRA 86 (1992) Facts: On 16 January 1958. a landowner or his authorized representative still has to file a written application for land exemption/exclusion with the DAR Provincial Office (DAR Adm. as amended). if any.7205 hectare of infrastructure 21 heads of hogs for every 0. 10 of RA 6657. In cases where the fishponds or prawnponds have not been subjected to CARP. Act No. Lands used for academic or educational use.53 hectare of infrastructure or 1000 boilers for every 1. To avail of the exemption. 6657 [1988]. sec. fishponds and prawnponds are also exempted from the coverage of CARP. 3 (c). 147 heads for every 0. however. they can be exempt from CARP if a simple and absolute majority of the actual regular workers or tenants consent to the exemption within one (1) year from the effectivity of RA 7881 or on 12 March 1995. This incentive plan requirement. 4 of RA 7881 also amended RA 6657 by introducing a new provision mandating the introduction of an incentive plan for employees of all fishponds and prawn farms. 7 heads to 1 hectare. 467 reserving for the Mindanao Agricultural College. they paid the CMU a . now the CMU. No. whereby seven point five percent (7.428 hectares of infrastructure To be exempted. CMU will assist faculty members and employee groups through the extension of technical know-how. actually and exclusively used and found to be necessary for school sites and campuses. In cases were the fishponds or prawn farms have been subjected to CARP. The CMU case. 10[b]. the segregation of 400 hectares of the land for distribution under CARP. Said EO provides that: Held: The land is exempted from CARP. shall be segregated from the reservation and transferred to the Department of Agrarian Reform for distribution to qualified beneficiaries under the Comprehensive Agrarian Reform Program. directly and exclusively used and necessary for the purpose for which they are reserved? The CMU case is unique as it involves land transferred by the state to CMU through PD 467which provided for its commitment to a specific use and purpose. Sec." The Court stated that the DARAB decision stating that for the land to be exempt it must be "presently. 10 of RA 6657. the Supreme Court seems to have overlooked EO 407 (1990). which provides that DAR is vested with the power to determine whether lands reserved for public uses by presidential proclamation is no longer actually. CMU is in the best position to resolve and answer the question of when and what lands are found necessary for its use. It is submitted that a more accurate basis for the exemption should have been that the exclusive use of the land — both present and future — has been determined by law. A literal interpretation of the provision implies that the exemption applies only to those lands already committed for the enumerated purposes at the date of the effectivity of law on 15 June 1988. directly. a case was filed by the participants of the "Kilusang Sariling Sikap" for declaration of status as tenants under the CARP. directly and exclusively used for educational or research purposes at the time of the effectivity of the RA 6657 to be exempt from CARP also fails to consider Sec. including government-owned or controlled corporations suitable for agriculture and no longer actually. actively exploited and utilized by the university in carrying out its present educational program with its present student population and academic faculty" overlooked the very significant factor of growth of the university in the years to come. it is not "actually. or . the said land was already set aside for a specific purpose and. The agreement explicitly provided that there will be no tenancy relationship between the lessees and the CMU. DAR in coordination with the agency or department involved. can determine whether the purpose or use for which the lands reserved continues to exist and therefore establish if they continue to be exempt from CARP coverage. DARAB.service fee for use of the land. 1-A. In ruling that the CMU is in the best position to determine the use of the land and not DAR. Thus. and exclusively" used and found necessary for the uses enumerated therein are exempt from CARP coverage. as amended by EO 448 (1991). The Supreme Court's statement that lands of universities and academic institutions need not be actually. as determined by the Department of Agrarian Reform in coordination with the government agency or instrumentality concerned in whose favor the reservation was established. was taken outside the coverage of agrarian reform by law. in effect. All lands or portions thereof reserved by virtue of Presidential proclamations for specific public uses by the government. The Court also chided the DARAB for resolving this issue of exemption on the basis of "CMU's present needs. The land was subjected to coverage on the basis of DAR's determination that the lands do not meet the condition for exemption. SHECcT Thus. that is. and exclusively used" for educational purposes. or research purposes after 15 June 1988. Thus. Issue: Is the CMU land covered by CARP? Who determines whether lands reserved for public use by presidential proclamation is no longer actually. 10 is explicit that only those lands that are "actually. educational. agricultural land acquired by academic institutions for academic. and not because of the determination of the CMU of what it needs and how it intends to use it. among others. directly and exclusively used or necessary for the purposes for which they have been reserved. ordered. In its resolution. its agencies and instrumentalities. directly and exclusively used and necessary for the purpose for which they are reserved. When the program was terminated. Sec. directly. For its exclusion from acquisition and distribution. The first view is that lands exempted or excluded from the law are permanently taken out from coverage of the CARP. and Effects of exemption a) If land is classified as forest land. c) If private agricultural land. No. 13 [1990]. The second view is that excluded and exempted lands can be covered by CARP when the reason for their exemption ceases to exist. the same shall be allocated to the qualified applicants in the following manner: b) If classified as alienable and disposable. the institution may file before DAR for clearance to convert these lands into non-agricultural use." which provides that lands with a slope of 18% or over are generally reserved as forest lands. to form part of the forest reserves. Sec. 15 thereof states that "no land of the public domain eighteen per cent (18%) in slope or over shall be classified as alienable and disposable" and that "lands eighteen per cent (18%) in slope or over which have already been declared as alienable and disposable shall be reverted to the classification of forest lands by the Department Head. 10. adversely and publicly for a period of not less than thirty (30) years as of the effectivity of this Code. 10 of RA 6657 provides that exempted or excluded lands are removed from the coverage of CARP. This rule on exemption is based on PD 705 (1975). and therefore is inalienable and indisposable. but are exempt or excluded from CARP by reason of their actual use and their necessity for other purposes. actually. they are in fact suitable to agriculture and not classified as mineral." The legal effect of this interpretation is that the owner can use and dispose the land as he deems fit without the need for any clearance from DAR. residential. 10 of RA 6657 and theLuz Farms ruling are considered agricultural lands as defined by Sec. in the event that these lands cease to be used or necessary for the purposes for which they are exempted. If the land has 18% slope or over and is agriculturally developed as of 15 June 1988. 10 which states that exempted lands are "exempt from the coverage of the law. this shall be allocated by the Land Management BureauDENR and DAR pursuant to the provisions of CA 141 and the Joint DAR-DENR AO 2 (1988). they are removed from the exemption and are treated like any other agricultural land. O. item E. However. this shall be allocated by the DENR under its Integrated Social Forestry Program. continuously. unless they are already covered by existing titles or approved public land application. or actually occupied openly. and directly to the abovementioned uses before or on such date. part II). 3 (c) of RA 6657. forest. there are two (2) contending views on whether these exempted or excluded lands are perpetually taken out from coverage of the CARP. as amended by RA 7881 (except lands with 18% slope). Thus. The basis of this interpretation is the phraseology of Sec. when the reason for exemption ceases to exist for lands exempt under the Luz Farms ruling or Sec. commercial or industrial lands. Lands with 18% slope Lands with 18% slope or over are exempt from CARP coverage unless these are found to be agriculturally developed as of 15 June 1988.those owned by them but not committed exclusively. Thus. or the "Revised Forestry Code of the Philippines. where the occupant is qualified for a free patent under the Public Land Act. that is. Sec. It must be remembered that the lands subject of exemption under Sec. . this shall be acquired in accordance with the provisions of RA 6657 (DAR Adm. 10 and are then subject to CARP coverage. are covered by CARP. and for its commitment to said purposes. they are removed from the application of Sec. whenever applicable in accordance with law. Court of Appeals 170 SCRA 706 (1989) Facts: Subject matter of the case consists of two (2) parcels of land acquired by respondents' predecessors-ininterest through homestead patent under the provisions of CA 141. In Patricio v. 6 of RA 6657 contains a proviso supporting the inapplicability of PD 27 to lands covered by . relying on the provisions of PD 27 and PD 316 and appurtenant regulations issued by the then Ministry of Agrarian Reform. O. the same cannot be invoked to defeat the very purpose of the enactment of the 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. as RA 6657 is a social welfare legislation the rules of exemptions and exclusions must be interpreted restrictively and any doubts as to the applicability of the law should be resolved in favor of inclusion. While PD 27 decreed the emancipation of tenants from the bondage of the soil and transferring to them Public Land Act or CA 141. part II). 112 SCRA 45. Bayog.The second view is anchored on the spirit and intent of the law to cover all agricultural lands suitable to agriculture. Sec. they are granted preference in the award of other lands covered by CARP (DAR Adm. The law gives a ownership of the land they till. No. it was held that: The Homestead Act has been enacted for the welfare and protection of the poor. Issue: Are lands obtained through homestead patent covered under PD 27? Held: No. and the rights of indigenous communities to their ancestral lands. the Supreme Court stated that homesteads are exempt from agrarian reform. 13 [1990]. CA. In either case. Homesteads In Alita vs. Moreover. In addition. 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. Moreover. the exemption of the land shall not cause the loss of the benefits to which they are entitled under other laws. reading: homestead rights of small settlers. They have a welfare of the people's happiness is under a duty to safeguard the satisfaction of this vital right. homestead patents like those of the property in question. right to live with a certain degree of comfort as become human beings. and the State which looks after the The State shall apply the principles of agrarian reform or stewardship. but the petitioners refused to vacate. Respondents wanted to personally cultivate these lands. subject to prior rights. Sec. 6 of Article XIII of the 1987 Constitution provides: Section 6. As to farmworkers. Alita vs. including lands of public domain under lease or concession suitable to agriculture. the security of tenure of tenants enjoyed prior to 15 June 1988 shall be respected even when the lands are exempted. in the disposition or utilization of other natural resources. In this regard. all idle or abandoned lands. 27. • and all private agricultural lands in excess of fifty (50) hectares. all lands acquired by the Presidential Commission on Good Government (PCGG). Schedule of Implementation Sec. Section 6. all lands foreclosed by the government financial institutions. . . • Landholdings above twenty-four (24) hectares up to fifty hectares. However. b) The original homestead grantee or his or her compulsory heirs cultivate the land as of 15 June 1988 and continue to cultivate the same. 7 of RA 6657 lays out the schedule of acquisition and distribution of all agricultural lands through a period of ten (10) years from the effectivity of the Act: Phase I Lands Covered Schedule • Rice and corn lands under Presidential 1988-1992 Decree No. 6 of RA 6657 provides that homesteaders are allowed to retain the total homestead lot subject to the conditions provided in the same section and as setDAR MC 4 (1991). • all arable public agricultural lands under agroforest. That original homestead grantees or their It also provides that the tenants of lands covered by homestead patents exempted from PD 27or retained under RA 6657 shall not be ejected therefrom but shall remain as leaseholders therein. xxx xxx xxx While homestead lots are declared exempt under PD 27. pasture and agricultural leases already cultivated and planted to crops in accordance. Sec.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. to wit: a) That the original homestead grantee or his/her direct compulsory heirs still own the land on 15 June 1988. all private lands voluntarily offered by the owners for agrarian reform. Provided further. they are not expressly declared as such under RA 6657. and all other lands owned by the government devoted to or suitable for agriculture • • • • • II • III-A III-B All alienable and disposable public agricultural 1992-1995 lands. . Retention Limits. and 1998-1992 • Private agricultural lands with areas above the 1994-1998 . • all public agricultural lands which are to be opened for new development and resettlement. provided that prior to such event. Aquino issued EO 407 (1990) directing all government instrumentalities. proposed national parks. However land that has become permanently or regularly devoted to non-agricultural purposes is not to be considered as idle or abandoned. wild-life reserves. all landholdings suitable for agriculture. 3 of EO 407(1990) likewise provides for the redistribution and award of fishponds. pasturelands and other lands of public domain suitable for agriculture subject of cancelled or amended lease agreement to the agrarian reform beneficiaries. Sec. 7 of RA 6657 provides a fixed time table for the implementation of the CARP law. directly and exclusively used or necessary for the purposes for which they have been reserved. such land was previously used for agricultural or other economic purpose. In view of the passing of the ten (10)-year period in 1998. These also excluded national parks and other protected areas. Deferred commercial farms shall be subject to immediate compulsory acquisition and distribution after ten (10) years from the effectivity of RA . wilderness areas and other protected areas. It is merely a guide to DAR in setting its priorities. government agencies. 9 (1997). Hence. 5 of RA 6657 is more procedural in nature than substantive. the provision as to time will be regarded as directory only notwithstanding the mandatory nature of the language used. this provision should be interpreted as merely directory. DAR need not wait for the full coverage of those lands in the first phase before those in the succeeding phases could be covered.000 meters elevation or above 50 percent slope until such time that they are segregated for agricultural purposes or retained under the National Integrated Protected Areas System. a limitation of its authority. its agencies and instrumentalities. 18 (h) of EO 229 prioritizes the immediate expropriation or acquisition of idle or abandoned lands. DAR may also proceed with the coverage of lands in different phases simultaneously. XVIII of the 1987 Constitution and Sec. tilled or developed to produce any crop nor devoted to any specific economic purpose continuously for a period of three (3) years immediately prior to the receipt of notice of acquisition by the government as provided under RA 6657. and it is not. This is the gist of DOJ Opinion No. Congress passed RA 8532 (1998) providing for the funding for land acquisitions for another ten (10) years. Sec.Thus. through the DAR. by any means. The ten (10)-year period is merely a time frame given to DAR for the acquisition and distribution of public and private agricultural lands covered by RA 6657. bird sanctuaries. government owned and controlled corporations or financial institutions to transfer to the Republic of the Philippines. retention limit up to 24 hectares Sec. Commercial farms Sec. 22 of Art. rather than mandatory in character." Lands owned by government To expedite the disposition of lands owned by the government. 11 of RA 6657 allowed the deferment of the coverage of commercial farms. including old growth or virgin forests and all forests above 1. Where a provision embodies a rule of procedure rather than one of substance. Sec. and no longer actually. game refuge. It has been held that the difference between a mandatory and a directory provision is often determined on grounds of expediency. President Corazon C. Idle or abandoned lands Though Sec. the lapse of which bars the DAR from covering the land under CARP. Sec 3 (e) of RA 6657 defines idle or abandoned land as "any agricultural land not cultivated. 5 of RA 6657 should not be construed as a prescriptive period. EO 448 (1991) and EO 506 (1992) amended EO 407 by including all lands or portions thereof reserved by virtue of presidential proclamations for specific public uses by the government. Neither can it be considered as abandoned or idle any land which has become unproductive by reason of force majeure or any other fortuitous event. 5 [2000]. paraphernal and conjugal) shall be considered to be held in absolute community. No. their maximum retention limit is determined by the nature of their property relations. infrastructure. sec. but in no case shall exceed five (5) hectares. No. 6 of RA 6657operationalizes this mandate and observes the right of persons to own. With respect to married couples.6657 on 15 June 1988. a husband owning capital property and/or a wife owning paraphernal property may retain not more than five (5) hectares each provided they executed a judicial separation of properties prior to entering into the marriage. directly or indirectly public or private agricultural land. the size of which shall vary according to factors governing a viable family-size farm in such as commodity produced terrain. however. Sec. DAR AO 16 (1988)provided a 60-day period for the filing of applications of deferment which lapsed on 2 May 1989. 9 [h]). Thus. and thereby make productive the area he retains. donation) as the law does not distinguish. The retention limits under Sec. it must have been planted to commercial crop or devoted to commercial farming operations before 15 June 1988. He is also prohibited from making any constructions therein or commit it to purposes incompatible with its agricultural nature. award. the DAR shall initiate steps to acquire the lands. The acquisition and distribution of these deferred commercial farms are governed by DAR AO 9 (1998). Juridical persons like corporations and partnerships are therefore subject to the five (5)-hectare limit. succession.e. Retention Sec. 5 [2000]. 1 [1999]). Final land transfer to the beneficiaries shall be effected at the end of the deferment period. For marriages covered by the Family Code. three (3) hectares may be awarded to each subject to the following qualifications: a) that he is at least fifteen (15) years old as of 15 June 1988. in the absence of an agreement for the judicial separation of property. (DAR Adm. However. 9 [g]). For a commercial farm to be qualified for deferment. (DAR Adm. O. During the deferment period. Landowners have the obligation to cultivate directly or through labor administration. if either or both of them are landowners in their own respective rights (capital and/or paraphernal). O. In the absence of such an agreement. XIII of the 1987 Constitution subjects the distribution of agricultural lands for agrarian reform to "reasonable retention limits as Congress may prescribe. which took effect on 3 August 1988. all properties (capital. otherwise he can be held liable for premature conversion (see DAR Adm. only a total of five (5) hectares may be retained. and. therefore. 4. and soil fertility. by purchase. 6 of RA 6657 and subsequently acquires a five (5)-hectare landholding of his parent by succession can retain only five (5) hectares of the total landholding. i. sec. spouses who own only conjugal properties may retain a total of not more than five (5) hectares of such properties. Award to children If a landowner has children. In no case. 6 of RA 6657 covers all persons whether natural or juridical..e. O. For new farms. For marriages covered by the New Civil Code. shall the total retention of such couple exceed ten (10) hectares. and .. Art. DAR AO 16 (1988) explicitly allows the DAR to automatically subject the lands to redistribution when it determines that the purpose for which deferment is granted no longer exists as when the particular farm areas ceases to be commercially productive. he must first secure a conversion order from DAR. a child who was awarded three (3) hectares as a preferred beneficiary under Sec. Before a landowner can commit the retained land to nonagricultural purposes. No. they may retain not more than five (5) hectares of their respective landholdings. or retain. the ten (10)-year deferment will begin from the first year of commercial production and operation. the ownership relation is one. The five (5)-hectare retention limit applies to all lands regardless of how acquired (i. Exercise of right of retention Heirs of a deceased landowner who manifested. complied with the requirements under Letter of Instruction (LOI) Nos. Moreover. In the Association cases. he is subject to the same liabilities. No. 5 [2000]. the award is not automatic. Act No. it requires that the area be compact and contiguous. 6 of RA 6657 acknowledges the right of the landowners to choose the area to be retained. the intention to exercise the right of While Sec. supra) (DAR Adm. responsibilities and limitations imposed on all agrarian reform beneficiaries. Failure to exercise this right within the prescribed period means that the landowner waives his right to choose which area to . 45 or 52. 6 of RA 6657and retain only five (5) hectares. No. prior to the promulgation ofRA 6657. Thus. 45 or 52. 45 or 52. 6). the landowner shall exercise his right of retention within sixty (60) days from receipt of the Notice of Coverage from DAR. the Supreme Court held that landowners who failed to exercise their rights to retain under PD 27 can avail of their rights of retention under Sec. Thus. shall be allowed to enjoy the seven (7) hectare retention limit. and shall be least prejudicial to the entire landholding and the majority of the farmers therein (DAR Adm. All those who refused to comply with the requirements cannot. 41. aptitude and ability to cultivate and make the land as productive as possible. a) c) Those landowners who complied with the requirement of either LOI 41. The child is merely given a preference over other beneficiaries. 45 and 52regarding the registration of the landholdings. demand that their retention limit be determined under PD 27. and d) Those who filed their applications before the deadline set (27 August 1985 as provided by AO. 1 [1985]) Those who filed their applications after the deadline but complied with the requirements of LOI retention prior to 23 August 1990 (the finality of the Supreme Court decision in Association of Small Landowners vs. in the resolution of the Supreme Court on the motion for consideration in the said case. a resident of the barangay or municipality where the land is located. 4 [1991]). but also all the other qualifications of a beneficiary enumerated under Sec. and to those entitled to retain seven (7) hectares under PD 27. in view of the passage of CARL. 41. Thus. 4 of DAR AO 5 (2000) provides that under the Compulsory Acquisition (CA) scheme. As the right of the child is derived from his being a beneficiary. and must have the willingness. 22 of RA 6657. The award to the child is not to be taken from the retained land of the landowner and is awarded to the child in his own right as a beneficiary. the following OLT owners are still entitled to retain seven (7) hectares even if they exercised their right of retention under PD 27 after 15 June 1988: b) whether or not they have complied with LOI Nos. 6 of RA 6657. O. Secretary of DAR. the Court qualified that those who. Exceptions to the 5-hectare retention limit The five (5)-hectare retention limit under RA 6657 does not apply to original homestead grantees or their direct compulsory heirs at the time of the approval of RA 6657 who continue to cultivate the same. he must also be landless. Sec. sec 2 [b]). he must not only meet the requirements of preference laid out in Sec. DHcESI b) that he is actually tilling the land or directly managing it (Rep. 6657 [1988]. O. However. while still alive.DAR MC 4 (1994) defined the term "directly managing" as the cultivation of the land through personal supervision under the system of labor administration. sec. Hon. 41. No. the right of retention shall be exercised at the time the land is offered for sale. No. Emancipation Patents (EPs) or Certificates of Land Ownership Award (CLOAs) have already been issued on the land chosen by the landowner as retention area. otherwise. and the Deed of Assignment. d) Offering the subject landholding under VOS scheme and failure to indicate his retained area. or from the time the MARO has chosen the area to be retained by the landowner. O. sec. b) Signing of the Landowner-Tenant Production Agreement and Farmer's Undertaking (LTPA-FU) or Application to Purchase and Farmer's Undertaking (APFU) covering subject property. . or b) Be a beneficiary in the same or another agricultural land with similar or comparable features. 4). 7 of DAR AO 5 (2000) provides that the following acts constitute waiver on the landowner's right of retention: a) Executing an affidavit. the Municipal Agrarian Reform Officer (MARO) shall designate the retained area for the landowner. warranties and undertaking executed in favor of the LBP. he shall be considered a lease holder and shall lose his right to be a beneficiary. The offer should specify and segregate the portion covered by VOS and the portion applied for retention. O. the tenant refuses the same. 5 [2000]. Provincial Agrarian Reform Officer (PARO) or Regional Director (RD) indicating that he is expressly waiving his retention right over subject landholding. In case the area selected by the landowner or awarded for retention by the DAR is tenanted. No. If he chooses to remain in the area retained. Where Certificates of Land Transfer (CLTs). 5 [2000]. Thereafter. e) Signing/submission of other documents indicating consent to have the entire property covered. O. 5 [2000]. letter or any other document duly attested by the MARO. 5 [2000]. Under the Voluntary Offer to Sell (VOS) scheme. No. he may choose to be paid disturbance compensation by the landowner. be given priority in the distribution of other lands of the landowner or other lands identified by the DAR for redistribution. or if there is. As a matter of policy. sec. the DAR shall immediately inform the agrarian reform beneficiaries (ARBs) concerned and provide them the opportunity to contest the landowner's claim. should they so desire. 2 [c]). 11) Waiver of right of retention Sec. sec. O. the tenant has two (2) options: The tenant must exercise either option within one (1) year after the landowner manifests his choice of the area for retention. a) To remain as a lessee. the landowner shall be deemed to have waived his right of retention over the subject property (DAR Adm. subject to the rights of those already in the area (DAR Adm. 10). c) Entering into a Voluntary Land Transfer/Direct Payment Scheme (VLT-DPS) agreement as evidenced by a Deed of Transfer over the subject property. such as the form letter of the LBP on the disposition of the cash and bond portions of a land transfer claim for payment. sec. or from the time an order is issued granting the retention (DAR Adm. all rights acquired by the tenant-farmers under PD 27 and the security of tenure of the farmers or farmworkers on the land prior to the approval of RA 6657 shall be respected (DAR Adm. the DAR shall ensure that the affected ARBs. 10 of DAR AO 5 (2000) further provides that in case the tenant declines to enter into leasehold and there is no available land to transfer. Sec. Moreover.retain. sale or any other form of concession or disposition and management of the lands of the public domain. All lands of the public domain are under the exclusive jurisdiction of the DENR except those placed by law and/or by executive issuances under the jurisdiction of other government agencies. In response to a query by DAR. CA 141 (1936). (b) residential. lease. among others. Sec. commercial. the disposition of non-registrable lands of the public domain is the exclusive responsibility of the DENR under its various programs (i.f) Public Lands g) Doing such act or acts as would amount to a valid waiver in accordance with applicable laws and jurisprudence. the role of the DAR is to assist the DENR in identifying and screening of farmer beneficiaries. it has been held that there should be no distinction in the application of the law where non is indicated therein (SSS vs. survey. 115 SCRA 412) . instructions. classification. whether titled or untitled. Thus. 4 [b]) shall be covered by CARP. or other similar purposes. . governs the administration and disposition of lands of the public domain. the two agencies issued Joint DAR-DENR MC 9 (1995)which recognizes that lands of the public domain are under the jurisdiction of the DENR unless placed by law and/or by executive issuances under the jurisdiction of other government departments or entities.. It is empowered to prepare and issue such forms. It provides. with the recommendation of the Secretary of DENR. 6 of CA 141 (see also EO 192 [1987]) reserves the power to classify lands in the public domain into either agricultural (disposable). the Secretary of Agriculture and Natural Resources (now the Secretary of DENR) is the executive officer charged with carrying out the provisions of the Public Land Act. 9 thereof classifies alienable or disposable lands of the public domain as (a) agricultural. . rules and regulations consistent with the Public Land Act. These lands are either (a) disposable (alienable) public lands or (b) non-disposable public lands. the Department of Justice issued Opinion No. 3 and 5 of CA 141. 176 (1992) which stated: . otherwise known as the "Public Land Act". timber or mineral lands to the President.e. industrial or for similar productive purposes. (c) educational. public and private agricultural lands and lands of the public domain suitable for agriculture are covered by CARP. Sec. City of Bacolod. Non-disposable public lands or those not susceptible of private appropriation and include the following: (a) timber lands which are governed by PD 705 (1975) or the Revised Forestry Code. . and Public lands pertain to all lands that were not acquired by private persons or corporations either by grant or purchase. . . . RA 6657 has created an overlapping of jurisdictions between the DENR and the DAR over the disposition of these lands. The responsibility and authority of DAR to distribute public lands shall be limited to the following: . In this instance. RA 6657 mandates DAR to acquire and distribute these public lands to agrarian beneficiaries while CA 141 vests upon the DENR the power to control. . and (b) mineral lands which are governed by RA 7942 (1995) or the Philippine Mining Act of 1995 and other related laws. Under the said circular. Under Sec. 4 of RA 6657. the term "private agricultural lands" in the aforementioned section should be interpreted as including all private lands. or (d) reservations for town sites and for public and quasi-public uses. the Integrated Social Forestry). By said rule. It has also been determined that public agricultural lands that are untitled and privately claimed are covered by CARP. Under Sec. charitable. that all alienable and disposable lands of the public domain devoted or suitable or devoted to agriculture (Sec 4 [a]) and all lands of the public domain in excess of the specific limits of the public domain as determined by Congress (Sec. To resolve the overlapping mandates of the DENR and DAR in the disposition and distribution of public lands for CARP purposes. Performing acts which constitute estoppel by laches. It directs all Regional Executive Directors to strictly exercise DENR's jurisdiction over all alienable and disposable lands of the public domain. DENR MC 22 (1999) poses another roadblock which if not corrected or legally challenged in court can derail the already delayed coverage of public agricultural lands. b) The land must have been classified as alienable and disposable for at least thirty (30) years prior to the effectivity on 16 April 1990. and the public land claimant lacks the requisite thirty (30)-year possession. and thus. d) For these privately claimed public alienable and disposable lands.a) Lands proclaimed by the President as DAR Resettlement Projects and placed under the administration of the DAR for distribution to qualified farmer beneficiaries under CARP. As these claimants/tenants are mere occupants and can not be granted Free Patents by the DENR. and Untitled public alienable and disposable lands are still within the exclusive jurisdiction of DENR pursuant to CA 141. It is submitted. c) One must have paid the real estate tax thereon. If the alienable and disposable land is not tenanted but has actual farm occupants. however. and There are no adverse claims on the land. Sec. 176 (1992). TcCDIS For untitled public alienable and disposable lands which are tenanted and with claimants not qualified under the criteria specified in RA 6940. However. The role of the DAR in this case is limited to the documentation and protection of the leasehold arrangement between the public land claimant and the tenants. Joint DAR-DENR MC 14 (1997) provides that all untitled public alienable and disposable lands are deemed "private" if the criteria specified in RA 6940 for the determination of whether or not a person has already acquired a recognizable private right over a landholding is met. the DENR first issues a Free Patent to qualified applicants for the retained area of not more than five (5) hectares. The DAR shall then cover the excess area and issue a CLOA or EP and distribute these to qualified beneficiaries. these land should instead be committed for agrarian purposes. these shall be under the jurisdiction of the DENR and the appropriate tenurial instrument shall be applied. effectively removes remaining public alienable and disposable lands out of the scope of CARP. A recently issued DENR MC 22 (1999) entitled "DENR Jurisdiction over all Alienable ad Disposable Lands of the Public Domain. b) c) Lands previously proclaimed for the various government departments. the disposition shall be under the jurisdiction of the DENR. and prepare the same for disposition to qualified and legitimate recipients under the People's Alliance for the Rehabilitation of Environment of the Office of the Secretary of the DENR. 7 of RA 6657 explicitly provides that alienable and disposable public agricultural lands are among the . agencies and instrumentalities and subsequently turned over to the DAR pursuant to EO 407 (1990). that these alienable and disposable lands that are privately claimed by claimants who are not qualified under the criteria set under RA 6940 (1990) should be turned over to DAR for distribution under CARP. in accordance with DOJ Opinion No. namely: a) Continuous occupancy and cultivation by oneself or through one's predecessors-in-interest for at least thirty (30) years prior to the effectivity of RA 6940 on 16 April 1990. This recent issuance impliedly prohibits the turnover of alienable and disposable lands to CARP. Lands which are placed by law under the jurisdiction of DAR. While merely an administrative order that can not overturn legislation on the matter." seems to abrogate or set aside Joint DAR-DENR MC 14 (1997). including those lands not specifically placed under the jurisdiction of other government agencies. as amended by EO 448 and 506. by themselves or through their predecessors-ininterests. social and cultural well-being. but not limited to. Though these do not vest title. including. its definition of ancestral lands is circumscribed by the limitation that the Torrens System shall be respected. Definition of Terms. — . refers to lands occupied. to the present. subject to the provisions of the Constitution and the principles enunciated in RA 6657 and other national laws. and clans who are members of the ICCs/IPs (indigenous cultural communities/indigenous peoples) since time immemorial. possessed and utilized by individuals. social and cultural well being. deceit. RA 8371 (1997) has a more expansive definition of ancestral domains and ancestral lands which includes lands that are legally determined as indisposable and inalienable public lands. DAR issues member/s of the ICCs who are engaged in agricultural activities over the said lands CARP Beneficiary Certificate (CBC). while Sec.priority lands for distribution. Systems of land ownership. but not limited to." has a more encompassing definition. The Presidential Agrarian Reform Committee (PARC). b). rice terraces or paddies. 9 respects or protects the rights of the ICCs/IPs to their ancestral lands as means to protect their economic. It should be noted that the vested rights of these communities to ancestral lands have been recognized to have pre-existed the Regalian Doctrine which underlie the government's perspective to full ownership and control over natural resources as well as the current legal system that regulates private property rights. swidden farms and treelots. . CARP involves alienable and disposable lands only while ancestral lands of ICCs/IPs encompass forest and mineral lands and other lands of the public domain which are by definition inalienable and indisposable. It shall also respect laws on ancestral domain enacted by the respective legislators of autonomous regions. private forests. under claims of individual or traditional group ownership continuously. notwithstanding any law to the contrary. except when interrupted by war. residential lots. 9 of RA 6657 defines ancestral lands as those lands that include. has the power to suspend the implementation of the CARP with respect to ancestral lands for the purpose of identifying and delineating such lands. RA 8371 is a clear departure from earlier . . land use. force majeure or displacement by force. Needless to say. 3 (b) of RA 8371 (1997) or the "Indigenous Peoples Rights Act of 1997. it likewise recognizes the claim of the ICC over these lands and allows them to access support services from DAR. In any case. Sec. CARP ensures the protection of the right of ICCs/IPs to their ancestral lands to ensure their economic. to wit: Policy for ancestral lands under CARP Sec. the political implications of government's reluctance to commit public agricultural lands for agrarian ends in the face of its relentless expropriation of private landholdings is serious. families. stealth or as a consequence of government projects and other voluntary dealings entered into by government and private individuals/corporations. lands in actual. However. Thus. Ancestral Lands Sec. continuous and open possession of an indigenous cultural community and its members. 3. For one. to promote and protect the rights of the ICCs/IPs over ancestral lands situated in inalienable and indisposable public lands. the benefit of being awarded CLOAs over ancestral lands to these ICCs/IPs are limited to private agricultural lands and public agricultural lands transferred to DAR. This is a fundamental legal setback to the rights of ICCs/IPs. Ancestral Lands — Subject to Section 56 hereof. the full protection of the rights of the ICCs/IPs to their ancestral lands under CARP is hampered by various legal constraints. and modes of settling land disputes of the ICCs/IPs shall be recognized and respected in line with principles of self-determination and autonomy. . Gelos points to the specific tasks mentioned in the agreement and suggests that they are the work of a tenant and not of a mere hired laborer. but his protestations are less than convincing. Her claim that they were tricked into signing the agreement does not stand up against the testimony of Atty. CA." (RA 1199 [1954]. DHACES Issue: Held: executed a written contract which stipulated that as hired laborer Gelos would receive a daily wage of P5. The petitioner would disavow the agreement. is vested. whether in produce or in money. CHAPTER 2 Agricultural Leasehold Agricultural Tenancy Definition and nature of agricultural tenancy Agricultural tenancy is defined as "the physical possession by a person of land devoted to agriculture. sec. Gelos Gelos as tenant of the property and entitled to remain thereon as such. As this Court has stressed in a number of cases. Not so. the Supreme Court held that agricultural tenancy is not a purely factual relationship. "tenancy is not a . . What a tenant may do may also be done by a hired laborer working under the direction of the landowner. . National Commission on Indigenous Peoples (NCIP). Gelos vs. or both. Alzona filed a complaint for illegal detainer. . who even read it himself before signing it.000-sq. The written agreement of the parties is far more important as long it is complied with and not contrary to law. 208 SCRA 608 (1992). They refused and continued working on the land.law and regulation for not only does it expand the definition of ancestral lands but recognizes the right of the ICCs/IPs to own these lands. 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. It is not the nature of the work involved but the intention of the parties that determines the relationship between them. The work specified is not peculiar to tenancy. who declared under his oath as a witness (and as an attorney and officer of the court) that he explained the meaning of the document to Gelos. The agreement is a lease of services. 3) In Gelos vs. among others with the power and issue Certificates of Ancestral Domain/Land Titles over ancestral lands. Three (3) years later.00. not of the land in dispute. a body created by RA 8371. Gelos was informed of the termination of his services and was asked to vacate the property. m farmland. The lower court found Appeals. Court of Appeals 208 SCRA 608 (1992) Facts: Rafael Gelos was employed by Ernesto Alzona and his parents as their laborer on a 25. The decision was reversed by the Court of What is the nature of the contract between Gelos and Alzona? The parties entered into a contract of employment. as in the case at bar. not a tenancy agreement. His wife's testimony that he is illiterate is belied by his own testimony to the contrary in another proceeding. Santos Pampolina. . . the Supreme Court distinguished leasehold tenancy from civil law lease. sec. supra. 58 SCRA 590 (1974). belonging to or legally possessed by. 6). 4) except in the case of fishponds. Said law expressly repealed Sec. Act No. whereas the civil law lessee need not personally cultivate or work the thing leased. The subject matter of leasehold tenancy is limited to agricultural land. saltbeds. 5 [1993]). the law requires the leasehold tenant to personally attend to. and lands principally planted to citrus. durian and other similar permanent trees at the time of the approval of said Act (Rep. O. 35 of RA 3844. sec. When RA 6389 (1971) was enacted. coconuts. GERMAN. Leasehold relation is instituted in retained areas with tenant(s) under RA 6657 or PD 27 who opts to choose to remain therein instead of becoming a beneficiary in the same or another agricultural land with similar or comparable features. The intent of the parties. and cultivate the agricultural land. with either or both contributing any one or several of the items of production. As to purpose. Under RA 6657. SHARE AND LEASEHOLD TENANCY. another in consideration of a fixed amount in money or in produce or in both (Rep. 6657 [1988]. No. 3844 [1963]. Leasehold relation also exists in all tenanted agricultural lands that are not yet covered under CARP (DAR Adm. 4). share tenancy has been declared to be contrary to public policy and abolished (Rep. the . which was the condition before 1972 (M. Act No. the tenant cultivating the land personally with aid of labor available from members of his immediate farm household. Leasehold tenancy exists when a person who. that of civil law lease may be either rural or urban property. It was only under RA 6657 when the exemptions were expressly repealed. cacao. Sec. 6). the understanding when the farmer is installed." (Rep. 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. 4 of RA 3844. and as in this case. The institution of leasehold in these areas ensure the protection and improvement of the tenurial and economic status of tenant-tillers therein. Act No." Agricultural tenancy is classified into share tenancy and leasehold tenancy (M. The tenant must exercise his option within one (1) year from the time the landowner manifests his choice of the area for retention (Rep. and the produce thereof to be divided between the landholder and the tenant. coffee. through the exercise by the tenant of his right to elect leasehold. provided these are complied with and are not contrary to law. Act No. the only agricultural tenancy relation that is recognized is leasehold tenancy. Act No. 166 [25]).Classes of agricultural tenancy purely factual relationship dependent on what the alleged tenant does upon the land. 3844 [1963]. (Rep. Leasehold tenancy may be established by operation of law. 13 [1995]). With the passage of RA 3844. Pangilinan. whereas in civil law lease. through the abolition of share tenancy under Sec. 1199 [1954]. 6657 [1988]. sec.A. It is also a legal relationship. 3844 [1963]. As to attention and cultivation. Act No. 35). Leasehold tenancy distinguished from civil law lease In Gabriel vs. their written agreements. agricultural share tenancy has been automatically converted to leasehold but the exemptions remained. are even more important. German. at 27). A. that is. Share tenancy means "the relationship which exists whenever two persons agree on a joint undertaking for agricultural production wherein one party furnishes the land and the other his labor. There are important differences between a leasehold tenancy and a civil law lease. expressly or impliedly. sec. or by agreement of the parties either orally or in writing. sec. the landholding in leasehold tenancy is devoted to agriculture. making all tenanted agricultural lands throughout the country subject to leasehold. DAR. Pangilinan." .Elements of Agricultural Tenancy purpose may be for any other lawful pursuits. (Carag vs. the parties stipulated that "the property leased shall be used or utilized for agricultural enterprise only. c) There is consent by the landholder for the tenant to work on the land. CA. he is not entitled to security of tenure nor is he covered by the Land Reform Program of the Government under existing tenancy laws. Gabriel vs. 168 SCRA 254 [1988]) In the case of Teodoro vs. The landholding in dispute is unmistakably an agricultural land devoted to agricultural production. CA. Qua vs. . 27 SCRA 7 (1969). 280 SCRA 235 [1997]. 151 SCRA 44 [1987]. Macaraeg. the latter did not anymore renew his contract. Thereafter. On the other hand. The subject is agricultural land. The following are the essential requisites for the existence of a tenancy relation: a) b) The parties are the landholder and the tenant. CA. the Court found all the elements of an agricultural leasehold relation contained in the contract of lease executed by the parties. d) e) There is personal cultivation or with the help of the immediate farm household." (Caballes v. or a cultivator thereof. and The purpose is agricultural production. or a planter thereon. Oarde vs. . the parties also agreed that the farmland must be used for rice production as could be inferred from the stipulation that "the rental of nine (9) cavans of palay per hectare for one agricultural year . must be of the same variety (of palay) as that produced by the LESSEE. Teodoro denied that Macaraeg was his tenant and claimed that he had always leased all of his 39-hectare riceland under civil lease. 198 SCRA 236 [1991]) The Supreme Court emphasized in numerous cases that "(a)ll these requisites must concur in order to create a tenancy relationship between the parties. Held: The Contract of Lease between the parties contains the essential elements of a leasehold tenancy agreement. expressly or impliedly. He further claimed that after the expiration of his "Contract of Lease" with Macaraeg in 1961. Teodoro vs." Furthermore. given either orally or in writing. whereas leasehold tenancy is governed by special laws (at 596). f) There is compensation in terms of payment of a fixed amount in money and/or produce. Macaraeg 27 SCRA 7 (1969) Facts: Macaraeg had been the lessee of the property of Teodoro for the past seven (7) years when he was advised by the latter to vacate the property because it would be given to another tenant. The absence of one does not make an occupant of a parcel of land. As to the law that governs. a de jure tenant. a new tenant was installed who forbade Macaraeg from working on the riceland. the civil law lease is governed by the Civil Code. More specifically. 58 SCRA 590 [1974]. This is so because unless a person has established his status as a de jure tenant. The land is definitely susceptible of cultivation by a single person as it is of an area of only four and a half (41/2) ha. This court has held that even a bigger area may be cultivated personally by the tenant, singly or with the help of the members of his immediate farm household. From the stipulation that "the rental must be of the same variety as that produced by the LESSEE," it can reasonably be inferred that the intention of the parties was that Macaraeg personally work the land, which he did as found by the Agrarian Court, thus: "In the instant case,petitioner (Macaraeg) cultivated the landholding belonging to said respondent (Teodoro) for the agricultural year 1960-61 in consideration of a fixed annual rental." (italics supplied) Moreover, there is no evidence that Macaraeg did not personally cultivate the land in dispute. Neither did Teodoro allege, much less prove, that Macaraeg availed of outside assistance in the cultivation of the said riceland. Teodoro is the registered owner of the disputed landholding and he delivered the possession thereof to Macaraeg in consideration of a rental certain to be paid in produce. Evidently, there was a valid leasehold tenancy agreement. Moreover, the provision that the rental be accounted in terms of produce — 9 cavans per hectare — is an unmistakable earmark, considering the other stipulations, that the parties did actually enter into a leasehold tenancy relation (at 16-17;underscoring supplied). On the other hand, the indications of an employer-employee relationship are: 1) the selection and engagement of the employee; 2) the payment of wages; 3) the power of dismissal; and 4) the power to control the employee's conduct — although the latter is the most important element. Agricultural tenancy relation is different from farm employer-farm employee relation. The Court clarified the difference in the case of Gelos vs. CA, 208 SCRA 608 (1992), as follows: A tenant is "a person who by himself, or with the aid available from within his immediate 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 or for a price certain or ascertainable in produce or in money or both, under the leasehold tenancy system." (Rep. Act No. 1199 [1954], sec. 5 (a)). An overseer of a coconut plantation is not considered a tenant. Tenant defined. Parties: landholder and tenant According to a well-known authority on the subject, tenancy relationship is distinguished from farm employer-farm worker relationship in that: "In farm employer-farm worker relationship, the lease is one of labor with the agricultural laborer as the lessor of his services and the farm employer as the lessee thereof. In tenancy relationship, it is the landowner who is the lessor, and the tenant the lessee of agricultural land. The agricultural worker works for the farm employer and for his labor he receives a salary or wage regardless of whether the employer makes a profit. On the other hand, the tenant derives his income from the agricultural produce or harvest." (at 614) Zamoras vs. Su, Jr. 184 SCRA 248 (1990) Facts: Zamoras was hired by Su as overseer of his coconut land in Dapitan City. Zamoras was tasked to have the land titled in Su's name. He was also "assigning portions of the land to be worked by tenants, supervising the cleaning, planting, care and cultivation of the land, the harvesting of coconuts and selling of the copra." As compensation, he was paid salary of P2,400 per month plus 1/3 of the proceeds of the sales of the copra. Su got another 1/3 of the proceeds while the other third went to the tenants. In 1981, Su obtained a loan from Anita Hortellano and the latter was authorized by Su to harvest the coconuts. Meanwhile, he informed Zamoras that he was being temporarily laid-off until the loan is settled. Zamoras filed a case for illegal termination and breach of contract before the Regional Arbitration Branch of the Ministry of Labor. The Labor Arbiter held that Zamoras' dismissal was without just cause and ordered Zamoras reinstatement. On appeal, the National Labor Relation Commission reversed the Labor Arbiter by holding that there is no employee-employer relation existing between the parties but a landlord-tenant relation hence jurisdiction rests with the agrarian court. Zamoras assailed the decision of NLRC. Held: The NLRC's conclusion that a landlord-tenant relationship existed between Su and Zamoras is not supported by the evidence which shows that Zamoras was hired by Su not as a tenant but as overseer of his coconut plantation. As overseer, Zamoras hired the tenants and assigned their respective portions which they cultivated under Zamoras' supervision. The tenants dealt directly with Zamoras and received their one-third share of the copra produce from him. The evidence also shows that Zamoras, aside from doing administrative work for Su, regularly managed the sale of copra processed by the tenants. There is no evidence that Zamoras cultivated any portion of Su's land personally or with the aid of his immediate farm household. The following circumstances indicate an employer-employee relationship between them: 1. Zamoras was selected and hired by Su as overseer of the coconut plantation. 2. His duties were specified by Su. 3. Su controlled and supervised the performance of his duties. He determined to whom Zamoras should sell the copra produced from the plantation. 4. Su paid Zamoras a salary of P2,400 per month plus one-third of the copra sales every two months as compensation for managing the plantation." There is no tenancy relation because the element of personal cultivation does not exist. Castillo vs. CA 205 SCRA 529 (1992) Facts: Alberto Ignacio filed a complaint for injunction against Castillo alleging that he is the agricultural tenant of the latter. He claims that Castillo allowed him to construct a rest house in the property and that, thereafter, Castillo started cutting fruit-bearing trees on the land and filled with adobe stones the area intended for vegetables. On the other hand, Castillo denied that Ignacio was his tenant but that the latter was only a "magsisiga" of the landholding and that he did not ask permission from Ignacio when he constructed his rest house. The trial court found no tenancy relationship between the parties but this was reversed by the Court of Appeals. Held: The element of personal cultivation is absent in this case. The alleged tenant "is a businessman by occupation and this is his principal source of income. He manufactures hollow blocks. He also has a piggery and poultry farm as well as a hardware store on the land adjoining the subject land. To add to that, the respondent farms the riceland of one Dr. Luis Santos. It is thus evident that the working hours of the respondent as a businessman and his other activities do not permit him to undertake the work and obligations of a real tenant. This is further supported by the undisputed fact that the respondent cannot even personally perform the work of a smudger because on 22 October 1986, the respondent hired some 20 An owner tilling his own agricultural land is not a tenant within the contemplation of the law (Baranda vs. Baguio, 189 SCRA 194 (1990). In Oarde vs. CA, et al., 280 SCRA 235 (1997), certifications of tenancy/non-tenancy issued by DAR are not conclusive. people who are not members of his family to cut and burn the grass in the premises of the subject land." (at 535-536). Landholder-lessor "The certifications issued by administrative agencies or officers that a certain person is a tenant are merely provisional and not conclusive on courts, as ruled by this Court in Cuaño vs. Court of Appeals, citing Puertollano vs. IAC. Secondly, it is well-settled that the "findings of or certifications issued by the Secretary of Agrarian Reform, or his authorized representative, in a given locality concerning the presence or absence of a tenancy relationship between the contending parties is merely preliminary or provisional and is not binding upon the courts." (at 246) A landholder-lessor is defined as "any person, natural or juridical, either as owner, lessee, usufructuary or legal possessor of agricultural land, who lets, leases or rents to another said property for purposes of agricultural production and for a price certain or ascertainable either in an amount of money or produce." (Rep. Act No. 1199 [1954], sec. 42). Thus, consent need not be necessarily given personally by the registered owner as long as the person giving the consent is the lawful landholder as defined by law. Bernas vs. Court of Appeals 225 SCRA 119 (1993) Facts: Natividad Deita is the owner of a 5,831-sq m property which she entrusted to her brother, Benigno, so that he could use the fruits thereof to defray the cost of his children's education in Manila. The property was leased by Bernas pursuant to a production sharing arrangement executed between Bernas and Benigno. Natividad played no part in this arrangement. In 1985, the lots were returned by Benigno to his sister but when the owners sought to take possession, Bernas refused to relinquish the property. Bernas was claiming that he was an agricultural lessee entitled to security of tenure. Natividad filed an action for recovery of possession. The trial court ruled in favor of Bernas but this was subsequently reversed by the CA. Issue: Is consent by a legal possessor, even if without the consent of landowner, sufficient to create tenancy relationship? Subject is agricultural land Held: Yes. As legal possessor of the property, Benigno had the authority and capacity to enter into an agricultural leasehold relation with Bernas. "The law expressly grants him, as legal possessor, authority and capacity to institute an agricultural leasehold lessee on the property he legally possessed." (at 125-126) RA 6657 defines the term "agricultural land" as "land devoted to agricultural activity as defined in this Act and not classified as mineral, forest, residential, commercial or industrial land." (see discussion on scope of CARP, For agricultural tenancy to exist, the subject of the agreement must be an agricultural land. 0200-ha rice and corn land. The three (3) hectare limit under RA 6657 applies only to the award that may be given to the agrarian reform beneficiary. in 1965. fish ponds. As held in Tiongson v.000-sq m portion of the property and enjoined Baltazar from entering the same. IAC. but he should cultivate the entire area leased. a lease contract was executed between spouses San Diego and a certain Regino Cassanova for a period of four (4) years at P400. Hilario vs. Endaya vs. In 1980. Fideli continued tilling the land despite the Endaya's demand to vacate the property. 130 SCRA 482)." Successors-in-interest of the true and lawful landholder/owner who gave the consent are bound to recognize the tenancy established before they acquired the agricultural land. The area of agricultural land that a lessee may cultivate has no limit. Court of Appeals. While the contract was subsisting. The Hilarios claimed that they acquired the landholding from the Philippine National Bank after a foreclosure proceeding. the Supreme Court held that tenancy relation does not exist where a usurper cultivates the land. In Hilario vs.5 ha to certain individuals and what remained under his cultivation was ½-ha owned by Corazon Pengzon. In both cases.Chapter I). sharing equally with Cassanova the net produce of the harvests. Court of Appeals. 148 SCRA 573 (1987). consent must be given by the true and lawful landholder of the property. According to Baltazar. Corazon Pengzon explained that she did not get any share from the produce of the land since 1964 and she would not have accepted it knowing that she did not own the property anymore. including but not limited to crop lands. "So the mere cultivation of the land by usurper cannot confer upon him any legal right to work the land as tenant and enjoy the protection of security of tenure of the law (Spouses Tiongson vs. idle land and abandoned land. Fideli signed as witness. no new contract was executed. 130 SCRA 482. Fideli continuously worked on the property. After Socorro's death. "agricultural land" refers to land devoted to any growth. the Hilarios started cultivating a 4. salt beds. Held: Baltazar is not a tenant because no consent was given by Pengzon. The contract was subsequently renewed to last until 1980. the land was sold to spouses Endaya. Sometime in 1980. he relinquished 1.00 per ha per annum rental and gave him the authority to oversee the planting of crops. Intermediate Appellate Court 148 SCRA 573 (1987) Facts: Salvador Baltazar was working on the land pursuant to a contract executed between him and Socorro Balagtas involving a two (2)-ha property. Consent by landholder As discussed earlier. Under RA 3844. Court of Appeals 215 SCRA 109 (1992) Facts: Spouses San Diego owned a 2. tenancy relationship can only be created with the consent of the true and lawful landholder through lawful means and not by imposition or usurpation. Fideli refused to leave and deposited with Luzon Development Bank the landowner's share in the harvests. In 1974. The property has been cultivated by Pedro Fideli as a tenant of the couple under a 50-50 sharing agreement. On the other hand. Fideli filed a complaint praying that he be declared the agricultural tenant of the . Prior to the sale.Purpose is agricultural production Held: It is true that the Court has ruled that agricultural tenancy is not created where the consent of the true and lawful owners is absent. cultivation is not limited to the plowing and harrowing of the land. but also the husbanding of the ground to forward the products of the earth by general industry. 10 of RA 3844. the gathering of the coconuts. the Caballes asked Abajon to leave because they needed the property. (at 118. 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. paying a monthly rental to the owner. The rule finds no application in the case at bar where the petitioners are successors-in-interest to a tenanted land over which an agricultural leasehold has long been established. and the clearing thereof by gathering dried leaves and cutting of grasses. fencing of certain areas. husking and handling as well as the processing thereof into copra. cultivation includes the clearing of the landholding. Personal cultivation Cultivation Held: The fact of sharing alone is not sufficient to establish a tenancy relationship. although at times with the aid of hired laborers. the private respondent is not a tenant of the herein petitioner. The trial court ruled in favor of the Endayas but the same was subsequently reversed by the CA holding that Fideli is an agricultural lessee entitled to security of tenure. Andrea Millenes. Consequently. underscoring supplied). Department of Agrarian Reform 168 SCRA 248 (1988) Facts: Spouses Caballes acquired subject land from the Millenes family. Abajon was also allowed to plant on a portion of the land and that the produce thereof would be shared by them on a 50-50 basis. as amended. Endayas. Sec. it is clear that the private respondent was never a tenant of the former owner. The consent given by the original owners to constitute private respondent as the agricultural lessee of the subject landholding binds private respondents who. During the trial the former landowner testified that Abajon dutifully gave her 50% share of the produce of the land under his cultivation. Caballes vs. the taking care of the land and fruits growing thereon. When the new owners took over. Under DAR AO 5 (1993). their piling. Agricultural production as the primary purpose being absent in the arrangement. acquiring not only their rights but also their obligations. as successors-in-interest of the Spouses San Diego. there was no intention to constitute the worker as the agricultural lessee of the farm land. Abajon constructed his house on a portion of the property. In coconut lands. But this doctrine contemplates a situation where an untenanted farm land is cultivated without the landowner's knowledge or against her will or although permission to work on the farm was given. they told Abajon to transfer his dwelling to the southern portion of the property because they would be building a poultry near Abajon's house. Simply stated. Abajon refused. Later. . Tenancy status arises only if an occupant of a parcel of land has been given its possession for the primary purpose of agricultural production. does not apply. step into the latter's shoes. 177 SCRA 294). and he was not obligated to pay any price certain to nor share the produce. 7 of RA 1199. There should be personal cultivation by the tenant or by his immediate farm household or members of the family of the lessee or other persons who are dependent upon him for support or who usually help him in his activities (Evangelista vs. and the lessee cannot hire many persons to help him cultivate the land (De Jesus vs. The tenant has a right to continue working on the land except when he is ejected therefrom for cause as provided by law (De Jesus vs. the Court held that the element of personal cultivation is essential for an agricultural leasehold. Pangilinan. he was allowed to build his house thereon and to plant specified plants without being compensated." The Supreme Court has consistently ruled that once a leasehold relation has been established. In Tanpingco vs. 158 SCRA 41). In Oarde vs. 175 SCRA 559). under the leasehold tenancy system. Tanpingco filed a complaint for payment of disturbance compensation against Benedicto Horca.. Dizon. that he was . the agricultural lessee is entitled to security of tenure. the Court upheld the validity of donation but the donee must respect the rights of the tenant and ordered the donee to pay the tenant disturbance compensation. he was to supervise applications for loans from those residing therein. sharing the produce with the landholder under the share tenancy system. 175 SCRA 559 [1989]). it is clear that absent a sharing arrangement. 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. himself. Servidad. 1199 as a person who. Tanpingco alleged that he is the tenant-lessee in Horca's riceland under a leasehold contract. 107 SCRA 276 (1981). IAC. CaSHAc Under Sec. supra. supra. with the latter. CA. Compensation in money and/or produce In Matienzo v. Sr. cultivates the land belonging to or possessed by another. IAC.Meaning of "Personal Cultivation" "Personal cultivation" exists when a person cultivates the land by himself and with the aid available from his immediate farm household. 207 SCRA 653 (1992). or paying to the landholder a price certain or ascertainable in produce or in money or both. with the latter's consent for purposes of production. CA. From the above definition of a tenant. The law is explicit in requiring the tenant and his immediate family to work the land (Bonifacio vs. Transfer of ownership or legal possession does not affect security of tenure. and with the aid available from within his immediate household. Intermediate Appellate Court 207 SCRA 653 (1992) Facts: In 1985. IAC. the Court held that the tenancy relation was severed when the tenant and/or his immediate farm household ceased from personally working the fishpond when he became ill and incapacitated. What transpired was that plaintiff was made overseer over a 7-hectare land area. no tenancy relationship had ever existed between the parties. he had no sharing arrangement between him and defendant. the Supreme Court held that: Security of Tenure A tenant is defined under section 5(a) of Republic Act No. he was free to clear and plant the land as long as he wished. In Gabriel vs. "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. et al. Tanpingco vs. and an impairment of. Primero assailed the constitutionality of Sec. 675 (1957). 9 and 50 of RA 1199 claiming that said provisions are limitations on freedom of contract. As elucidated in the case of Bernardo v. However. Republic Act 1199 is unquestionably a remedial legislation promulgated pursuant to the social justice precepts of the Constitution and in the exercise of the . The only instances when the agricultural leasehold relationship is extinguished are found in Section 8. as in the instant case. the owner has the right to dispose of a thing without other limitations than those established by law. As an incident of ownership. The constitutionality of the provision on security of tenure has long been settled by the Supreme Court in the case of Primero vs. Held: The provisions of law assailed as unconstitutional do not impair the right of the landowner to dispose or alienate his property nor prohibit him to make such transfer or alienation. 28 and 35 of the Code of Agrarian Reforms of the Philippines. Time and again. security of tenure is a legal concession to agricultural lessees which they value as life itself and deprivation of their landholdings is tantamount to deprivation of their only means of livelihood." (at 657-658. Primero filed a case with CAR which subsequently dismissed the same. underscoring supplied). gives the agricultural lessee the right to work on the landholding once the leasehold relationship is established. as amended. He can only be ejected by the court for cause. therefore. Culture and Sports. the new owner must respect the rights of the tenant. 675 (1957) Facts: Primero owns a tenanted riceland in Cavite.asked to desist from working on the land because it was already donated to the Ministry of Education. they only provide that in case of transfer or in case of lease. or limitation on. he notified his tenant advising the latter to vacate the land. the tenancy relationship between the landowner and his tenant should be preserved in order to insure the well-being of the tenant or protect him from being unjustly dispossessed by the transferee or purchaser of the land. the donation itself is valid. The tenant refused. the law explicitly provides that the leasehold relation is not extinguished by the alienation or transfer of the legal possession of the landholding. under Section 10 of the same Act. a denial of equal protection of law. Also. property rights. On appeal. Court of Agrarian Relations 101 Phil. It also entitles him to security of tenure on his landholding. Issue: Is the security of tenure of a tenant affected by the transfer of ownership or legal possession of an agricultural land? Constitutionality of the provision on security of tenure Held: Under Art. there is nothing to prevent a landowner from donating his naked title to the land. Because of his desire to let the property to one Porfirio Potente. The donation of the land did not terminate the tenancy relationship. and that he is willing to accept disturbance compensation or in the alternative to remain as tenant-lessee of the subject land. this Court has guaranteed the continuity and security of tenure of a tenant even in cases of a mere transfer of legal possession. 7 of RA No. 101 Phil. in other words. the purpose of the law in question is to maintain the tenants in the peaceful possession and cultivation of the land or afford them protection against unjustified dismissal from their landholdings. However. Primero vs. Court of Agrarian Relations. Sec. 3844. Court of Appeals (168 SCRA 439 [1988]). 428 of the Civil Code. 25. To have possession and peaceful enjoyment of the land. enunciates the principle of security of tenure of the tenants. (Primero vs. .In Pineda vs. growing crops. and other improvements on the land and perform all the work therein in accordance with proven farm practices. the lessee shall have the following responsibilities under Sec. and To mechanize all or any phase of his farm work. sec. It is a statute relating to public subjects within the domain of the general legislative powers of the State and involving the public rights and public welfare of the entire community affected by it. XIV. Its termination can take place only for causes and reasons provided in the law. and an impairment of or a limitation on property rights. On the other hand. 1957) (at 1456). a denial of the equal protection of the law. always a tenant. was passed by congress in compliance with the constitutional mandates that "the promotion of social justice to insure the well-being and economic security of all the people should be the concern of the State" (Art II. Court of Industrial Relations. 11. 36) a) Cultivate and take care of the farm. The principle is epitomized by the axiom on land tenure that once a tenant. G. 26 of RA 3844: h) To be paid disturbance compensation in case the conversion of the farmholding has been approved (Rep. g) To have the right of pre-emption and redemption. such that it prescribes that the relationship of landholder and tenant can only be terminated for causes provided by law. Rights and Responsibilities of the Parties Rights and responsibilities of lessee The lessee shall have the following rights: a) c) b) To manage and work on the land in a manner and method of cultivation and harvest which conform to the proven farm practices. like the previous tenancy laws enacted by our lawmaking body. sec. 6). as amended. 21 SCRA 1450 (1967). No.R. 3844 [1963]. 5) and that "the state shall regulate the relations between landlord and tenant in agriculture" (Art. e) To continue in the exclusive possession and enjoyment of any homelot the lessee may have occupied upon the effectivity of RA 3844. d) To deal with millers and processors and attend to the issuance of quedans and warehouse receipts of the produce due him/her. 23. (at 680). May 29. Act No. Attacks on the constitutionality of this guarantee have centered on the contention that it is a limitation on freedom of contract. 24. de Guzman. abandons or is ejected from the landholding. The assault is without reason. Republic Act 1199. the Supreme Court also held: police power of the state to promote the commonwealth. 12. Republic Act 1199. sec. f) To be indemnified for the costs and expenses incurred in the cultivation and for other expenses incidental to the improvement of the crop in case the lessee surrenders. L-10594. The law simply provides that the tenancy relationship between the landholder and his tenant should be preserved in order to insure the well-being of the tenant and protect him from being unjustly dispossessed of the land. Section 49 of the Agricultural Tenancy Act. It was established pursuant to the social justice precept of the State to promote the common weal. facilities. without prejudice to his/her direct action against the trespasser. b) To be issued a warehouse receipt (quedan) or molasses storage certificate by the sugar central for the manufactured sugar. Herminigildo refused to vacate the property and insisted that he is entitled to occupy the land since he is helping his mother. No. the corporation's tenant. .b) Inform the lessor within a reasonable time of any trespass committed by third persons on the farm. therefore. and One of the rights of a lessee is to be entitled to a homelot. if not colonies. Cecilleville Realty and Service Corporation vs. as what private respondent wanted this Court to dole-out. private respondent does not dispute that he is not petitioner's tenant. among other things. 5 [1993]): a) To enter into a contract with the sugar central millers for the milling of the sugarcane grown on the leased property. he admits that he is a mere member of Ana Pascual's immediate farm household. to cultivate the property. d) e) To pay the lease rental to the lessor when it falls due. the tonnage of the delivered cane and analysis of the crusher juice. of houses. O. molasses and other by-products. Held: Only a tenant is granted the right to have a home lot and the right to construct or maintain a house thereon. c) To have free access to the sugar central's factory. a portion of which is occupied by Herminigildo Pascual. e) To be given 30 days notice in writing before the sugar and other by-products are sold through public auction. c) Take reasonable care of the work animals and farm implements delivered to him/her by the lessor and see to it that they are not used for purposes other than those intended. if the Court were to follow private respondent's argument and allow all the members of the tenant's immediate farm household to construct and maintain their houses and to be entitled to not more than one thousand (1. and laboratory for purposes of checking and/or verifying records and procedures in the processing of sugarcane through professional representation. In fact. . Court of Appeals 278 SCRA 819 (1997) Facts: Petitioner Cecilleville Realty owns a parcel of land. And here. then farms will be virtually converted into rows. Thus. Under the law.000) square meters each of home lot. or used by another without the knowledge and consent of the lessor. the lessee shall have the following rights to be exercised by him personally or through a duly registered cooperative/farmers' association of which he is a bona fide member (DAR Adm. we find private respondent not entitled to a homelot. In sugarcane lands. . Keep the farm and growing crops attended to during the work season. d) To be furnished a weekly statement of cane and sugar account showing. But only the tenant-lessee has this right and that members of the immediate family of the tenants are not entitled to a homelot. Neither is he entitled to construct a house of his own or to continue maintaining the same within the very small landholding of petitioner. and . Despite repeated demands. e) To discourage. the formation. No. and To mortgage expected rentals (Rep. 5 [1993]and DAR Adm. Act No. improvement of the fertility and increase in productivity. and d) The lessor may propose a change in use but the change shall be agreed upon by the landowner and the lessee. No. a) c) The lessor shall have the following rights: b) planted. 29): To require the lessee. indiscriminate cutting of coconut trees will be deemed prima facie evidence to dispossess the tenant of his/her landholding unless there is written consent of the lessee and there is PCA certification. copy of the findings and recommendations of which shall be furnished to affected tenants or lessees. Termination of Tenancy Relation Causes for termination of leasehold relation Section 8 of RA 3844 provides that agricultural leasehold relation shall be extinguished by the following acts or omissions: a) Abandonment of the landholding without the knowledge of the agricultural lessor. or in the kind of crops him/her. To dispossess the lessee of his/her landholding except upon authorization by the Court. 5 [1993]) The lessor shall have the following obligations: a) To keep the lessee in peaceful possession and cultivation of the land. the payment of the taxes or part thereof levied by the government on the land. maintenance or growth of unions or organizations of lessees in his/her landholding. 31 of RA 3844 provides that the lessor is prohibited to perform any of the following acts: a) b) To keep intact such permanent useful improvements existing on the landholding at the start of the leasehold relation (Rep. No. 19 [1989]). Act No.Rights and responsibilities of lessor f) To be provided with the standard tonnage allocation by the miller/sugar central. b) To require the lessee to assume. In case of disagreement. or in his absence the Regional Agrarian Reform Adjudicator (RARAD) (DAR Adm. directly or indirectly. or a resolution from the Municipal Board allowing the cutting for valid reasons (DAR Adm. any rent or obligation of the lessor to a third party. sec. . 30). sec. directly or indirectly. taking into consideration his/her financial capacity and the credit facilities available to Sec. O. directly or indirectly. the matter may be settled by the Provincial Agrarian Reform Adjudicator (PARAD). and f) For coconut lands. c) To require the lessee to assume. to adopt proven farm practices necessary to the conservation of the land. 3844 [1963]. d) 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 lease rental. O. To propose a change in the use of the landholding to other agricultural purposes. To inspect and observe the extent of compliance with the terms and conditions of the leasehold contract. 3844 [1963]. O. Nisnisan. failure to cultivate the land by reason of the forcible prohibition to do so by a third party cannot also amount to abandonment. et al vs. as a mode of extinguishing agricultural leasehold tenancy relations. . or Conversion of the land to non-agricultural uses also extinguishes the leasehold relation because the subject land is no longer an agricultural land and the purpose is no longer agricultural production. means to forsake entirely. countered that spouses Nisnisan have no cause of action because they voluntarily surrendered their landholding. In 1978. Abandonment In the case of Teodoro vs. it was held that the word "abandon. Effect of death or permanent incapacity of tenant-lessee on leasehold relation c) Absence of an heir to succeed the lessee in the event of his/her death or permanent incapacity. much less determined by mere implication. voluntary surrender. In 1976. for abandonment presupposes free will. with intent never again to resume or claim one's rights or interests. to forsake or renounce utterly. underscoring supplied). has been cultivating one (1) ha of said land since 1961." (at 19-20. private respondents failed to present any evidence to show that petitioners-spouses surrendered their landholding voluntarily after the private respondents purchased the subject property. Moreover. Gavino sold two (2) ha of the land. However. Policarpio and family were ousted." in its ordinary sense. Policarpio." In other words. and hence the meaning of giving up absolutely.b) Voluntary surrender of the landholding by the agricultural lessee. Under Sec. the son of Gavino. They then filed an action for reinstatement of tenancy against the Manceras. the act of abandonment constitutes actual. Gavino and Policarpio executed a leasehold contract which stipulates a sharing arrangement of 1/3:2/3 of the harvest. the tenant affected by the conversion is entitled to disturbance compensation which must be paid within sixty (60) days from the issuance of the order of conversion. 16 of DAR AO 1 (1999). much less determined by mere implication. 8 of RA 3844. including the land tenanted by Policarpio. must be convincingly and sufficiently proved by competent evidence. on the other hand. . supra.9774 hectare land in Davao del Sur. absolute and irrevocable desertion of one's right or property. the filing of the complaint for reinstatement of leasehold tenancy by petitionersspouses against private respondents before the CAR militates against the private respondents' claim that petitioners-spouses voluntarily surrendered their landholding to them. Issue: Is the tenant deemed to have voluntarily surrendered subject landholding? Held: Other than their bare allegations. As a result of the sale. written notice of which shall be served three months in advance. The tenant's intention to surrender the landholding cannot be presumed. The Manceras. Court of Appeals 294 SCRA 173 (1998) Facts: Spouses Gavino and Florencia Nisnisan are the owners of a 4. to spouses Mancera. . Likewise. Voluntary surrender of property The tenant's intention to surrender landholding cannot be presumed. but must be convincingly and sufficiently proved. Macaraeg. under Sec. . "The emphasis is on the finality and the publicity with which some thing or body is thus put in the control of another. 36 of RA 3844. sec. and increase its productivity taking into consideration the lessee's financial capacity and the credit facilities available to him. Panganiban. Act No. commercial. 9). The leasehold relation is not terminated by death or permanent incapacity of the landholder-lessor. disturbance compensation is equivalent to five [5] times the average of the gross harvest on his landholding during the last five [5] preceding calendar years. as amended by RA 6389. improve its fertility. Also. the transferee is subrogated to the rights and substituted to the obligations of the lessor. it was held that when non-payment of lease rentals occurs for several years. in case of death or permanent incapacity. destruction or unreasonable deterioration of the land or any permanent improvement thereon due to the fault or negligence of the lessee. The age requirement is applied under the presumption that all heirs/successors are qualified. as amended. Sec. 10 of RA 3844 provides that the mere expiration of the term or period in a leasehold contract nor by sale.Under Sec. 9 of RA 3844. industrial or some other urban purposes subject to payment of disturbance compensation to the lessee. provided the lessee shoulders the expenses. chosen by the lessor within one month from such death or incapacity. alienation or transfer of the legal possession of the landholding does not extinguished leasehold. 36 [1] of RA 3844. The eldest direct descendant by consanguinity. In these cases. the lessee is now allowed to intercrop or plant secondary crops after the rental has been fixed. from among the following: a) c) b) The surviving spouse. g) The landholding is declared by the DAR to be suited for residential. a lessor who ejects his tenant without the court's authorization shall be liable for: .) c) The lessee failed to adopt proven farm practices necessary to conserve the land. said omission has the effect of depriving the landowner of the enjoyment of the possession and use of the land. (Note: Under Sec. the leasehold relation continues between the lessor and the person who can cultivate the land personally. 6 SCRA 338 (1962). or e) The lessee failed to pay lease rental on time except when such non-payment is due to crop failure to the extent of 75% as a result of a fortuitous event. d) There has been substantial damage. (Note: Under DAR AO 5 [1993].) In the case of Garchitorena vs. 36 (1) of RA 3844. Dispossession of Tenants Under Sec. dispossession of tenants may be authorized by the Court in a judgment that is final and executory if after due hearing it is shown that: a) The lessee failed to substantially comply with the terms and conditions of the contract or with pertinent laws unless the failure is caused by a fortuitous event or force majeure. It binds his legal heirs (Rep. Under Sec. 3844 [1963]. b) The lessee planted crops or used the land for a purpose other than what has been previously agreed upon. f) The lessee employed a sub-lessee. The next eldest descendant or descendants in the order of age. threshing of said crops: Provided. hauling. Computation of lease rental shall include both primary and secondary crops existing as of 15 June 1988. CHAPTER 3 Land Acquisition Registration of Landholdings and Landowners .a) c) b) damages suffered by the agricultural lessee in addition to the fine or imprisonment for unauthorized dispossession. hauling and processing whichever is applicable (DAR Adm. volcanic eruption. are considered allowable deductions from the normal harvest in order to determine the lease rental. or 10 September 1971. Secondary crops which are planted to an aggregate area of half a hectare or less shall not be included in the computation of the lease rental (DAR Adm. loading. threshing. 5 [1993]). O. the estimated normal harvest during the three (3) preceding agricultural years shall be considered as the normal harvest. 5 [1993]). If there had been no normal harvest. the date of effectivity of RA 6389 for tenanted rice and corn lands. earthquake. No. the period may be shorter or longer than a calendar year. d) payment of attorney's fees incurred by the lessee. • 15 June 1988 or date of leasehold agreement by the parties concerned. however. "Agricultural year" refers to the period of time required for raising a particular product. and the like. for all other agricultural lands after deducting the amount used for seeds and the cost of harvesting. In both cases. The lease rental shall cover the whole farmholding attended to by the lessee. No. That in case of crops yielding more than one harvest from one planting. planting and harvesting of crops and. DAR AO 5 (1993) defines "normal harvest" as the usual or regular produce obtained from the land when it is not affected by any fortuitous event like drought. and processing. threshing. "agricultural year" shall be the period from the preparation of the land to the first harvest and thereafter from harvest to harvest. including the preparation of the land. O. The law states that only the amount used for seeds and the cost of harvesting. whenever applicable. If the land has been cultivated for a period of less than three agricultural years prior to 15 June 1988. the final rental shall be based on the average normal harvest during these three (3) preceding agricultural years. and the reinstatement of the lessee. whichever is sooner. whichever is applicable. loading. Determination of Lease Rentals The lease rental shall not be more than the equivalent of 25% of the average normal harvest during the three (3) agricultural years preceding the following dates: • • 15 June 1988 or date the tenant opted to enter into leasehold agreement. whichever is sooner. fine or imprisonment. sowing. After the lapse of the first three (3) normal harvests. the initial rental shall be based on the average normal harvest during the preceding agricultural years when the land was actually cultivated. for tenanted sugar lands. Landholdings Covered by CARP . The objectives of this activity include the validation of data reported by landowners under the LISTASAKA program. or abandoned their lands. and The effects of non-registration provided in Sec. and to provide basic data for the planning and development of support programs. Under this administrative order. DAR AO 10 (1989) does not provide for any penalty against the failure of a farmer to register.O. denominated as Listasaka II. 40 of EO 229. are now deemed superseded by Sec. the crops planted in the property and the area covered by each crop as of 1 June 1987. natural or juridical. This repeats the requisites of registration as embodied in the earlier measure but does not provide. and government entities that own or claim to own agricultural lands. the average gross income from the property for at least three (3) years. that in case of failure or refusal to register the land. 22 and 23 of RA 6657. lease. to file a sworn statement with the assessor's office. the terms of mortgages. the Supreme Court stated: Registration of Potential Beneficiaries The complaint against the effects of non-registration of the land under E. the registration of new qualified registrants is undertaken as a continuing activity of the DAR. The registration drive. if the landowner fails to register within the prescribed period. the government shall base the valuation of his property for landowner compensation purposes on the City/Provincial Assessor's value. the CARP Law says that the just compensation shall be ascertained on the basis of the factors mentioned in its Section 17 and in the manner provided for in Section 16. disposed of. He may simply avail of the next registration period. 229 does not seem to be viable any more as it appears that Section 4 of the said Order has been superseded by Section 14 of the CARP Law. the names of all tenants and farmworkers therein. Beneficiaries of PD 27 who have culpably sold. 14 of RA 6657 requires all persons. No. the latest declared market value of the land as determined by the city or provincial assessor.Sec. which originally provided for the compulsory registration of agricultural landholdings. are required. On the contrary. Effect of farmer's failure to register The failure of a farmer to register does not have any effect prejudicial to his rights as a potential farmerbeneficiary. whether. 14 of RA 6657 which does not provide for such effects. however. and management contracts subsisting as of 1 June 1987. and landowners of PD 27 beneficiaries who already own or have already received at least three (3) hectares of land are excluded from registration. Effect of failure to register Under Sec. 4 of EO 229 (1987). containing the following data: a) c) b) d) e) f) the description and area of the property. is governed by Department of Finance MC 5 (1988). In the Associationcases. as the latter did. in their names or in the name of others. they being disqualified to become beneficiaries under Secs. the valuation thereof shall be that given by the provincial or city assessor for tax purposes. The registration of beneficiaries is governed by DAR AO 10 (1989). The law requires the DAR to register all potential beneficiaries and compile a data bank containing pertinent information on them. The schedule of acquisition and distribution of agricultural lands covered by CARP is provided for under Sec. 7 of RA 6657. Land distribution and acquisition covers three phases. However, this does not mean that in the implementation of the program, a particular category should be finished first before going to the next category. In other words, the three (3) phases as outlined in Sec. 7 should not be interpreted as an exclusive order of priority. Rather, what is contemplated is simultaneous over-all implementation (Records of the Senate, Volume I, No. 101, pp. 3239-32340; Speech of Rep. Roño, Congressional Deliberations, 6 October 1987). The guiding principle in the implementation of the program is the readiness of the different farmer groups to work fully without restraints on the land and make the land productive (Sponsorship Speech of Rep. Andolana, Congressional Deliberations, 23 September 1987). It is within this framework that the following lands are to be acquired by the Republic of the Philippines for ultimate distribution to the qualified farmer-beneficiaries: rice and corn lands under PD 27/EO 228; idle or abandoned lands; lands foreclosed by private and government financial institutions; private agricultural lands; lands acquired by the Presidential Commission on Good Government (PCGG), and public agricultural lands. Rice and corn lands under PD 27 and EO 228 At the time of the deliberations on House Bill No. 400, otherwise known as "An Act Instituting a Comprehensive Agrarian Reform Program and Providing the Mechanism for Its Implementation," and Senate Bill No. 249, otherwise known as "An Act Instituting a Comprehensive Agrarian Reform Program to promote Social Justice and Industrialization, Providing the Mechanism for its Implementation and for Other Purposes," the agrarian reform program was already in place, albeit limited in scope. Specifically, on 21 October 1972 then President Marcos, through PD 27, instituted the agrarian reform program and placed all tenanted rice and corn lands under its coverage. On 17 July 1987, President Aquino issued EO 228 which declared full ownership by qualified farmer beneficiaries of lands they acquired by virtue of PD 27. During the congressional deliberations, it was noted that as of 1987 or fourteen (14) years of implementation of PD 27, approximately 547,000 hectares involving 397,896 beneficiaries had been left untouched. The inclusion of rice and corn lands under PD 27 and EO 228 in the CARP is to be seen as a mere continuation of an unfinished business. (Speech of Rep. Gillego, Congressional Deliberations, 6 October 1987). Idle or abandoned land The DAR is mandated to initiate the expropriation or acquisition of idle or abandoned agricultural lands at the earliest possible time for distribution to farmer-beneficiaries of the agrarian reform program (Const. Art. XVIII, sec 22; EO 229, sec 18[h]). Idle or abandoned land refers to any agricultural land not cultivated, tilted or developed to produce any crop nor devoted to any specific economic purpose continuously for a period of three (3) years immediately prior to the receipt of notice of acquisition by the government as provided under this Act, but not include land that has become permanently or regularly devoted to non-agricultural purposes. It does not include land which has become unproductive by reason of force majeure or any other fortuitous event, provided that prior such event, such land was previously used for agricultural or other economic purpose (RA 6657, sec 3 [e]). Private agricultural lands Private agricultural lands within the context of RA 6657 refer to those lands devoted to agricultural activity and not classified as residential, commercial or industrial owned by persons, whether natural or juridical, other than the government or its instrumentalities. Abandoned private agricultural lands, commercial farms and agricultural lands subject of mortgage or foreclosure by natural or juridical persons, private banking or financial institutions are special classes of private agricultural lands subject of acquisition or distribution to farmer-beneficiaries. Agricultural lands under mortgage or foreclosure Mortgage is an accessory contract whereby the debtor (or a third person) guarantees the performance of the principal obligation by subjecting real property or real rights as security in case of non-fulfillment of said obligation within the period agreed upon. A mortgage follows the property whoever the possessor may be and subjects it to the fulfillment of the obligation for whose security it was constituted. (Bonnevie vs. Court of Appeals, 125 SCRA 122, [1983]). Therefore, even if the ownership of the mortgaged property changes, the encumbrance, unless extinguished by any means allowed by law, subsists. The parties to such contract, the mortgagee and the mortgagor under the law, have their respective rights and obligations. It is the essence of the mortgage contract that when the principal obligation becomes due, the things in which the mortgage consists may be alienated for the payment to the creditor. (New Civil Code, Art. 2087) This remedy is referred to as foreclosure. In the foreclosure proceedings, the mortgaged property is sold on default of the mortgagor in satisfaction of the mortgage debt. The nature and the legal effects of and legal relationships formed by a contract of mortgage gives rise to an important issue: at what point may the creditor be considered as the landowner and when may he be treated as a mere lienholder for the purpose of placing the landholdings under CARP coverage? When placing mortgaged private agricultural lands under CARP, it is important to distinguish between the status of creditor as landowner and creditor as lien-holder/mortgagee. The significance of this distinction lies in the rights and obligations to which the landowner and mortgagee are entitled and subjected to as enumerated in Sec. 8 and 9 of DAR AO 1 (2000). Thus, the creditor-mortgagee shall be considered as the landowner for the purpose of covering the properties under CARP under two (2) circumstances: (a) when the mortgagee is the purchaser in the foreclosure sale and the redemption period has already expired where the right of redemption exists; or (b) when the mortgagee is the purchaser in the foreclosure sale and said sale is confirmed by the court in cases where only equity of redemption is provided (DAR Adm. O. No. 1 [2000], sec. 4). On the other hand, the creditor is considered as a lien-holder or mortgagee if as of the date the land transfer claim was received by the Land Bank of the Philippines (LBP) from the DAR and either of the following circumstances obtain: the mortgage debt is not yet due and demandable; or the mortgage debt is already due and demandable but the mortgagee has not foreclosed on the property; or the mortgage has already been foreclosed but the period to exercise the right of redemption has not expired or the foreclosure sale has not yet been confirmed by the court in cases where there is only equity of redemption (DAR Adm. O. No. 1 [2000], sec. 5) It is likewise important to state that mortgages and other claims registered with the register of deeds shall be assumed by the government (when landholdings subject or mortgage or claim is acquired for CARP purposes) up to an amount equivalent to the landowner's compensation value as provided in Sec. 72 (b) of RA 6657. In other words, the government shall assume the mortgage indebtedness not exceeding the just compensation due the landowner. For instance, the debt secured by the mortgage is P100,000.00. Assuming that when the mortgaged landholding is placed under the CARP and acquired by the government, the landowner's just compensation is determined to be P80,000.00. In this case, what the government merely assumes is P80,000.00 out of the P100,000.00 indebtedness. This amount is what the government is obligated to pay the landowner by virtue of its acquisition under CARP. It cannot be made to pay the balance of P20,000.00. Said amount is collectible from the debtor/mortgagor. The obligation of the debtor to pay the debt to the mortgagee stands although the mortgaged property to secure the payment of said debt may have been transferred to a third person.(Mccullough & Co. vs. Veloso, 46 Phil. 1, [1924]). Commercial farms Commercial farms are private agricultural lands devoted to commercial livestock, poultry and swine raising, and aquaculture including saltbeds, fishponds and prawn ponds, fruit farms, orchards, vegetable and cut-flower farms, and cacao, coffee and rubber plantations. These farms are subject to immediate compulsory acquisition and distribution after ten (10) years from the effectivity of RA 6657 or 15 June 1988. In the case of new farms, the ten (10)-year period begins from the first year of commercial production and operation as determined by DAR (Rep. Act No. 6657 [1988], sec. 11). Upon the expiration of the ten (10)-year deferment period on 15 June 1998, the DAR issued AO 9 (1998), otherwise known as "Rules and Regulations on the Acquisition, Valuation, Compensation and Distribution of Deferred Commercial Farms." All commercial farms whose deferment expired as of 15 June 1998 shall be subject to immediate acquisition and distribution under the CARP. Those whose deferments have yet to expire will be acquired and distributed only upon expiration of their respective deferment periods as originally determined by the DAR or earlier if the DAR determines that the purpose for which it was deferred no longer exists and revokes its deferment (DAR Adm. O. No. 9 [1998], sec. 2 [a]). All infrastructure facilities and improvements including buildings, roads, machineries, receptacles, instruments or implements permanently attached to the land which are necessary and beneficial to the operations of the farm as determined by the DAR, and shall be subject to acquisition upon the recommendation of the ARBs (DAR Adm. O. No. 9 [1998], sec. 2 [d]). Commercial farms with expired deferment period shall be acquired through VOS, CA or direct payment scheme. The acquisition of facilities and improvements as a general rule, shall be encouraged through the direct payment scheme (DAR Adm. O. No. 9 [1998], sec. 24). Corporate farms Corporate farms are those owned or operated by corporations or other business associations (Rep. Act No. 6657 [1988], sec. 29). Corporate farms may be acquired through voluntary land transfer, VOS, CA and voluntary stock distribution plan (Rep. Act No. 6657 [1988], sec. 31). It must be noted that corporate farm owners cannot avail of the ten-year deferment period underDAR AO 9 (1998). Only commercial farms are subject of deferment. (Rep. Act No. 6657 [1988], sec. 11; DAR Adm. O. No. 9 [1998]). Lands owned by the State in proprietary capacity Under Sec. 1 of EO 407 (1990), all government instrumentalities were directed to transfer to the Republic of the Philippines through the DAR all landholdings suitable for agriculture. The government instrumentalities directed to do so included government agencies, government owned and controlled corporations or financial institutions such as the Development Bank of the Philippines, Philippine National Bank, Republic Planters Bank, Asset Privatization Trust, Presidential Commission on Good Government, Department of Agriculture, State Colleges and Universities, Department of National Defense and others. Modes of Acquisition of Private Agricultural Lands CARP is founded on the right of landless farmers and regular farmers to own directly or collectively the lands they till through the just distribution of all agricultural lands. To achieve this end, a mechanism is provided in the law for the identification, acquisition, distribution of agricultural lands. As earlier discussed, CARP covers both private and public agricultural lands. Since the State owns the latter, they just need to be identified and distributed to the beneficiaries. Private agricultural lands, upon the other hand, generally have to go through the acquisition process before their ultimate distribution to the farmers. In order for the acquisition process to be completed, several requisites must be satisfied. First, the land should be privately owned and found suitable for agriculture. Second, there are beneficiaries willing to take over the ownership of the land and make it more productive. Third, the landowner is paid just compensation or deposit in cash or LBP bonds is made in his name if the value is contested. Finally, title to the land is transferred in the name of the Republic of the Philippines. It must be clarified, however, that full payment of just compensation is not necessarily required in Voluntary Land Transfer (VLT)/Direct Payment Scheme (DPS) because the terms of payment of just compensation are governed by the mutual agreement of the parties, i.e., the farmer-beneficiary and the landowner. Likewise, under EO 407, the payment of just compensation to the government instrumentality as landowner may come even P. commercial. petitioners averred that said issuance is violative of the due process clause as it would be. assailed the constitutionality of LOI 474. that is. Vinzons-Magana vs. in a subsequent case. Voluntary Offer to Sell (VOS). What is more.D. (Castro vs. Estrella. due process and taking of property without just compensation grounds. or other urban purposes from which they derive adequate income to support themselves and their families. the Supreme Court explained the legal effect of land being placed under OLT as vesting ownership in the tenant. Neither is there any merit on the contention that there would be a taking of private property for public use without just compensation. In language. The Supreme Court in upholding its constitutionality held that: In the case of Locsin vs. par. .86 ha of ricelands. In this case. No other conclusion could have been reached. thirty (30) days from the registration of the ownership documents by the Register of Deeds in favor of the Department of Agrarian Reform (Exec. Compulsory Acquisition (CA). The modes by which private agricultural lands may be acquired are as follows: Operation Land Transfer (OLT). even a month before its adoption by the 1971-1972 Constitutional Convention. conforming as it did to what the fundamental law ordained. However. It is a mode by which ownership of tenanted rice and corn lands is transferred to tenant-beneficiaries. Furthermore. Its validity. arguing that it is a class legislation and therefore a violation of the equal protection clause. 407 [1990]. sec. as applied to them. .after land distribution. 1.14 ha of coconut lands and 1. No. 4). There is no merit to the contention that LOI 474 denies equal protection. The Constitution itself imposes the duty of the State to emancipate the tenants from the bondage of the soil. Order No. a taking of private property without just compensation. and there are safeguards therein to assure that there are no arbitrariness or injustice in its enforcement. . . LOI 474 (1976) was issued placing all tenanted rice and corn lands with areas of seven (7) ha or less belonging to landowners who own other agricultural lands exceeding seven (7) ha or lands used for residential. The attack on due process ground is unavailing as on the face of the challenged measure fairness and justice may easily be discerned. LOI 474 was subjected to constitutional scrutiny in the case of Zurbano vs. industrial. there is no legal basis for declaring LOI No. There are. Valenzuela. In the same manner that full payment of just compensation is not always necessary to complete acquisition. 194 SCRA 195 (1991). scheme and framework. transfer of title to the Republic of the Philippines is not necessary in VLT/DPS since the landholding is directly transferred from the landowner to the beneficiary. 137 SCRA 333 (1989). this Letter of Instruction reveals the plan and purpose to attain the goal envisioned by the Constitution but with due regard to the land owners affected. . . . . petitioners who are owners of 56. . but also the nation's history. and Voluntary Stock Distribution in the case of corporate farms. Voluntary Land Transfer/ Direct Payment Scheme (VLT/DPS). built-in safeguards to preclude any unlawful taking of the property. Subsequently. It must be stressed that for lands to come under OLT pursuant to PD 27. moreover. Nothing in its language lend support to the contention that consequences so harsh and drastic would attend its implementation. The Constitution decrees no less than the emancipation of tenants. CA. . there must be first showing that they are tenanted lands. To condemn as class legislation an executive act intended to promote the welfare of tenants is to ignore not only the letter of the Constitution — incidentally cited in the petition itself — requiring the formulation and implementation of an agrarian reform program aimed at emancipating the tenant from the bondage of the soil. Operation Land Transfer Operation Land Transfer (OLT) is a mechanism established for the implementation of PD 27(1972) and EO 228 (1987). 27 was issued. to repeat. was unanimously sustained by this Tribunal. 99 SCRA 722 [1980]) LOI 227 (1974) was issued by then President Marcos directing the immediate extension of the OLT to the landholdings of over seven (7) hectares. 474 void on its face on equal protection. under Presidential Decree No. . as the Locsin doctrine enunciated. This is because the issuance of a Certificate of Land Transfer (CLT) over a landholding presupposes that the property has already been covered under the OLT. is evidence of ownership. ownership of the land is transferred to the farmer at the time the property is placed under OLT. i. being merely a CLT holder is not the owner of the subject property and thus. being a bona fide tenant of and holder of Certificate of Land Transfer covering the subject properties. dated 1 April 1975 and EO No. 2-C-A-3) subjected to Operation Land Transfer moved from the registered owner (the old landowner) to the tenants (the new landowners). the latter case of Vinzons-Magana disputes this conclusion.Estrella. petitioner sought to intervene in the expropriation proceedings filed by the Republic of the Philippines over the subject parcel of land. the petitioners are owners of a landholding which was subject to the lifetime usufructuary of private respondent. The subject landholding was placed under the Operation Land Transfer. However. if indeed. The Court. it appears clear that ownership over lands (like Lot No. . In general. . the unamortized portion being payable by the Land Bank. upholding the petitioners contention. The fifteen (15) annual amortizations to be paid by the tenants-owners were intended to replace the landholdings which the old landowners gave up in favor of the new landowners. not entitled to just compensation. the leasehold system was "provisionally maintained" but the "lease rentals" paid by the tenants-farmers prior to such full payment by the Land Bank to the old landowner. if the land was irrigated. 183 SCRA 252 (1990). rather than upon completion of payment of the price of the land. 201 SCRA 536 [1991]. Valenzuela. referred to above. 27. the basic statute. then. It follows that in respect of land subjected to Operation Land Transfer. the High Tribunal. 228 dated 17 July 1987. Therefore. There seems to be an inconsistency regarding the treatment of the legal effect of the placing of the property under the Operation Land Transfer. ruled that the petitioner. Reading the foregoing provisions together. the tenant-farmer became owner of a family-size farm of five (5) hectares or. the leasehold system was legally and effectively terminated immediately on 21 October 1972 (notwithstanding the curious statement in Department Circular No. . . would be credited no longer as rentals but rather as "amortization payments" of the price of the land. 57 (supra). and that the tenant-owner had to pay for the cost of the land within fifteen (15) years by paying fifteen (15) equal annual amortization payments. Petitioners filed a collection suit against the private respondent claiming that the payments made by the tenants in the subject properties should be considered as amortization payments for the price of land and as such should belong to the landowners and not to the usufructuary. Tamayo. In the case of Locsin vs. Department Circular No. the Court stated that: The exemption of the old landowner from the capital gains tax on the amortization payments made to him by the tenants-purchasers. 27. citingPagtalunan vs. that ownership or dominion over the land moved immediately from landowner to tenant-farmer. the tenants-owners. 57. ruled that the mere issuance of a certificate of land transfer does not vest ownership in the farmer/grantee. by construing PD No. Pending full payment of the cost of the land to the old landowner by the Land Bank of the Philippines.e. Thus. 27 in relation to PD No. 194 SCRA 195 (1991). . underscores the fact. Petitioner argues that he. it necessarily follows the CLT. In the case of Pagtalunan vs. three (3) hectares. In explaining the nature of the CLT. In respect of lands brought within the coverage of Operation Land Transfer. 27. the tenants-farmers became owners of the land they tilled as of the effective date of Presidential Decree No. being an instrument issued subsequent to the coverage of the land under OLT. . the tenant-farmer became owner of the land as of 21 October 1972. The Supreme Court. It was in respect of lands not yet subjected to the terms and effects of Operation Land Transfer that the leasehold system did continue to govern the relationship between the "landowner and his tenanttillers". Tamayo which predated the Locsin case. capital gains are realized only when the owner disposes of his property. 21 October 1972. ruled that under PD No.. is entitled to the proceeds of the expropriation. we observe that under Presidential Decree No. 8 that it was "provisionally maintained"). in rejecting petitioner's contention. 8. Why then was EO No. The Pagtalunan doctrine was reiterated in the case of Vinzons-Magana vs. Therefore. the farmer/grantee. mean that landholdings voluntarily offered for sale are automatically accepted by DAR. Tamayo. Decree No. 816]. Moreover. or has a . . full compliance by the grantee with the abovementioned undertakings is required for a grant of title under the Tenant Emancipation Decree and the subsequent issuance of an emancipation patent in favor of the farmer/grantee [Section 2. however. 474 and its implementing guideline. In this case. . Decree No. held that the issue of the constitutionality of the taking of private property under the CARP law has already been settled by the Court. 228 in 1987. 27. Decree No. . Likewise. prior to compliance with these conditions. brushing aside the petitioner's theory. Failure on the part of the farmer/grantee to comply with his obligation to pay his lease rentals or amortization payments when they fall due for a period of two (2) years to the landowner or agricultural lessor is a ground for forfeiture of his certificate of land transfer [Section 2. the Court explained the nature of the CLT. Pres. it ignored altogether the legal implications of the Locsin doctrine. citing the Pagtalunancase. and is no longer open to doubt or controversy . The mere issuance of the certificate of land transfer does not vest in the farmer/grantee ownership of the land described therein. Pres. a careful study of the provisions of Pres. the facts from which the controversy arose occurred prior to the issuance of EO 228 of then President Aquino which declared that full ownership to qualified beneficiaries of the lands covered by PD No. will reveal that the transfer of ownership over these lands is subject to particular terms and conditions the compliance with which is necessary in order that the grantees can claim the right of absolute ownership over them. 201 SCRA 536 (1991). . it cannot be said that the reason behind the Locsin ruling declaring the effect of OLT as vesting ownership in the tenant is the fact that EO 228. At best. 27. was factored in the discussion of the case. . or a Transfer Certificate of Title. Under Pres. 78-1978 . Estrella. Clearly. 266 which specifies the procedure for the registration of title to lands acquired under Pres. Therefore. A VOS may be rejected if the landholding is not suitable for agriculture. However. the petitioner assailed the constitutionality of LOI No. Voluntary Offer to Sell Voluntary Offer to Sell (VOS) is a scheme whereby the landowners voluntarily offer their agricultural lands for coverage regardless of phasing. merely possesses a contingent or expectant right of ownership over the landholding. Decree No. 226]. It is the emancipation patent which constitutes conclusive authority for the issuance of an Original Certificate of Transfer. The certificate simply evidences the government's recognition of the grantee as the party qualified to avail of the statutory mechanisms for the acquisition of ownership of the land tilled by him as provided under Pres. Neither is this recognition permanent nor irrevocable. 27 as of 21 October 1972.. The Supreme Court. it is only after compliance with the above conditions which entitle a farmer/grantee to an emancipation patent that he acquires the vested right of absolute ownership in the landholding — a right which has become fixed and established. stating that it does not vest in the farmer/grantee ownership of the land described therein. 228 not considered in the subsequent case of VinzonsMagana when it was already in effect then? The ponente instead referred to the pre-Locsin case of Pagtalunan vs. . DAR Memorandum Circular No. It is noted that in all three cases. Moreover. in the name of the grantee. Decree No. 27. 27. . there is no taking of property without payment of just compensation. which categorically clarified the legal effect of PD No. Decree No. . It does not. and the certificate of land transfer issued to qualified farmers. In so doing. petitioner prayed for the cancellation of the CLT over the subject landholding arguing that the issuance of the CLT in favor of the tenant without first expropriating the property to pay the petitioner landowner the full market value thereof before ceding and transferring the land to the tenant is unconstitutional as it is confiscatory and violative of the due process clause. all cases were promulgated after the issuance of EO No. 06 (1997)] As a general rule. (DAR A. In the case of commercial farms.O. 06 [1997] II [A] 2nd par. (DAR A. said offer may be refused if there are no takers or persons willing to be agrarian reform beneficiaries and. All notices for voluntary land transfer must be submitted to the DAR within the first year of the implementation of the CARP. No. No.e. O. otherwise the property shall be placed under compulsory acquisition (Section 8 [a] DAR A.A..] It must be stressed that this should not be construed to mean that VLT/DPS is no longer allowed after one year from the effectivity of R. Landowners who voluntarily offer their lands for sale shall be entitled to an additional five percent (5%) cash payment.DAR may allow the withdrawal of voluntary offers to sell if the withdrawal of VOS is for the purpose of acquisition and compensation through the Voluntary Land Transfer/ Direct Payment Scheme (VLT/DPS).A. 1.A. 06 [1997]. however.A. No. Act No. No. [1988 ]. DAR may also allow the withdrawal of VOS if the subject landholding is determined by DAR to be more suitable for a townsite. 1999. It is argued that that the exact moment when the one-year period under Section 20. No. that the claim folder has not yet been forwarded to the LBP for the computation of the land value.O. [Memorandum of Asst. 6657. as it did in the provisions on priorities (Sec. No. O. withdrawal of VOS shall no longer be allowed after the receipt by the DAR of the letter offer for VOS. lastly. i. provided. Series of 1997. However. the law used the phrase "within the first year of implementation of the CARP" which is at the time Section 16 is implemented relative to specific and distinct classes of agricultural lands. lands mortgaged with banking and/or financial institutions cannot be the subject of VLT/DPS. No. In case lands voluntarily offered for sale are subsequently found to be outside the coverage of CARP. II [A]). 6657 within which notices of VLT/DPS may be filed commences from the date when the land subject of the VLT/DPS is scheduled for acquisition and distribution according to the various phases of implementation described under Section 7 and 11 and the landowner is served a notice of acquisition of his landholding. 11). p. Sec. the only identified ARBs are the qualified children of the landowner.). or one year after the effectivity of R. Likewise. 6657 provides that the terms and conditions of the transfer under this mode shall not be less favorable to the transferee than those of the government's standing offer to purchase from the landowner . Sec. The manner of reconveyance is governed by A. It is submitted that VLT/DPS may be entered into even beyond 15 June 1989. [Rep. the offer to sell must have been submitted before the expiration of the deferment period in order that their acquisition through VOS may be allowed. For instance. resettlement site or individual site needed to address a matter of national interest or concern in calamity situation (DAR A. [DAR A. 6657. Peñaflor for the Secretary. 09. 6. 31). 7).O. If the law intended that the one year period be reckoned from the approval or effectivity of RA 6657. It must be noted. II [C]). such lands shall be reconveyed to the original transferors.slope of more than eighteen percent (18%) and is undeveloped. 06 [1997]. No. 6657. Act No. CARP Form No. Instead. August 23. No. 02-1998). 20. (Rep.O. Negotiations between the landowners and qualified beneficiaries covering any voluntary land transfer which remain unresolved after one (1) year shall not be recognized and such land shall instead be acquired by the government and transferred pursuant to the Comprehensive Agrarian Reform Law. sec.] Section 20 (b) of R. Not all private agricultural lands may be subject of voluntary land transfer. and stock transfer option (Sec. commercial farms (Sec. 19) Voluntary Land Transfer/ Direct Payment Scheme Voluntary Land Transfer or Direct Payment Scheme (VLT/DPS) is a mode of acquisition whereby the landowner and the beneficiary enter into a voluntary arrangement for the direct transfer of the lands to the latter. par (a) of R. that banks and other financial institutions are not covered by said incentive. it would have expressly said so. 6657 (1988). Section 20 on voluntary land transfer and Section 21 on direct payment of beneficiaries. Thus. The LBP shall extend financing to the beneficiaries for purposes of acquiring the land. Hence.]. after the preparation of the master list but prior to the transmittal of the claim folder to the LBP. No.A. immediate compulsory acquisition and distribution." beginning 15 June 1998. the procedure for compulsory acquisition as provided in Section 16 shall apply. sec. 20. The restriction imposed under Section 20 (b) relative to the government's standing offer. 08. Act No. it is argued that commercial farms may be acquired only through compulsory acquisition. . .] A pressing issue respecting VLT/DPS is its application to commercial farms. 1999. August 23. [Rep. to wit: identification of beneficiaries. In short. Peñaflor for the Secretary. During this period. It should be stressed.O. Said approval should be received by the farmer-beneficiary within thirty (30) days from the date of registration. is not absolute. Act No. There is no dispute that commercial farms whose deferments have expired as of 15 June 1998 are subject to immediate compulsory acquisition and distribution as provided in Section 11 of R. the landowners and the qualified beneficiaries may. 6657 (1988). .A. Section 16 (a) to (f). 21. [DAR A. 6657 are compulsory in nature." as used in Section 11 should be understood. that all acquisitions under R. 1999. pp. manifest their intent to voluntarily arrange for direct transfer and payment of the property. The foregoing framework of acquisition is the context within which the phrase "immediate compulsory acquisition. If the notice of acquisition is served by . inspection or technical survey and valuation. by reason of the options available under Section 20 and 21. These provisions prescribe specific rules for valuation and payment which include. 6657. No. 1997(Section II (E). the phrase "immediate compulsory acquisition" under Section 11 of R. [Rep. In the event they cannot agree on the price of land. still includes VLT/DPS as an option for valuation and payment of commercial farms subject of acquisition. No. The procedures for acquisition of private lands are provided for under Chapter V.A.] The terms and conditions of VLT/DPS should include the immediate transfer of possession and ownership of the land in favor of the identified beneficiaries. however. 6657.and to resell to the beneficiaries. The situation now is that before commercial farms could be compulsorily acquired and distributed pursuant to Section 16. No. [Memorandum of Asst.(Sec.] Direct payments in cash or in kind may be made by the farmer-beneficiary to the landowner under terms to be mutually agreed upon by both parties. among others. Peñaflor for the Secretary. upon registration with the approval by the DAR. Certificates of Land Ownership Award (CLOAs) shall be issued to the ARBs with proper annotations. The voluntary agreement shall include sanctions for non-compliance by either party and shall be duly recorded and its implementation monitored by the DAR. p. when taken in the context of the procedures for acquiring lands under CARP. 6657 (1988). the preliminary steps for their acquisition have to be continued or pursued. 2-5] DPS involving commercial farms may be availed of any time during the acquisition process. even as the process of compulsory acquisition under Section 16 is already in motion. Section 17 through Section 21. Sec. in the sense that the landowners whose agricultural lands are covered by CARP have really no choice except to submit to the program. . Sec. The law itself subjects its application only in instances where there is a prior offer by the government and that the same is known to both the landowner and the qualified beneficiaries.A. One school of thought espouses the theory that VLT/DPS cannot apply to commercial farms as Section 11 ofR. if such offers have been made and are fully known to both parties. the option available under Sections 20 and 21 may still be exercised. sec. The procedure for land acquisition are further elaborated by Chapter VI. [Memorandum of Asst. 20 (b)) However this does not mean that existence of "a standing government offer" is not essential to the consummation of a VLT/DPS. 6657 specifically requires their ". It is submitted that commercial farms may be acquired not only through compulsory acquisition but through VLT/DPS as well. No. August 23. 6. which shall be binding upon them. 10 [1988] and DAR Adm. the beneficiaries shall be assured of at least one (1) representative in the board of directors. 6657. of the corporation or association. equity or participation in favor of their workers or other qualified beneficiaries. Compulsory Acquisition Compulsory acquisition is a mode whereby the land is expropriated by the State in accordance with the procedure outlined in Section 16 of R. and However. duly concurred with by the mortgagee or lienholder. 31 as implemented by DAR Adm. No. (Rep. any transfer of shares of stock by the original beneficiaries shall be void unless said transaction is in favor of a qualified and registered beneficiary within the same corporation. . if one exists. Upon mutual consent of the ARBs and the landowner. No. sec. corporate farms with a voluntary stock distribution plan must comply with the following conditions: 1) The books of the corporation or association shall be subject to periodic audit by certified public accountants chosen by the beneficiaries. in a referendum to be held for this purpose. if the subject landholding was acquired under VOS or CA [DAR A. Provided further that said agreement shall be upon mutual consent of both the ARBs and the landowner. 6657 are subject to compulsory acquisition. the ARBs may be allowed to assume such liability to be deducted from the total value of the land. sec. 09 (1998). [DAR A. Section 31 of RA 6657 states that "if within two (2) years from the effectivity of CARP. O. Likewise. CA is resumed. Act No. the land or stock transfer has not been made or the plan for such stock distribution has not been approved by the Presidential Agrarian Reform Council (PARC) within the same period. Lands subjected to Compulsory Acquisition may be allowed to shift to Voluntary Land Transfer/Direct Payment Scheme or Voluntary Offer to Sell provided that the claim folder had not yet been forwarded to the LBP for the computation of land value. compulsory acquisition is suspended. (Rep. O. All private agricultural lands which have become due under the phase of implementation as provided in Section 7 of R. the ARBs may assume the mortgage. Act No. In these cases. O.the parties upon to the DAR prior to the preparation of the master list. if negotiations fail. No. 3) Any shares acquired by such workers and beneficiaries shall have the same rights and features as all other shares. Moreover. No. the agricultural land of the corporate owners or corporation shall be subject to compulsory acquisition under existing DAR rules and regulations.A. O. the notice shall be validated by the MARO with identified ARBs included in the master list. or in a management or executive committee. 10 [1988]). However. 6657 [1988]. O. all idle or abandoned agricultural lands regardless of size are subject to compulsory acquisition. In case of delinquent real estate taxes. 06. 31 as implemented by DAR Adm. Acquisition under DPS of lands with liens and encumbrances may be allowed provided that the amount corresponding to the mortgage over the subject landholding shall be deducted from the total value of the land to be paid by the ARBs. No. corporate farm owners cannot avail of voluntary stock distribution at present. Stock ownership is based on the capital stocks of the corporation and is equivalent to the agricultural land actually devoted to agricultural activities valued in relation to the total assets of the corporation. where the landowner opts for other modes of acquisition such as voluntary offer to sell or voluntary land transfer. Section 9 (b)].A. 2) Irrespective of the value of their equity in the corporation or association. 1 [1991]) To safeguard the rights of farmer-beneficiaries.] Voluntary stock distribution of corporate farms Voluntary stock distribution is an alternative arrangement to the physical distribution of lands wherein corporate owners voluntarily divest a portion of their capital stock. duly concurred with by the mortgagor or the lienholder. (1997) II (D). provided that such obligation shall not exceed the annual amortization otherwise due to the land pursuant to Section 26 of RA 6657. 6657 [1988]. No. 16. the landowners and the beneficiaries. The shares for the FBs are to be distributed in a span of 30 years. DAR A. field surveys. tax declaration. homelots. the notice shall be effected by publication in a newspaper of national circulation. copy of the approved survey plan of the property and prepares the claim folder of the landowner.916 hectares planted to sugarcane located in Tarlac. Likewise. there were about 6. RA 6657 are as follows: a) After having identified the land. interviews and community consultations and general knowledge of the land ownership pattern in the barangays or municipalities. Said notice shall contain the offer of the DAR to pay a corresponding value in accordance with the valuation set forth in Sections 17 and 18. DARMO sends the landowner the Notice of Coverage and Field Inspection with a copy of the Pre-OCI Report by personal delivery with proof of service or by registered mail with return card. DAR identifies the land to be covered by CARP as well as the landowners and beneficiaries thereof on the basis of a master list or inventory of landholdings prepared by the field offices pursuant to the Land Acquisition and Distribution Tracing System (LADTRACKS) and the CARP Scope Validation Project. Onethird of these shares is subject for distribution to the farmworker-beneficiaries (FBs) under the stock distribution plan. Jointly with the LBP and BARC. FBs are supposed to receive cash dividends accruing to their respective shares.00 per share. Procedure for Acquisition of Private Agricultural Lands The procedure for the acquisition of private agricultural lands as provided for in Sec. The landowner is invited to join the field investigation to select his retention area and to submit his statement of production and income. representation in the Board of Directors. [Section 9 (a) (1). The DARMO then shall post a copy of the notice of coverage and field inspection for seven working days in the bulletin board of the barangay and municipal halls where the property is located and issues Certification of Posting Compliance. No. it applied to avail of the stock distribution plan under CARP. Thereafter. Under its stock distribution plan. production based incentives.The Case of Hacienda Luisita Hacienda Luisita. the landowner shall be served a Notice of Expiration of Deferment which shall contain a reminder of his right to retention should he wish to exercise the same. the DARMO conducts preliminary ocular inspection to determine initially whether or not the property may be covered under CARP. The identification of lands is done by the DAR Municipal Office (DARMO) which gathers documents such as OCT/TCT. landowner and prospective ARBs.531. LBP and prospective beneficiaries. If the property is coverable under CARP. as the Notice of Coverage. The application was approved in November 1988. for record purposes. However.000 FBs within the farm.462 shares of stocks with a par value of P1. The DARMO shall screen/select qualified ARBs and cause the signing of the Application Purchase and Farmer's Undertaking (APFU). and other fringe benefits. If the landowner cannot be contacted or refuses to accept said Notice. At the time of application for stock distribution. by personal delivery or registered mail. Inc. In May 1988. The farm has a total of 355. DA. DENR. review of town plan and zoning ordinances.O. Thereafter. the DAR shall send its notice to acquire the land to the owners thereof. and other pertinent provisions hereof. DENR.The DARMO shall forward the claim folder to DARPO for review and completion of documents. upon expiration of the deferment period of the subject commercial farm. However. The land is . supported by the Compliance Work Program and Summary of Exceptions originally submitted with the approved deferment application. DA BARC. in the case of deferred commercial farms. the Order of Deferment previously issued over the landholding shall serve. and post the same in a conspicuous place in the municipal building and barangay hall of the place where the property is located. the process of acquisition continues. is a corporate farm owning a total of 4. Said master list in turn is obtained from the LISTASAKA statements as verified or complemented by the records of the Register of Deeds and Assessor's Offices. the DARMO shall conduct joint field investigation of the property with the LBP. a notice on the schedule of the field investigation shall be sent to the BARC. 02-1998]. the DARMO shall prepare the Field Investigation Report and the Land Use Map. the administrator of the two Haciendas. agent or any of its director of the landowner corporation. Whether the landowner be a natural or juridical person to whose address the Notice may be sent by personal delivery or registered mail. 127876. the law does not distinguish. Service must be made on a representative so integrated with the corporation as to make it a priori supposable that he will realize his responsibilities and know what he should do with any legal papers served on him. secretary. The petitioner assailed the validity of the acquisition proceedings on the ground." Summonses. Service Upon Private Domestic or Partnership. cashier. . December 17. . agent or any of its directors or partners" Similarly. Is he. among others.then surveyed. — If the defendant is a corporation organized under the laws of the Philippines or a partnership duly registered. . 1999. G. vs. Subject landholdings were acquired by the DAR and subsequently distributed to the beneficiaries. manager.] In the preliminary stage of the acquisition process. — If defendant is a corporation organized under the laws of the Philippines or a partnership duly registered service may be made on the president. . Service upon private domestic corporation or partnership. the DARPO sends the Notice of Land Valuation and Acquisition to the Landowner (DAR A. The DAR's evidence does not indicate whether the administrator's duties is so integrated with the corporation that he would immediately realize his responsibilities and know what he should do with any legal papers served on him. cashier. No. The Notice of Acquisition in Section 16 of the CARL is required to be sent to the landowner by personal delivery or registered mail. Notices and Pleadings are served on private domestic corporations or partnerships in the following manner: "Section 6. O. The claim folder is sent to the Land Bank for valuation. No.O. These persons are those through whom the private domestic corporation or partnership is capable of action.R. secretary. cashier. petitioner Roxas and Co. and bring home to the corporation notice of the filing of the action. The Supreme Court held that: . Jaime Pimentel (the administrator) is not the president. agent or any of its directors. . Rule V of the DARAB Revised Rules of Procedure. agent or any of its directors. CA. the Revised Rules of Court of the Philippines. Rule 14 provides: "Section 13. In this case. . notice to the landowner is vital to the validity of coverage and acquisition of the landholding. In the proceedings before the DAR the distinction between natural and juridical persons in the sending of notices may be found in the Revised Rules of Procedure of the DARAB. manager. At this stage. manager. considered an agent of the corporation? The purpose of all rules for the service of process on a corporation is to make it reasonably certain that the corporation will receive prompt notice in an action against it.. pleadings and notices in cases against private domestic corporation before the DARAB and the regular courts are served on the president. No. a domestic corporation owns three haciendas. cashier. service may be made on the president. in Section 13. the procedure in sending notices is important to comply with the requisites of due process especially when the owner is a juridical entity. The Supreme Court had occasion to discuss and stress the importance of these notices in the case of Roxas & Co. 1 (1998). secretary. The DAR administrative orders also do not distinguish. The administrator participated in the acquisition proceedings as representative of the owner. . manager. 02 (1996) as amended by DAR A. secretary. that it was denied due process as no notice of acquisition was ever served on it." It is submitted that the DARAB Rules and Procedure and the Rules of Court were improperly applied to the aforecited case. . Notices of acquisition informing the landowner that two of the haciendas were being compulsorily acquired were sent by the DAR and served on the administrator in his address in the hacienda. Service of pleadings before the DARAB is governed by Section 6. The rules on service of summons provided in the Rules Courtshould have not been applied since . the LBP and other interested parties to submit evidence as to the just compensation for the land. 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. 175 SCRA 343 (1989): Objection is raised. Said requirement was substantially complied with in this case considering that the administrator. No. the courts of justice will still have the right to review with finality the said determination in the exercise of what is admittedly a judicial function. The DAR and LBP are not confined in their determination of just compensation to the factors/criteria set forth in said provision. in adjudicating agrarian reform matters. 6657 are not exclusive. Section 17 does not provide hard and fast rules which must be strictly adhered to by DAR and LBP in the determination of just compensation. After the expiration of the above period. it cannot be argued that there was denial of due process. the application of the DARAB Rules of Procedure is erroneous. the matter is deemed submitted for decision. for Section 16(f) clearly provides: Any party who disagrees with the decision may bring the matter to the court of proper jurisdiction for final determination of just compensation.what is involved in this case is acquisition proceedings which is administrative in nature. Inc. the landowner. Otherwise. Moreover. which provides that in case of the rejection or disregard by the owner of the offer of the government to buy his land. b) Within thirty (30) days from the date of receipt of written notice by personal delivery or registered mail. (Sec. his administrator or representative shall inform the DAR of his acceptance or rejection of the offer. While said section provides that the factors/criteria mentioned therein" shall be considered" it does not expressly state that only these factors/criteria and no other shall be considered. c) If the landowner accepts the offer of the DAR. . What is important in administrative adjudication is the right to be heard. But more importantly. To be sure." .A. Although the proceedings are described as summary. The DAR shall decide the case within thirty (30) days after it is submitted for decision. Therefore. The factors/criteria set forth in Sections 17. however. 201 SCRA 538 (1991).A. to the manner of fixing the just compensation. The determination made by the DAR is only preliminary unless accepted by all parties concerned. 6657). . R. Finally. .. The constitutionality of the aforementioned provision was upheld by the Supreme Court in the case of Association of Small Land Owners in the Philippines. is not bound by technical rules of procedure. Notably. the DAR shall conduct summary administrative proceedings to determine the compensation for the land requiring the landowner. 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. Estrella. Specific reference is made to Section 16(d). Secretary of Agrarian Reform. vs. This is so since the matter of service of notice of acquisition does not fall within the jurisdiction of the DARAB. d) In case of rejection or failure to reply. participated in the acquisition proceedings. 50. the landowner and other interested parties are nevertheless allowed an opportunity to submit evidence on the real value of the property. 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. it must be emphasized that the DAR. . which it is claimed is entrusted to the administrative authorities in violation of judicial prerogatives. . 18 and other pertinent provisions for Said ruling was reiterated in the case of Vinzons-Magana vs. who takes charge of the daily operations of the subject properties. within fifteen (15) days from the receipt of the notice. The factors to be considered in the determination of just compensation as enumerated in Section 17 of R. the Land Bank of the Philippines (LBP) shall pay the landowner the purchase price of the land within thirty (30) days after he executes and delivers a deed of transfer in favor of the government and surrenders the Certificate of Title and other muniments of title. the Court ruled that once the Land Bank agreed to the valuation. No. title remains with the landowner. 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. is indispensable and that the only time the petitioner becomes legally bound to finance the transaction is when the farmer-beneficiary approves the appraised value of the land. 6657. The CARP Law conditions the transfer of possession and ownership of the land to the government on the receipt by the landowner of the corresponding payment or the deposit by the DAR of the compensation in cash or LBP bonds with an accessible bank. . the DAR. CA and Pascual. 18. The Court. In the case of LBP vs. . R. or as may be finally determined by the court as just compensation for the land. brushing aside petitioner's contention. Secretary of Agrarian Reform). petitioner participated in the valuation proceedings held in the Office of the PARAD through its counsel . Petitioner refused to pay the value of the land as determined by the PARAD arguing among others that since it merely guarantees or finances the payment of the value of the land. the DAR and the Land Bank are the only parties involved. in case of rejection or no response from the landowner. stated: Sec. Section 18 of R. December 29. the PARO issued a valuation of the land which was rejected by the private respondent who filed a case before the PARAD seeking to annul the PARO's valuation. No. . The PARAD. In other words. the farmer-beneficiary's consent.) It must be noted. Furthermore. the landowner. 109 (1991). the ultimate consideration being that the compensation be the full and fair equivalent of the property taken from its owner by the expropriator.A. the Land Bank and the farmer-beneficiary must all agree to the value of the land as determined by them. consent of the farmer-beneficiary is not needed.that matter should be deemed as mere standards to guide the proper officials in the determining just compensation. 1999. O. . e) Upon receipt by the landowner of the corresponding payment or. No. it is its duty to pay the landowner said amount. came up with its own valuation. 128557. 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.A. [DOJ Opinion No. They averred that the "earmarking. In the instant case. Once the Land Bank agrees with the appraisal of the DAR. July 25. the Supreme Court ruled that in the determination of just compensation pursuant to Section 18 of R. The law does not mention the participation of the farmer beneficiary. 1991). The DAR shall thereafter proceed with the redistribution of the land to the qualified beneficiaries. — The LBP shall compensate the landowner in such amount as may be agreed upon by the landowner and the DAR and the LBP in accordance with the criteria provided for in Sections 16 and 17 and other pertinent provisions hereof. No outright change of ownership is contemplated either. which bears the approval of the landowner. In this case. private respondent's properties were subjected to Operation Land Transfer. . it becomes its legal duty to finance the transaction. 6657. but in no case shall control or limit such determination. (Association of Small Land Owners in the Philippines vs. G. petitioner asserts that the landowner. Valuation and Mode of Compensation. however. and directed the petitioner LBP to pay private respondent said amount. ruled in favor of private respondent. A. A perusal of the law however shows that the consent of the farmer-beneficiary is not required in establishing the vinculum juris for the proper compensation of the landowner. CA [248 SCRA 149 (1995)] respondent landowners assailed the acquisition of their properties on the ground that there was a taking without just compensation. 175 SCRA 343 (1989. ." "reservation" and "deposit in trust" made by the DAR and the Land Bank pursuant to DAR A. No. Consequently. Until then. 6657 states — As may be gleaned from the aforementioned section.] In the case of Land Bank of the Philippines vs. that the opening of a trust account and issuance of a certification from Land Bank that a certain sum has been earmarked for the landowner does not constitute substantial compliance with Section 16(e) of R. 2-98. . Series of 1996 entitled "Revised Rules Governing the Acquisition of Agricultural Lands Subject of Voluntary Offer to Sell (VOS) and Compulsory Acquisition (CA) Pursuant to R. A.. or at least. upheld the validity of deposit per se as payment of just compensation. the Court in making such pronouncement. i. • DAR A. No. It did not. Series of 1994 was issued outlining the procedures on the reconstitution of lost or destroyed titles. Intermediate Appellate Court. O. qualifying words ought to have appeared from which it can be fairly deduced that a "trust account" is allowed. 09-1990 is not equivalent to just compensation under R. ruling as follows: . Valuation. • DAR A. DAR Memorandum Circular No. Reconstitution of Lost or Damaged Title A pressing operational problem besetting agrarian reform implementors is the delay in the acquisition and distribution of agricultural lands with lost or destroyed titles. 157 . [175 SCRA 343 (1989)].No. No. It is very explicit from Section 16 (e) that the deposit must be made only in "cash" or in "LBP bonds. Series of 1990 entitled "Policy Guidelines and Operating Procedures in the Identification and Acquisition of Idle and Abandoned Lands". No. If it were the intention to include a "trust account" among the valid modes of deposit. the deposit in trust and not the deposit per se as payment to the landowners for the expropriated lands. there is no ambiguity in Section 16 (e) of R. in effect." Nowhere does it appear nor can it be inferred that the deposit can be made in any other form. f) Any party who disagrees with the decision may bring the matter to the court of proper jurisdiction for final determination. after proper proceedings. No. A. No. .A.e. No. 6657 to warrant an expanded construction of the term "deposit. 6657 thereby allowing a deviation from the traditional mode of payment other than in cash. Dulay 198 SCRA 12 [1990]) There are two types of reconstitution of titles: judicial and administrative. . . O.O. however. O. that should have been made express. • DAR A. A. Series of 1998 entitled "Rules and Regulations on the Acquisition. 08. Thus. The ruling in the Association of Small Landowners case [that payment of the just compensation is not always required to made fully in money] merely recognized the extraordinary nature of the expropriation to be undertaken under R. The Court nullified DAR A. 6657. Judicial reconstitution partakes of a land registration proceeding and is perforce a proceeding in rem. . (Republic vs. No. Compensation and Distribution of Deferred Commercial Farms". . O. 05. The purpose of the reconstitution of title or any document is to have the same reproduced. • DAR A. . O. In the case of Association of Small Landowners. In sum. No." . . 09-1990. 12. in the same form they were when the loss or destruction occurred. . 2. To address this concern. What the Supreme Court nullified was merely the form in which the deposit was made. The operating procedures for the acquisition of private agricultural lands are outlined in the following administrative issuances: . the Supreme Court explained that the determination of just compensation is a function addressed to the courts of justice. 09. (Heirs of Pedro Pinote vs. Series of 1997 entitled "Revised Rules on the Acquisition and Distribution of Compensable Agricultural Lands Under VLT/DPS". dispense with the settled rule that there must be full payment of just compensation before title to the expropriated property is transferred. 6657" as amended by DAR A. No. Reconstitution of a certificate of title denotes restoration of the instrument which is supposed to have been lost or destroyed in its original form and condition. SCRA 62 [1988]). the Supreme Court further explained the meaning of "just compensation". The word "just" is used to intensify the meaning of the word "compensation" to convey the idea that the equivalent to be rendered for the property to be taken shall be real. 35 dated 13 June 1983 and DAR Memorandum Circular No. As a general rule. UnderDAR Memorandum Circular No. ample. Inc. R. 149 SCRA 305 [1987]). Secretary of Agrarian Reform. supra. No. It means a fair and full equivalent for the loss sustained. All these are envisioned in the measures before us (at 378. CHAPTER 4 Just Compensation Definition Just compensation means the equivalent for the value of the property at the time of its taking. 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. full. flood or other force majeure where the number of certificates lost or damaged is at least ten (10) percent of the total number of titles in the custody of the Register of Deeds but in no case shall the number of titles lost or damaged be less than five hundred (500) as determined by the Administrator of the Land Registration Authority. (Export Processing Zone Authority vs. However. All the facts as to the condition of the property and its surroundings. No. Series of 1994.A. (T)he content and manner of the just compensation provided for in the afore-quoted Section 18 of the CARP Law is not violative of the Constitution. It said: Just compensation is defined as the full and fair equivalent of the property taken from its owner by the expropriator. . 379). In the case of Association of Small Landowners in the Philippines. 26. We are aware that invalidation of the said section will result in the nullification of the entire program. Detailed discussion of the procedures for the filing of petition for reconstitution are provided for in R. there is compensable taking when the following conditions concur: (1) the expropriator must enter a private property. administrative reconstitution of lost or destroyed original copies of certificates of title may be availed of in case of substantial loss or destruction of land titles due to fire.A. That is not in our view the intention of the Constitution. R. Castellvi. the remedy for the reconstitution of lost or destroyed original copies of certificates of titles in the offices of the Register of Deeds is the filing of a petition for judicial reconstitution of title. killing the farmer's hopes even as they approach realization and resurrecting the spectre of discontent and dissent in the restless countryside. 26 as amended. Dulay. Judicial reconstitution is governed byRepublic Act No. as amended by Republic Act No. (3) the entry must be under warrant or color of authority. It has been repeatedly stressed by this Court that the measure is not the taker's gain but the owner's loss. substantial. 6732 as implemented by LRA Circular dated 26 July 1989. its improvements and capabilities should be considered. As held in Republic of the Philippines v. We do not mind admitting that a certain degree of pragmatism has influenced our decision on this issue. Administrative reconstitution of title is likewise governed by Republic Act No. (2) the entry must be for more than a momentary period. 6732. 05. 26 in relation to Section 110 of P.A. 1529. (Section 1. through the duly authorized DAR lawyer. D. vs. 6732 [1989]). the Department of Agrarian Reform (DAR). No. LRA Circular No. but after all this Court is not a cloistered institution removed from the realities and demands of society or oblivious to the need for its enhancement. The Court is as acutely anxious as the rest of our people to see the goal of agrarian reform achieved at last after the frustrations and deprivations of our peasant masses during all these disappointing decades. and that is not what we shall decree today" (at 388). may file a petition for administrative or judicial reconstitution when the notice of coverage over landholdings whose titles were lost or destroyed has already been issued. No. (4) the property must be devoted to public use or otherwise informally appropriated or injuriously affected. 5 (1994). The factors/criteria set forth in Section 17." The above formula is used if all the three (3) factors are present. 109 (1991)). but should in no case control or limit such determination. sworn valuation by the landowner. 5 [1998]). . and applicable (DAR Admin. it does not expressly state that only these factors/criteria. and Notably. Valuation or Computation General formula The basic formula for the valuation of lands covered by Voluntary Offer to Sell and Compulsory Acquisition is: LV = (CNI x 0. current value of like properties. tax declaration. actual use. social and economic benefits contributed by farmers and farmworkers and by the government. the ultimate consideration being that the compensation be the "full and fair equivalent of the property taken from its owner by the expropriator". the resulting figure in the equation is always multiplied to the number of area or hectarage of land valued for just compensation. shall be considered.1) Where : LV = Land Value CNI = Capitalized Net Income CS = Comparable Sales MV = Market Value per Tax Declaration .Determination of Just Compensation Under Sec. In any case. while Section 17 provides that the factors/criteria mentioned therein "shall be considered" in determining just compensation. . (DOJ Opinion No. non-payment of taxes or loans secured from government financing institutions on land. and no others. assessment by government assessors. h) The provisions of RA 6657 on just compensation do not provide hard-and-fast rules which must be strictly adhered to by DAR and the LBP in determining just compensation. 17 of RA 6657. .6) + (CS x 0. nature of land.3) + (MV x 0. should be deemed as mere standards to guide the proper officials in determining just compensation. what should control is the "just-ness" of the proposal taking into account the "revolutionary" nature of the expropriation under the CARL. No. To illustrate the formula wherein all of the factors above mentioned are present: Area : 3 hectares Capitalized Net Income : P24. and in Section 18 and other pertinent provisions for that matter. In every case. income. . relevant.900 . O. the factors considered in the determination of just compensation are: a) c) b) d) e) f) g) i) j) cost of acquisition. . No. O. DAR and LBP should secure the said data from concerned agency/ies or.500) + (1.000 x 0.1) = (14. . in the absence thereof.6) + (5.900 x 0. should establish the same.1) [if the capitalized net income is unavailable] LV = MV x 2 [if only the market value factor is available] In case the comparable sales factor (CS) is relevant or applicable. No. the land value can be computed as: LV = (MV x 2) + CDC Where: a) In case the CDC data provided by the landowner could not be verified.000 LV = (CNI x 0.1) [if the comparable sales factor is missing] LV = (CS x 0.000 x 0. the value of idle land using the formula MV x 2 should not exceed the lowest value of land within the same estate under consideration or within the same barangay or municipality (in that order) approved by LBP within one (1) year from receipt of claimfolder (DAR Admin. the land value is computed in accordance with the general formula where MV is based on the lowest productivity classification of the land.9 ) + (MV x 0. In equation form.000 Comparable Sales : P 5. Lands with permanent but not yet productive crops introduced by farmer-beneficiaries b) The cumulative development cost (CDC) is grossed-up from the date of FI up to the date of LBP Claim Folder (CF) receipt for processing but in no case should the grossed-up CDC exceed the current CDC data based on industry.9) + (MV x 0. However. the computation of land value will be any of the three (3) computations or formulae: The land value is : LV = (24. The market value (MV) to be used is the applicable unit market value (UMV) classification of idle land. O. Computation of land value under certain conditions Valuation of lands planted to permanent but not yet fruit-bearing crops There are times when the land being valued is planted to permanent crops which are not yet productive or not yet fruit-bearing at the time of the Field Investigation (FI) of the land. 5 [1998]). In every case.Whenever one of the factors in the general formula is not available. 5 [1998]).940) + (1.3) + (10.320 Computation of land value Market Value : P10. the resulting land value should not exceed the value of productive land similar in terms of crop and plant density within the estate under consideration or within the same barangay or municipality (in that order) approved by LBP within one (1) year from receipt of CF (DAR Admin.000) = (17. The land value is equivalent to the value of the land plus the cumulative development cost (CDC) of the crop from land preparation up to the time of FI.440) x (3 hectares) = P 52. and ready for final computation/processing. the computation considers the applicable UMV classification of idle land plus the salvage value of the standing trees at the time of the FI. SP = (selling prices) The average of the latest available 12-months' selling prices prior to the date of receipt of the CF by LBP for processing. The date of receipt of CF by LBP from DAR means the date when the CF is determined by the LBPLVLCO to be complete with all the required documents and valuation inputs duly verified and validated. in their absence. the land value is computed in accordance with the general formula where MV is based on the applicable classification of the land (DAR Admin. such prices to be secured from the Department of Agriculture (DA) and other appropriate regulatory bodies or. the resulting land value should not exceed the value of productive land similar in terms of crop and plant density within the estate under consideration or within the same barangay or municipality (in that order) approved by LBP within one (1) year from receipt of CF. In case where CS is relevant or applicable.12 LV = (MV x 2) + Salvage Value LV = MV x 2 Where: CNI = Capitalized Net Income AGP = Annual Gross Production corresponding to the latest available 12-months' gross production immediately preceding the date of FI. In equation form: In any case. O. No. 5 [1998]). the land valuation formula used is the same as if only the MV is available provided the MV used is the applicable UMV classification of idle land. Factors of Land Value Computation of Capitalized Net Income Capitalized Net Income refers to the difference between the product of the gross sales and selling prices (AGP x SP) and total cost of operations (CO) capitalized at 12%. Use of Salvage Value on valuation of lands planted to permanent but no longer productive or ready for cutting crops When lands being valued are planted to permanent but no longer productive or the crops are ready for cutting.When the permanent but not yet fruit-bearing crops are introduced by the farmer-beneficiaries. the land value is computed in accordance with the general formula where MV is based on the lowest productivity classification of the land (DAR Admin. 5 [1998]). In equation form: But the resulting land value should not exceed the value of productive land similar in terms of crop and plant density within the estate under consideration or within the same barangay or municipality (in that order) approved by LBP within one (1) year from receipt of CF. from the Bureau of Agricultural Statistics. The landowner's offer is grossed up from the date of the offer up to the date of receipt of CF by LBP from DAR for processing. And in case the CS is relevant or applicable. No.CO CNI = ——————————— 0. the computed value using the applicable formula should not exceed the landowner's offer. Expressed in equation form: (AGP x SP) . Land value under Voluntary Offer to Sell In VOS. O. If . .33 kg.33 kg. In all cases. = 633.56/hectare Comparable sales refers to any one or the average of all the applicable sub-factors. O.5 nuts/kg. the combination of STs sourced from the barangay. In the absence thereof.74/kg. Whenever the cost of operations could not be obtained or verified. c) The comparable sales transactions should have been executed within the period 1 January 1985 to 15 June 988. SP data is gathered from the barangay or municipality where the property is located. municipality and province should not exceed three transactions. i. x 6. Landholdings planted to coconut which are productive at the time of FI will continue to use the assumed NIR of 70%. x 30 nuts/tree 4. . an assumed net income rate (NIR) of 20% is used. b) The land subject of acquisition as well as those subject of comparable sales transactions should be similar in topography. planted to the same crop. the most recent transactions shall be considered. selling prices may be secured within the province or region.e. additional STs may be secured from the municipality where the land being offered/covered is situated to complete the required three comparable STs. x 70% NIR for coconut land —————————————————————— 12 % Comparable Sales = P24.74/kg.12 = Capitalization Rate CO = Cost of Operations To illustrate the computation of capitalized net income: Number of coconut trees : 95 trees/hectare Selling Prices : P6. d) STs are grossed up from the date of registration up to the date of receipt of CF by LBP from DAR for processing. 5 [1998]) 0. namely sales transactions (ST). DAR and LBP will continue to conduct joint industry studies to establish the applicable NIR for each crop covered under CARP. In case there are more STs available than what is required at the municipal level. the subject properties should be more or less comparable in terms of their stages of productivity and plant density. (DAR Admin. in case of permanent crops. No. Furthermore.900. The same rule applies at the provincial level when no STs are available at the municipal level. land use. CNI = 633. acquisition cost (AC) and market value based on mortgage (MVM): The criteria in the selection of the comparable sales transaction (ST) shall be as follows: Where: ST = (Peso Value of Sales Transactions) a) When the required number of STs is not available at the barangay level. Hence: AGP = 95 trees/ha. and registered within the period 1 January 1985 to 13 September 1988.possible. Act No. Formula in Grossing-Up of Valuation Inputs The basic formula in the grossing-up of valuation inputs such as LO's Offer. 5 [1998]). and (DAR Admin. For MVM to be relevant or applicable. Expressed in equation form: Most Recent RCPI for the Month as of the Date of Receipt of CF by LBP from DAR RCPI Adjustment Factor = ————————————————— RCPI for the Month Issued as of the Date/ Effectivity/Registration of the Valuation Input Valuation of deferred commercial farms The formulae provided under DAR AO 5 (1998) are used in the computation of valuation for deferred commercial farms (DAR Adm. No. O. Market Value MV or Market Value per Tax Declaration is the latest Tax Declaration (TD) and Schedule of Unit Market Value (SUMV) issued prior to receipt of CF by LBP. MVM or Market Value Based on Mortgage. sec. Market Value Based on Mortgage (MVM) and Market Value per Tax Declaration (MV) is: Grossed-up Valuation Input = Valuation Input x Regional Consumer Price Index (RCPI) Adjustment Factor The various valuation inputs are multiplied with the RCPI Adjustment Factor. No. O. 17 in relation to DAR Adm. O. No. 5 [1998]) factors for the determination of just compensation. The RCPI Adjustment Factor refers to the ratio of the most recent available RCPI for the month issued by the National Statistics Office as of the date when the CF was received by LBP from DAR for processing and the RCPI for the month as of the date/effectivity/registration of the valuation input. The Unit Market Value (UMV) is grossed-up from the date of its effectivity up to the date of receipt of CF by LBP from DAR processing. 5 [1998]) . the property subject of acquisition should have been mortgaged as of 15 June 1988 and the condition of the property is still substantially similar up to the date of FI. Acquisition Cost (AC). 9 [1998]). Sales Transaction (ST).AC or Acquisition Cost is deemed relevant when the property subject of acquisition was acquired through purchase or exchange with another property within the period 1 January 1985 to 15 June 1988 and registered within the period 1 January 1985 to 13 September 1988. and the condition of said property is still substantially similar from the date of purchase or exchange to the date of FI. MVM refers to the latest available appraised value of the property (DAR Admin. No. Valuation of lands of corporate farms Agricultural lands owned by corporate farms are valued by considering the following factors: a) b) factors needed to stimulate the growth of cooperatives and participation of worker-beneficiaries (Rep. O. AC is grossed up from the date of registration of the deed of sale/exchange up to the date of receipt of CF by LBP from DAR for processing. 6657 [1988]. the age and productivity of the trees change). are those areas actually affected by the lahar and pyroclastic deposits. lands under Category III shall be acquired and landowners shall be compensated. a) Claims have been approved by the LBP and: The general rule is. Compensation for Mt. Act No. measures the net income or productivity of the land based on the farm produce (in their raw forms) and not on the entire agri-business income enhanced by the added value of farm products due to processing. [1999]). are those areas not yet affected but have the possibility of being actually affected. This method reduces the cost of production for sugar planters. 3. 8. eroded or continuously flooded for an indefinite period of time. 1199 [1954]. including those areas which have become silted. The method of ratooning affects land valuation of the property. [g-2]). sec. par. the recognized income of rubber plantations is based on processed crumb rubber. Ratooning is the cutting of the straw close to the ground at harvesting time after all the standing water has been drained out to allow the young tillers to sprout out of the rootstocks and develop into mature normal bearing plants in three or four months with the aid of fertilizer. or . the growing market for old rubber trees which was not considered in the old LVG is now considered. 5. the computation of the land value is adjusted. Hence. the effects of ratooning are considered. Furthermore. to wit: Under the Category I. Pinatubo areas Under Joint DAR-LBP AO 3 (1994). Circ. Under the Category III. Series of 1994. It appropriately determines the Capitalized Net Income of rubber plantations based on the actual yield and farm gate prices of raw products (field latex and cuplump) and the corresponding cost of production. Due to the time gap between the original date of FI and the date of DARAB's order to recompute the property (during which period. The applicable guideline in the valuation of lands planted to sugarcane is the Joint DAR-LBP MC 15 (1999). Majority of sugar planters practice at least up to two (2) ratoons. There are rubber claims pending with the Department of Agrarian Reform Adjudication Board (DARAB) for reasons such as landowner's rejection of the valuation but the plantation remains under the management of the landowner. Under the Category II. No. agricultural lands affected by the Mt. Under the old rubber land valuation guideline or the Land Valuation Guidelines No. Valuation of rubber plantations Valuation of rubber plantations are governed by Joint DAR-LBP MC 7 and 8 (1999).Valuation of lands planted to sugarcane There is a different computation for valuation of lands planted to sugarcane because of the so-called "ratooning". Warranty and Undertaking on or before the issuance of the Joint DAR-LBP Administrative Order No. 6 (1990). manure or compost (Rep. are those areas actually covered or affected by ashfall but which remain productive. Pinatubo eruptions have been classified into three categories based on the NEDA Region III Geographic Information System Database. There are also other several situations which are considered in the computation of just compensation for rubber plantations. Under one of the latest guidelines. While compensation of lands under Categories I and II shall be effected under the following conditions: • Landowner has executed a Deed of Assignment. the valuation should be made on the basis of the age and productivity of the trees at the time of recomputation (Joint DAR-LBP Memo. In the valuation of lands planted to sugar. the standard income approach to valuation. The DAR makes use of the determination of the land valuation and compensation by the LBP. But in the recent case of Land Bank of the Phils. 128557. the Supreme Court declared that it was an error for the Secretary of Agrarian Reform to issue DAR MC 1 (1995) directing the DARAB to refrain from hearing valuation cases involving PD 27 lands. RARAD's. The landowner has the right to question such preliminary determination of the Adjudication Board before the Special Agrarian Courts. 1). Order No. Order. in the performance of its functions (Exec. No. vs. 8 [1993]). c) b) Sec. 47 of RA 6657 on BARC's assistance in the initial a) Sec. . 1994 Revised Rule of the DARAB although such valuation may only be considered preliminary as the final determination of just compensation is vested in the courts. G. 12 of PD 946 [1976]).• Transfer Certificate of Title was already registered in the name of RP on or before the issuance of the same administrative order. . program implementation and evaluation shall be institutionalized . Public participation There are several provisions of laws which encourage public participation in the determination of land valuation. 18 of RA 6657 provides: The LBP shall compensate the landowners in such amount as may be agreed upon by the landowner and the DAR determination of the value of the land. partnership between government and organization of farmers and farmworkers in agrarian reform policy formulation. and the LBP . . or before the Regional Agrarian Reform Adjudicator if the government's offer is more than two (2) million pesos but does not exceed five (5) million pesos. • Partial payment was already effected. 3 of EO 129-A states: Preliminary determination of just compensation cases The summary administrative proceeding is conducted before the Provincial Agrarian Reform Adjudicator if the compensation offered does not exceed two (2) million pesos. DAR AO 14 (1990) emphasizes Sec. or b) Emancipation Patents/Certificates of Land Ownership Award have been registered on or before 12 June 1991 regardless of whether or not the claimfolder is with the LBP. sec. It is the DARAB which has the authority to determine the initial valuation of lands involving agrarian reform pursuant to Sec 1 (b).R. namely: . Rule II. . 29 December 1999. The PARAD's. . valuation cases involving PD 27 lands are cognizable only by the Secretary of DAR (reiterating Sec. . . Under DAR MC 1 (1995). or before the Department of Agrarian reform Adjudication Board if the offer is more than five (5) million pesos (DAR Adm. No. CA. or DARAB's summary administrative proceeding is merely a preliminary determination of the just compensation due to the landowner. 405 [1990]. Summary Administrative Proceedings Land Bank of the Philippines The Land Bank of the Philippines is primarily responsible for the determination of the land valuation and compensation for all private lands suitable for agriculture under either the voluntary offer to sell or compulsory acquisition arrangement as governed by RA 6657. No. Petitioner could file its petition with the RTC beyond the 15-day period of appeal from the decision of the DAR Adjudicator. exclusive jurisdiction over: 1) "all petitions for the determination of just compensation to land-owners. Section These Regional Trial Courts qua Special Agrarian Courts have. CA. It only means that. petitioner Bank argued that the DAR Adjudicators have no jurisdiction to determine just compensation for the taking of lands under CARP because such jurisdiction is vested in Regional Trial Courts designated as Special Agrarian Courts. Court of Appeals. on the other hand. The jurisdiction of the Regional Trial Courts is not any less "original and exclusive" because the question is first passed upon by the DAR. according to Section 57 of the same law. because of Rule XIII. vs. Secretary of Agrarian Reform. . original and "the prosecution of all criminal offenses under . Otherwise. 175 SCRA 345 [1989]. de Tangub vs." and 2) allowed an opportunity to submit evidence on the real value of the property. such decision may bring the matter to the court of proper jurisdiction for final determination of just compensation" Magana vs. 382). the law may provide that the decision of the DAR is final and unappealable. The RTC dismissed the petition of Petitioner for being filed beyond the 15-day period for appeal. But more importantly. as earlier stated is by no means final and conclusive upon the Although the proceedings are described as summary. No. land valuation shall be based on the Average Gross Production (AGP) as determined by the Barangay Committee on Land Production (BCLP). courts cannot be foreclosed on the theory that courts are the guarantors of the legality of administrative action. . 132767. 18 January 2000. at p."The determination made by the DAR is only preliminary unless accepted by all parties concerned. It is error to think that. in accordance with settled principles of administrative law. Hence. supra. as the judicial proceedings are not a continuation of the administrative determination. 191 SCRA 885 (1990) determination of just compensation by the DAR. which are Regional Trial Courts designated by the Supreme Court — at least one (1) branch within each province — to act as such.5 x P 35 * Corn Lands LV = AGP x 2. Court of Appeals. The formula is: Rice Lands LV = AGP x 2. Valuation of PD 27 Lands For the matter. (the) Act (at 890). G. The Regional Trial Courts have not been completely divested of jurisdiction over agrarian reform matters. Vda. The Supreme Court reiterated its ruling in Republic vs. 6657 is vested in the courts. resort to Under Sec. Inc. 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" (Association of Small Landowners in the Philippines. Nevertheless. 201 SCRA 536 (1991). 2 of EO 228. but such determination is subject to challenge in the courts.R. confers "special jurisdiction" on "Special Agrarian Courts". . S 11. this rule is an acknowledgment by the DARAB that the power to decide just compensation cases for the taking of lands under R.A. the original and exclusive jurisdiction given to the courts to decide petitions for determination of just compensation has already been transformed into an appellate jurisdiction. primary jurisdiction is vested in the DAR as an administrative agency to determine in a preliminary manner the reasonable compensation to be paid for the lands taken under the Comprehensive Agrarian Reform Program. and said: . the landowner and other interested parties are nevertheless landowner or any other interested party for Section 16 (f) clearly provides: "Any party who disagrees with the In Phil. . Veterans Bank vs. 56 of RA 6657.5 x P 31** . Estrella. It seems the grant of increment cannot be applied after this effectivity date even if the actual payment can be had after 27 October 1994. Secretary of Agrarian Reform. supra). the said grant of increment is reckoned from the effectivity date of PD 27 or date when the land was actually tenanted up to the effectivity date of DAR AO 13 (1994) or up to 27 October 1994 only.* Lease rentals paid to the landowner by the farmer-beneficiary after 21 October 1972 shall be considered as advance payment for the land. Payment in kind is justified in the case ofAssociation of Small Landowners of the Philippines. Inc. . In LBP vs. Republic vs. 22 SCRA 477.D. DAR Administrative Order No. has just compensation been paid in the past solely in that medium. 23168. 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. Pastoral. 175 SCRA 343 (1989) as follows: It cannot be denied from these cases that the traditional medium for the payment of just compensation is money and no other. 1972 government support price for one cavan of 50 kilos of palay on October 21. According to the above mentioned administrative issuance. Angas. 1972 or thereafter and Operation Land Transfer (OLT) covered. Those who opted for government financing thru LBP as the mode of compensation. CA.O. CA. No. 1972 The factor of government support price provided under EO 228 does not undervalue PD 27lands. Ortula vs.R. In the case of Benosa vs. Commissioner of Public Highways vs. However. and For those who were partially paid. the yearly increment of 6% compounded annually shall only be applied to the unpaid balance. ** government support price for one cavan of 50 kilos of corn on October 21. CA-G. 27 November 1995. 208 SCRA 542. 27 and E. Delente. No. 13. supra.06)n where : n = number of years from date of tenancy up to effectivity date The landowners qualified to receive the compensation based on the increment formula are: b) c) a) Those whose lands are actually tenanted as of October 21. 228. 122231. No. 36) Mode of Compensation Landowners may be paid in cash or in kind. an increment of 6% yearly interest compounded annually on lands covered by PD 27 and EO 228 is granted. squarely recognizes the above rule and thus applies to the private respondents. And so. vs. conformably. supra. The formula is: (Computed land value using the original formula) x (1. p. Under DAR AO 13 (1994). G. Those who have not yet been paid for the value of the land. on the issue of granting interest to the landowner. No. Rollo. it was held: It is settled that the landowners are entitled to legal interest on the amount payable from the time the property was taken until full payment is made (National Power Corporation vs. the Supreme Court decided not to apply the 6% increment to the valuation because the Court of Appeals affirmed the PARAD's use of the 1992 Gross Selling Price in the valuation of the private respondent's land (following the ruling in the Court of Appeals case of Galeon vs.R. we do not deal here with the traditional exercise of the power of eminent domain. Burgos. series of 1994 which grants increment of 6% yearly interest compounded annually on lands covered by P. What we deal with here is a revolutionary kind of expropriation. Republic. . is not unduly oppressive upon the landowner. LBP bonds Features of LBP bonds The new ten (10)-year LBP bonds have attractive features which are more acceptable and marketable than the other investment instruments. . As provided under Sec. other properties or assets. from the impoverished farmer to the land-glutted owner. tax credits. which are likewise available to the landowner at his option.The expropriation before us affects all private agricultural lands wherever found and of whatever kind as long as they are in excess of the maximum retention limits allowed their owners. are also not unreasonable because payment is made in shares of stock. these features are: 2) 3) One-tenth of the bond's face value matures every year from date of issue up to the tenth year. as determined on the basis of the areas of the lands expropriated. LBP preferred shares. . who can afford a bigger balance in bonds and other things of value. LBP bonds. Jurisprudence on this settled principle is consistent both here and in other democratic jurisdictions" (at 386. payable twice a year — six months from date of issue and every six months thereafter. net of applicable final withholding tax. the cash portion is increased by 5%. The recognized rule indeed. Accepting the theory that payment of the just compensation is not always required to be made fully in money. the government financial instruments making up the balance of the payment are "negotiable at any time". 388 and 389). is that title to the property expropriated shall pass from the owner to the expropriator only upon full payment of the just compensation. physical assets or other qualified investments. from all levels of our society. No less importantly. primarily because the small landowner will be needing it more than the big landowners. 18 of RA 6657. insofar as the excess hectarage is concerned = 25% cash above 24 hectares and up to 50 hectares = 30% cash For voluntary offer to sell. or 24 hectares and below = 35% cash a) Shares of stock in government owned or controlled corporation. Its purpose does not cover only the whole territory of this country but goes beyond in time to the foreseeable future. Generations yet to come are as involved in this program as we are today. the bigger the payment in money. . 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. 18 of RA 6657. The bond is fully guaranteed by the national government. Payment in kind Landowners may be paid with: b) c) Tax credits. . 1) Its market interest rates are aligned with 91-day treasury bill rates. Cash Payment Under Sec. The other modes. It is noted that the smaller the land. the proportion of payment in cash. dependent on the area/hectarage of the land valued is subject to the following: a) c) b) above 50 hectares. and other things of value equivalent to the amount of just compensation. we find further that the proportion of cash payment to the other things of value constituting the total payment. which it hopes to secure and edify with the vision and the sacrifice of the present generation of Filipinos. The landowners shall be paid in any of the following modes. Provided. trade schools. Payment for fees of the immediate family of the original bondholder in government hospitals. c) Substitution for surety or bail bonds for the provisional release of accused persons. 107 SCRA 492 (1981). fully tax-exempt both as to principal and income. it can be split according to amounts desired by the bondholder. in the same province or region as the land for which the bonds are paid. or performance bonds. up to the amount of their face value. provided the proceeds of the loans shall be invested in an economic enterprise. further. e) Payment for various taxes and fees to government. particularly. b) Acquisition of shares of stock of government-owned or controlled corporations or shares of stock owned by the government in private corporations. sec. GSIS. and any impairment thereof may take any encroachment in any respect upon the obligation and cannot be permitted.4) The bond is non-denominated. They are issued not in the open market nor for the captive market of landowners and to facilitate the speedy transfer of lands to the tenant-farmers in support of the land reform program of the Government. Petitioner filed a petition for mandamus to compel the respondent Government Service Insurance System (GSIS) to accept 6% interest-bearing bonds issued by the Land Bank of the Philippines at their par or face value as payment for petitioners' outstanding housing loan. Thus. preferably in a small-and medium-scale industry. That the PARC shall determine the percentage mentioned above. his successors in interest or his assigns. d) Security for loans with any government financial institution. which in no case shall exceed 25 years. colleges. The Court ruled: Mode of Payment for PD 27 Landowners Land Bank bonds are certificates of indebtedness. They are fully negotiable and unconditionally guaranteed by the Government of the Republic of the Philippines. and The 100% face value and negotiability of LBP bonds are well described in the case ofGonzales vs. They are not ordinary commercial paper in that sense subject to discounting (at 498. 228 [1987]. and bear interest at the rate of 6% per annum redeemable at the option of the Land Bank at or before maturity. and other institutions. These bonds are deemed contracts and the obligations resulting therefrom fall within the purview of the nonimpairment clause of the Constitution. at their option (Exec. 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. Upon request. 3): . approved by the Monetary Board of the Central Bank. Order No. the value of these bonds cannot be diminished by any direct or indirect act. for any of the following: a) Acquisition of land or other real properties of the government. 499 and 502). The act of the GSIS in discounting the LBP bonds was found invalid. Such LBP bonds may be used by the landowner. g) h) Such other uses as the PARC may from time to time allow. since said bonds are fully guaranteed by the Government of the Republic of the Philippines. f) Payment for tuition fees of the immediate family of the original bondholder in government universities. 5) The bonds are highly transferable and negotiable. 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. They are the following: (a) (c) (b) (d) (e) (f) (g) Children of landowners. Actual tillers or occupants of public lands. Section 22 also provides that "[t]he lands covered by the CARP shall be distributed as much as possible to landless residents of the same barangay. Regular farmworkers. and Others directly working on the land. One-tenth of the face value of the bonds shall mature every year from the date of issuance until the tenth year. landless residents of the same municipality". CHAPTER 5 Land Redistribution Qualified Agrarian Reform Beneficiaries Under CARP Section 22 of RA 6657 enumerates the groups of farmers and tillers who are qualified to become beneficiaries of the Comprehensive Agrarian Reform Program. who qualify under Section 6 of R.A. be landless. Qualifications of landowner's children as preferred beneficiaries have the willingness. or in the absence thereof. and the balance in the form of LBP bonds bearing market rates of interest that are aligned with 90-day treasury bills rates. (h) Collectives or cooperatives of the above beneficiaries. a) Bond payment over ten (10) years. one must: (a) (c) (b) be at least 15 years old or head of a family at the time the property was transferred in the name of the Republic of the Philippines. . Seasonal farmworkers. ability. and The requirements enumerated in Section 22 are the minimum or basic qualifications for a farmer to become a beneficiary of land under the agrarian reform program. and aptitude to cultivate the land and make it as productive as possible. and Under Sec. 6657. with ten percent (10%) of the value of the land payable immediately in cash. b) Direct payment in cash or in kind by the farmer-beneficiaries with the terms to be mutually agreed upon by the beneficiaries and landowners and subject to the approval of the DAR. to qualify as an agrarian reform beneficiary. which is the exemption from the payment of capital gains tax and other taxes and fees. landowners who voluntarily offer to sell their lands are given the same incentive given to PD 27 landowners under EO 228. 9 of EO 229. following the order of priority quoted above. Agricultural lessees and share tenants. net of applicable final withholding tax. c) Other modes of payment as may be prescribed or approved by the PARC.The LBP bonds issued hereunder shall be eligible for the purchase of government assets to be privatized. Qualifications of Agrarian Reform Beneficiary According to Section 22 of RA 6657. Other farmworkers. No. 27. and only to the extent of the difference between the area of the land he owns and the award ceiling of three (3) hectares. lease. 6657. d) Those whose land has been foreclosed by the Land Bank. provided that he is actually cultivating that land. No. 4. Children of landowners are classified as preferred beneficiaries. Grounds for disqualification of beneficiary Under DAR Memorandum Circular No. for non-payment of an aggregate of three annual amortizations. 27.D. in circumvention or R. unless there has been a tenancy relationship between the parent-landowners and the children. Those who fail to meet the qualifications prescribed under Section 22. (d) Sale.As provided in Section 6. and other agrarian reform laws. on the condition that he is at least 15 years of age at the time of the award. and other agrarian reform laws. Series of 1994. or repossessed by the landowner in case of Voluntary Land Transfer/Direct Payment Scheme. In the latter case. The transfer of the land to them is effected by the issuance of CLOAs. 22). the Land Bank shall finance the acquisition of the property. No.D.A. Misuse of the land. P. three (3) hectares of agricultural land may be awarded to each child of the landowner. and the land awarded to them does not form part of the retention right of the parent-landowners. 27. and Those who have culpably sold. or other forms of conveyance by the beneficiary of rights over the land. The rights and obligations of landowners' children as preferred beneficiaries are governed byMemorandum Circular No. No. Persons Disqualified as Agrarian Reform Beneficiaries The following persons are disqualified from becoming agrarian reform beneficiaries: a) c) b) Those who are not included in the enumeration in Section 22. "Directly managing the farm" refers to the cultivation of the land through personal supervision under the system of labor administration. transfer. The rules on payment for the value of the land by the Land Bank and the payment of amortizations by the beneficiary do not apply in the case of preferred beneficiaries. or abandoned their land received under CARP or P. Those who have converted their land to non-agricultural use without prior approval by DAR.A. the following violations will result in the disqualification of a farmer from being a beneficiary or from continuing as such under the agrarian reform program: (a) (b) Misuse or diversion of financial and support services extended to the beneficiary. (c) Material misrepresentation of the beneficiary's basic qualifications as provided under Section 22 of R. Section 7 also provides that an owner-tiller may still be awarded another parcel of agricultural land under the program. "Landless Persons" Under CARL Section 25 of RA 6657 provides that a landless person is one who owns less than three (3) hectares of agricultural land. A tenant who owns one hectare of agricultural land may still qualify as a beneficiary for two more hectares. e) f) Those guilty of negligence or misuse of the land or any support extended to him (Sec. 19 (1996). 6657. P. .D. disposed of. and that he is actually tilling the land or directly managing the farm. A farmer who claims priority over those who have been identified by the MARO as beneficiaries should file a written protest with the MARO or the PARO who is processing the claim folder. G. claiming that they are now entitled to be awarded the land they are tilling pursuant to the land reform program. The beneficiaries must qualify under the law. the university served notices to vacate on the occupants of the land. Waiver of rights to awarded lands. If the motion is denied. A separate chapter on prohibited acts. It was expressly stipulated in the contract that no landlord-tenant relationship arose between the parties.R. except in cases of fortuitous events. (g) (i) (h) Illegal conversion of the land by the beneficiary. The occupants refused to vacate the land. If the parties disagree with the RD's decision. not claiming in good faith the right to do so by virtue of any title of his own. The Supreme Court held that squatters are disqualified from becoming CARP beneficiaries because they are "guilty of committing prohibited acts of forcible entry or illegal detainer.(e) Continuous neglect or abandonment of the awarded land over a period of two calendar years as determined by the Secretary or his authorized representative." (Emphasis supplied. Once the protest is filed. the university entered into a contract with members of the faculty and staff for an experimental rice project. Beneficiary's surrender of awarded land to landowner or other non-beneficiary. Even under this scheme. DARAB. It is not a direct transaction between the landowner and the beneficiaries. with the participation of the BARC.) Selection of Beneficiaries The Municipal Agrarian Reform Officer or the Agrarian Reform Program Technologist. 100091. [and therefore] do not qualify as beneficiaries of and may not avail themselves of the rights and benefits of agrarian reform". Land acquisition and land distribution are two different transactions. Landowner not entitled to select beneficiaries It is not the landowner who distributes his land. After the term of the project has expired. Squatters disqualified to become CARP beneficiaries (j) Other acts or omissions that circumvent laws related to the implementation of the agrarian reform program. screens the beneficiaries. 1992. The Supreme Court also ruled that "a person entering upon the lands of another. under which the latter were given tracts of land for cultivation. and it is still the MARO and the BARC who do the screening. This rule also applies to voluntary land transfer/direct payment scheme. and under the umbrella of the CARP. October 22. and In the case Central Mindanao University vs. the farmers can appeal to the Secretary. Squatters cannot enter the land of another surreptitiously or by stealth. they can file a written motion for reconsideration. discusses these violations in detail.. supra. . It is the government which buys the land from the landowner and then sells it to the beneficiaries. the MARO/PARO shall comment on the protest and submit the same to the Regional Director who shall rule on the protest. it is not the landowner who determines who will be the beneficiaries. so he does not have the right to select who the transferees. or by virtue of some agreement with the owner or with one whom he believes holds title to the land. is a squatter. No. (f) Failure to pay an aggregate of three (3) consecutive amortizations to the Land Bank or to the landowner. claim rights to said property as landless peasants. the list of qualifications in Section . gross neglect and abandonment of duties. commission of crime or offense by the employee against the person or immediate family of the employer. Just cause is distinguished from authorized cause in the Labor Code because while just causes have something to do with the moral depravity and fault of the employee. 1998 or upon expiration or termination of the deferment. 442. otherwise known as the Labor Code of the Philippines. "Just cause" may consist in serious misconduct. Special qualifications for farmworkers in commercial farms Aside from the minimum qualifications in Section 22 of R. weekly.A.A. Section 5 of Administrative Order No. 1988 and June 15. Specific disqualifications for commercial farmworkers (c) they must have been employed in the commercial farm between June 15. and ability to cultivate and make the land productive. 9. provides for special qualifications for farmworkers in commercial farms. R. on the other hand. termination for authorized causes is due to circumstances beyond the control of the employee. retrenchment due to legitimate business losses. and ailment or disease of the employee (see LABOR CODE.Farmworker defined A farmworker is defined by Section 3 (g). d) Dismissal for cause by final judgment. For one. 6657. willful disobedience of reasonable and lawful orders of the employer. Series of 1998. aptitude. and Mandatory retirement. Article 283). e) Violation of agrarian reform laws and regulations as determined with finality by the proper tribunal or agency. closure of business. The term includes an individual whose work has ceased because of a pending agrarian dispute and who has not obtained a substantially equivalent and regular farm employment. provides that the following shall be grounds for the disqualification of potential beneficiaries: a) c) b) Optional retirement or resignation. Questions have been raised on whether dismissal for cause distinguishes between just and authorized causes as these two categories are defined in Presidential Decree No. or "pakyaw" basis. It is evident from the history of the provision of the administrative issuances on qualified farmworkers that the intention is to distinguish between just and authorized causes. and Farmworkers who have worked longest on the land continuously shall be given priority. dishonesty and loss of confidence of the employer in the employee. 9. Waiver or refusal to be a beneficiary. 6657 as a natural person who renders service for value as an employee or laborer in an agricultural enterprise or farm regardless of whether his/her companion is paid on a daily. which are as follows: (a) (b) they must be at least 18 years old upon filing of application as agrarian reform beneficiary. may be one of the following: introduction of labor-saving devices. Section 4 of Administrative Order No. "Authorized cause". redundancy. monthly. they must have the willingness. Article 282). Series of 1998. provided that the farmworker has not filed any case questioning such retirement or resignation. and analogous cases (see LABOR CODE. 1988 and June 15. of Labor and Employment. in item (b). residency. with approval of the Dept. seasonal. assign. medical. who is highly educated and trained and performs functions in scientific. DAR A. or intermittent basis by an agricultural enterprise or farm. namely. They shall be ranked according to the length of their continuous service in the commercial farm reckoned from June 15. 6657. 9. i. 9. 9.A. Retrenchment as a ground for disqualification is listed as a separate item. on the other hand. whether as regular. no. Series of 1998. Administrative Order No. (b) Managerial or supervisory farmworker is a natural person who is employed by an agricultural enterprise or farm vested with powers and prerogatives (1) to lay down and execute management policies. Administrative Order No. Article II. 9. and soil analysts. which provides for the prioritization of beneficiaries.e. (a) Technical farmworker is a natural person employed by an agricultural enterprise or farm. but who is not vested with managerial or supervisory functions. 2. and such other factors as the Committee may deem appropriate. recall. No. (2) to hire. still includes retrenched workers among the potential beneficiaries. teaching.) Different Categories of Farmworkers Section 3. suspend. (b) Seasonal farmworker is a natural person who is employed on a recurrent. identifies two more categories: (c) Other farmworker is a farmworker who is neither a regular nor a seasonal farmworker. and/or (3) to effectively recommend such managerial actions. The latter administrative order removed retrenchment as a ground for disqualification. and does not include dismissal for authorized causes. whether they have been validly retrenched. Series of 1998. letter M. such as chemists.A. such as "dumaan" and "sacada". the original rules governing the acquisition of commercial farms. Series of 1998. provides for dismissal from service for cause as a ground for disqualification. (Underscoring supplied. engineering. item (d). Series of 1998 provides that the potential beneficiary "must have been employed in the commercial farm between June 15. whether directly related to farm activities. The provision states: The Beneficiary Screening Committee shall prioritize the potential ARBs pursuant to Section 22 of R.e. layoff. Part IV thereof. Secondly. 6. the nature of their work. or discipline employees. i. such as a farmworker who performs farm activities but is not paid for his or her labor. whether residing in the same barangay or municipality. or other farmworkers are qualified . item (h). Administrative Order No. i. periodic. Only dismissal for cause (meaning just cause) has been retained. Section 6. 6. Series of 1998 was eventually superseded by Administrative Order No. discharge. Series of 1998. whether as a permanent or a non-permanent laborer. Thirdly. transfer.O.4. R. veterinarians. Categories of farmworkers qualified to become beneficiaries under CARP Farmworkers who are directly working on the land at the time DAR conducts actual investigation and documentation of the agricultural enterprise. 1988 up to the expiration of the deferment period. 6657 identifies these categories as follows: (a) Regular farmworker is a natural person who is employed on a permanent basis by an agricultural enterprise or farm. 1998 or upon expiration or termination of the deferment". agronomists. and other fields. Administrative Order No. This shows that item (b) refers only to dismissal for just causes. This new provision makes the qualifications encompass even those whose services have been terminated by the commercial farm as of the time the deferment period expires.e. Series of 1998. there are two views on the matter. as Chairman. Series of 1998.beneficiaries. and a waiting list of those who possess the minimum qualifications and none of the disqualifications. from each of the barangays where the subject commercial plantation is situated. and selection of agrarian reform beneficiaries for acquired commercial farms. however. No motion for reconsideration of the decision of the Regional Director shall be allowed. The other view is that they are qualified so long as they are directly working on the land. 9. fire. One holds that supervisory and managerial employees of commercial farms are disqualified from becoming beneficiaries since the laws and regulations specify the rank and not the job description.O.O. The Committee is composed of the following: (1) (2) The Provincial Agrarian Reform Officer. (3) The Provincial Agrarian Reform Coordinating Committee (PARCCOM) Chairman or his duly authorized representative. The Municipal Agrarian Reform Officer. 9. (5) The Barangay Chairman or his duly-authorized representative. and/or to effectively recommend such managerial actions. Selection of Beneficiaries of Commercial Farms Under A. No. It is our opinion that these so called "supervisory or managerial" employees can qualify as beneficiaries. Series of 1998. . there is a Beneficiary Screening Committee responsible for the qualification. No. In the case.O. but who could not otherwise be accommodated in the updated master list. No. Series of 1998). to hire. Managerial and supervisory farmworkers Managerial and supervisory farmworkers may qualify as CARP beneficiaries provided that they have been identified as qualified beneficiaries prior to their promotion. 9. identification. and the Chairman shall transmit the records to the Regional Director for the latter's decision. The Committee Chairman shall furnish a copy of the protest to the beneficiaries whose inclusion in the list is being questioned. The protestees shall file their answer or comment on the protest. of supervisory or managerial employees whose responsibilities do not actually conform to the definition of supervisory or managerial farmworkers. The Regional Director shall resolve the protest based on substantial evidence showing the qualification or disqualification of the beneficiary subject of the protest. (4) The Barangay Agrarian Reform Council (BARC) Chairman or his duly authorized representative from each of the barangays where the subject commercial farm is situated. Notwithstanding the appeal. provides that to be considered a supervisor or a manager. No. and The Committee comes up with a master list of qualified beneficiaries. and that they give up their managerial or supervisory positions (see A. assign.O. whose decision shall be final and executory. other farmworkers who are directly employed by the agribusiness enterprise or corporation may be considered as beneficiaries. as members. Remedy of farmworker excluded from master list A farmworker who is excluded from the masterlist may file a written protest with the Beneficiary Screening Committee. and discipline employees. 9. however. but such decision may be appealed to the Office of the Undersecretary for Field Operations and Support Services. the decision of the Regional Director shall not be stayed. and possess all the qualifications and none of the disqualifications for becoming an agrarian reform beneficiary. Under A. provided they meet the basic qualifications prescribed in Section 22. The definition of supervisory or managerial farmworkers in A. the farmworker must be vested with the power to formulate and implement management policies. worse. G. be an awardee of land under CARP. Section 22 includes seasonal farmworkers among the beneficiaries qualified to receive land under R. one . in fact. provides that "(t)he beneficiaries may opt for collective ownership. the recommendation is (1) discretionary or judgmental. but not to own land. Rather. 6657. by itself.A. Cooperatives refer to "organizations composed primarily of small agricultural producers. provided they meet all the qualifications and possess none of the disqualifications. Moreover. Section 4 of the Constitution enacted Section 22 of RA 6657 which explicitly includes seasonal farmworkers among the qualified beneficiaries. 1999. 75039. and actual tillers or occupants of public lands. rather than the rank. intervenors.A. to wit: agricultural lessees and share tenants. who are landless. G. Corona. even a collective or cooperative of. following the order of priority set forth in the law. however. and (3) effectively considered in the management decision. the power to recommend must not be merely routinary or clerical in nature but requires the use of independent judgment. regular farmworkers. They should still qualify as beneficiaries. which provides: It is our view. then the person is not really a supervisor but a rank-and-file employee. No. The State shall. 6657. the observation made by the Supreme Court is only an obiter dictum and cannot be made the basis for the loss or acquisition of legal rights. Trajano. This view finds support in Fortich vs. or other agrarian reform beneficiaries who voluntarily organize themselves for the purpose of pooling land. (2) independent. who are admittedly not regular but seasonal farmworkers. by law. 1988. financial. technological. it is our view that the functions performed. or other economic resources.Jurisprudence supports the view that this power is essential before an employee may be considered as supervisory or managerial. August 19.R. Congress. their right is limited only to a just share of the fruits of the land. farmers. Martin. should be determinative of the status of the farmworker. human. and operated on the principle of one member. There is a view that seasonal farmworkers are entitled "only to a just share of the fruits of the land". to own directly or collectively the lands they till or. it was held: To make one a supervisor. January 28. to receive a just share of the fruits thereof. 6657. not clerical. Section 4 of the Constitution. If these qualities are lacking or. subject to the rules on prioritization set down under the law. among others. No. have no legal or actual and substantive interest over the subject land inasmuch as they have no right to own land. as expressed in the opinion of Mr. in the case of other farmworkers. Hence. 131457. In other words. farmworkers. if the power to recommend is absent. can. Moreover. "seasonal farmworkers" and "other farmworkers" may be awarded lands under the agrarian reform program. such as co-ownership or farmers cooperative or some other form of collective organization". Seasonal farmworkers There are instances when the position of a farmworker is denominated "managerial" or "supervisory" even when he is not performing the functions enumerated in the definition. that the fact that seasonal farmworkers may not have been given a constitutional right does not mean that they do not have a statutory right. wherein the Supreme Court said: Again. 22 (a) to (e) of R. in interpreting and implementing Article XIII. other farmworkers. not a dictation of someone else. In Franklin Baker Company vs. Sec. undertake an agrarian reform program founded on the rights of farmers and regular farmworkers. Collectives or Cooperatives as Qualified Beneficiaries A collective or cooperative composed of the beneficiaries listed in Sec. The Court based its observation on Article XIII. seasonal farmworkers. 25 of R.R.A. 25 ofR. in fact. there is no need to include the names of the individual members thereof in the collective CLOA. Under Memorandum Circular No. 2. and Administrative Order No. Requirement for separate cultivation by spouses of beneficiaries . No. 3." (Underscoring supplied) Women as Beneficiaries under CARP Women are qualified to become agrarian reform beneficiaries in their own right." (Section 3 [k] of R. his right to the patent has vested. "At least on that date. for instance. can receive a maximum award of 75 hectares. the names of all the co-owners (i. a budget has been allocated for support services that will empower women beneficiaries. Memorandum Circular No. Involved in the Balboa case was an application for homestead patent. Sec. Series of 1996.00) has been guaranteed for qualified rural women's pre-cooperative groups." said the Court. G." Other rights as beneficiaries have been granted to women through other DAR administrative issuances.A 6657) Inclusion of names of members of collective or cooperative not mandatory Memorandum Circular No. ripened into a vested right. Series of 1986. the applicant has complied with all the requirements for the issuance of a patent. Under Part II. The term "vested right" has been defined in the case of Balboa vs.A. individual farmer-beneficiaries) should be listed in the collective CLOA. hence. "his right to the land. The Supreme Court. The aggregate size of land that may be awarded to an association or a cooperative shall not exceed the total number of members multiplied by the award ceiling of three hectares. 14. has become the property of some particular person or persons as a present interest". Each of the spouses shall be issued a separate CLOA. as owner. citing American cases. 10. Thus. However. not only as spouses of agrarian reform beneficiaries. with the same rights and duties as a natural person. 4. she is entitled to receive land under the program. The Supreme Court upheld his claim.R. farmworkers who are husband and wife may be separately entitled to three (3) hectares each provided that their vested rights to the land have been duly established. expressly require the listing of the names of all members in the CLOA issued to a collective or cooperative. stating that at the time the law was repealed. Where the CLOA is under co-ownership.D of Administrative Order No. (see Sec. For as long as a female farmer's rights have vested and have been established separately from her husband's or her father's. Under Memorandum Circular No.vote. February 14.e. support services in terms of loan assistance in an amount not to exceed three thousand pesos (P3. Series of 1993. except where the Presidential Agrarian Reform Council (PARC) approves the award of an area exceeding this limit. a cooperative composed of 25 members. Series of 1993. governing the issuance of collective CLOAs. It is our view that inclusion in the CLOA of the names of all the members of a collective or cooperative is not necessary in all cases. R. 1928.A 6657). A juridical person may be a member of a cooperative. Series of 1992. explained that "rights are vested when the right to enjoyment. the law granting him the right to such patent was repealed. Series of 1994. provides that "(t)itle to the property shall be issued in the name of the co-owners or the cooperative or collective organization as the case may be. The purpose of this requirement is to "protect a farmer-member from possible summary and unjust separation by the cooperative or association" (Part IV-A-1). however. 25. 24. as some right or interest in property which has become fixed and established and is no longer open to doubt or controversy".000. 27059. present or prospective. During the pendency of his application. It was no longer expectant as depending on some events or the performance of some conditions. 6657. Farrales. where the CLOA is awarded in the name of the association or cooperative. pursuant to Section 25 of R. With a view of equitable land distribution and ownership. We are of the opinion that separate cultivation must be required of women only where they are recipients of land in their own right. Factors Considered in Land Distribution In the equitable distribution of lands subject of CARP. the interests of women.Under Memorandum Circular No. DAR is mandated to distribute agricultural lands to as many tenants and farmworkers as possible. To require separate cultivation by spouses of male agrarian reform beneficiaries would work against. As long as the wife works in the home. 25. III (E). aside from the cultivation undertaken by her husband.O. [DAR A. 18.A. In case it is not economically feasible and sound to divide the land then it shall be collectively owned by the worker — beneficiaries who shall form into a worker cooperative or association which will deal with the corporation or business association. household chores. An additional burden of cultivating the land would be harshly onerous upon women who are spouses of beneficiaries.] Subdivision of lands under collective CLOA is governed by A. The total area that may be awarded under a collective CLOA shall not exceed the total number of co-owners or members of the cooperative or collective organization multiplied by the award limit of three hectares except in meritorious cases as determined by the PARC. lands shall be distributed directly to the individual worker beneficiaries. 6657. actual occupancy of a tenant shall be the basis of the award. and other work having to do with the maintenance of the home. In both Codes. In general. all the farmworkers therein shall be considered as potential beneficiaries in the estate. 6657 (1988) Sec.O.A. at the option of the organization. DAR A. The Civil Code and the Family Code recognize that the role of women in traditional families is the maintenance of the household.O. O. provided it does not exceed three (3) hectares. Collective co-ownership CLOAs may be issued to cover any CARPable lands whether private lands or public lands within proclaimed DAR settlement projects or public lands turned over to the DAR by other government agencies and institutions pursuant to E. particularly in agrarian areas. 10 (1990). For untenanted lands. Act No. Series of 1993. provided it does not exceed three hectares. Landholding covered by CLOAs in the name of cooperative or farmer's organization. the distribution of land shall be made directly to individual beneficiaries. Modes of Distribution: Individual vs. Furthermore. Collective Ownership It is the policy of the CARP to establish owner-cultivatorship of economic-sized farms as basis of Philippine agriculture. 29. [Rep. also be subdivided based on the share of each member provided that the subdivision as determined by the DAR shall be economically feasible. In line with this is the award of three hectares to the individual beneficiaries as the distribution limit. No. No. There is no reason for R. provided that the proportional share of each will not exceed . 6657 to be given a different interpretation as regards the rights of women to land awarded to their spouses under the Comprehensive Agrarian Reform Program. Series of 1996. may. women who are spouses of agrarian reform beneficiaries are required to also cultivate the land. maintenance of the home is recognized as the wife's contribution to the conjugal partnership of gains or to the absolute community of property as to entitle her to one-half share of the marital partnership property. and should no longer be required of women whose spouses receive land under the program. 407 as amended. 03 (1993). rather than protect. No. Act No. such as upbringing of children.] Lands covered by collective CLOAs on a co-ownership basis shall be subdivided in accordance with the actual occupancy of the ARBs. This requirement fails to recognize the role of women in the rural household. sec. 6657 (1988). No. all properties received or acquired during the subsistence of the marriage is considered part of the conjugal partnership of gains or of the absolute community of property. No. Women are usually given reproductive tasks. 03. [Rep. II (B)] The beneficiaries may opt for collective ownership such as co-ownership or farmer's cooperative or some other form of collective organization. For unoccupied lands. 12 [1991]. It is an integral part of the farm and an indispensable factor in farm operations. The generation and distribution of CLOAs is embraced within the concept of redistribution. shall be considered. 10 [1990]. each identified ARB may be allowed the award ceiling of three hectares. the PARO requests the DENR to conduct subdivision survey. otherwise. Thereafter the Land Distribution Folders are prepared and based on the ARBs preference and submitted to the PARO. the Republic of the Philippines through DAR. Distribution of Homelots A homelot refers to a parcel of agricultural land used by the ARB as the site of his permanent dwelling including the area utilized for raising vegetables.O.O. In issuing the CLOA. Provided that the landowner shoulders the cost of the transfer of his dwelling and the agreed cost of other improvements introduced by the tenant-beneficiary on said homelot. the Republic of the Philippines. the beneficiary may be made to transfer his dwelling to his farmlot or other area to be designated for his homelot which shall be mutually agreed upon by the parties. (DAR A. 6657 requires DAR to take physical possession as a precondition for redistributing lands subject of acquisition. It is submitted that physical possession is not necessary for land to be distributed. validates the list of qualified beneficiaries who were identified during the acquisition phase who are still present and qualified to receive the land. II [D]) Distribution Procedure The MARO. pigs and other animals and engaging in minor industries. The procedure for the acquisition and distribution of farmlots likewise apply to homelots. Upon transmittal. (DAR A. which became the registered owner of subject property. is deemed to be. Through a letter or CARP Beneficiary Certificate (CBC). The ARBs are consulted by the MARO as to their preferred mode of distribution . If the ARBs prefer individual parcels. 19 [1990]). of Lands [39 Phil 175 [1918]). Lastly.000 square meters. In all cases. Redistribution is not limited to the installation of farmers in the landholding. Dir. No.three (3) hectares. Qualified beneficiaries shall be awarded a maximum of three (3) hectares or a minimum of one (1) hectare each in case the land is not sufficient to accommodate them. No.O. If the homelot of a tenant-beneficiary falls within the retained area of the landowner. Nothing in R. No. for all legal intents and purposes. the PARO registers the CLOAs with the Register of Deeds and forwards the same to the MARO for distribution. II [C]) Distribution of Commercial Farms and Facilities Commercial farms may be distributed collectively or individually. The area of the homelot may not exceed 1. exercised an act of dominion over the landholding as redistribution involves disposition or alienation. What is required is "immediate possession" under Section 16 or "actual possession" under Section 24. upon completion of land acquisition. poultry. (Ramos vs. Having manifested its dominion over the land. acting through DAR. additional ARBS. the PARO reviews all documents and generates the Certificates of Land Ownership Award (CLOAs). No. [DAR A. The PARO then submits the CLOAs to the DAR Regional Office which causes them to be signed by the Secretary. the identified ARBs are formally notified by the MARO that they have qualified to receive the land. A compelling issue in respect to land distribution is the matter of physical possession by DAR as a necessary prerequisite to its distribution to the ARBs. . the aggregate award to an ARB shall not exceed the limit of three hectares and his total land ownership as a result of the award shall not exceed three (3) hectares. provided that there are enough lands for distribution under CARP in the barangay to accommodate others who are equally qualified but who may not have been considered as awardees in such land under acquisition.A. Actual possession of the land consists in the manifestation of acts of dominion over it of such a nature as a party would naturally exercise over his own property. in actual possession thereof. However. over and above the compensation they are currently receiving. in coordination with the Department of Agriculture and other concerned agencies. sec. decide whether to proceed with the partition or not. (DAR Adm. the amount to be distributed shall be reduced by an amount equivalent to the proportion of the retained area to the total land area. In the latter case. However in the case of individual distribution and considering the time and financial constraints particularly in the conduct of individual surveys.O. In addition. the individual members of the cooperatives or corporations shall have homelots and small farmlots for family use. provided that in cases where the retention right is allowed. (Rep. based on the following schedules: 1. in case it is not economically feasible and sound to divide the land. On the other hand. whether classified as regular. provided that the employer is not obligated to pay more than 100% of the regular annual compensation of the farmworker-beneficiaries. 29). to be taken from the land owned by the cooperative or corporation.O. [1988]) . No. 02-98) In individual CLOAs shall be generated within thirty (30) days upon receipt of the approved Segregation Plan (ASP). No. 02-98) Collective CLOAS shall be generated within thirty (30) days upon receipt by the PARO of the certified copy of the certificate of title in the name of the Republic of the Philippines.O. No. O. 8 [1988]) PPS are distributed to farmworkers. the land shall be allocated to the individual beneficiaries by drawing lots in the presence of DAR Representatives. No. DAR A. Corporate farms owning or operating under lease or management contract Pending final land transfer. by majority vote. 10% of net profit after tax. (Section 28 DAR A. the beneficiaries may.To expedite the acquisition. The general rule is that corporate farms are distributed directly to the individual worker-beneficiaries. through a Deed of Transfer which shall specify the names of the ARBs and duly annotated in the CLOAs generated over the subject landholding where said facilities and improvements are found. seasonal. corporate farms that own or operate under lease or management contract and realize gross sales in excess of P5 million are mandated to execute a production and profit sharing (PPS) plan provided under DAR AO No. corporate farms shall be owned collectively by the worker-beneficiaries who shall form a cooperative or association which will deal with the corporation or business association. All farmworkers in a corporate farm. 6657 [1988]. (DAR Adm. 2-1998) Facilities and improvements acquired shall be distributed collectively. No. (Section 17 DAR A. Act No. The PPS plan is imposed in order to allow the farmworkers in corporate farms to realize an improvement in their farm income pending final transfer of the farm. a collective CLOA may be generated in the interim over the subject landholding (Section 18. (Section 20 DAR A. 8 (1988). Thereafter. No. O. DAR shall first determine whether it is economically feasible to divide the land. Areas where the facilities and landholdings are found are deemed common areas and shall not be partitioned individually. the commercial farms shall be initially distributed collectively or under coownership. managerial and supervisory employees are excluded from entitlement to PPS. 02-1998) Distribution of Corporate Farms CLOAs shall be registered immediately upon generation. Three (3%) of Annual Gross Sales from 15 June 1988 until final land or corporate stock transfer to the farmworker-beneficiaries is effected. technical or other farmworkers are entitled to PPS. In the event the beneficiaries decide to partition. In the case the beneficiaries desire to partition the land.O. 2. compel answers to interrogatories. particularly the requirement of willingness. his heirs are not allowed to divide the land into smaller units. Sections 73 and 74 of RA 6657 regarding prohibited acts and omissions and the penalties therefor. compel the production of books and documents.A. (DAR Adm. Rights and Obligations of Beneficiaries Once a Certificate of Land Ownership Award has been issued to a beneficiary and registered in his name. Estrella (201 SCRA 536 [1991]) that it is only compliance with the prescribed conditions which entitles the farmer/grantee to an emancipation patent by which he acquires the vested right of absolute ownership in the landholding — a right which has become fixed and established and is no longer open to doubt and controversy. it serves as an evidence of title to the land. No. 8 [1988]) Proof of Ownership of Awarded Lands The Certificate of Land Ownership Award evidences the ARB's ownership in respect to private agricultural lands covered under R. Moreover. Decree [1976]. The beneficiary is also obliged to keep the land awarded to him intact. Emancipation Patents is the ARBs proof of ownership of lands awarded under Operation Land Transfer. such heirs are entitled to receive the land by way of hereditary succession. Act No. However. misuses. In the absence of qualified heirs or children. or sells the land. are evidenced by Free Patents. 266 (Pres. Discussing the nature of an Emancipation Patent. issue subpoena and subpoena duces tecum. to the eldest child who meets the qualifications to be a CARP beneficiary. cSIADH An agrarian reform beneficiary is obliged to exercise the diligence of a good father of a family in the use. cultivation. and he may not subdivide the land in favor of his children or heirs. 6657 (Rep. The Vinzons. . This means that the land may be transferred either to the spouse of the beneficiary. The three hectares have been identified as an economic-sized family farm which must be preserved as a single operating unit to promote the farm's economic viability. 12 [g]). sec. Ownership of public lands. cultivate it.Magana ruling must be appreciated in this context. No. The mere issuance of an Emancipation Patent does not put the ownership of the ARB beyond attack and scrutiny. The pronouncement of the court respecting the impregnable character of an Emancipation Patent should be qualified. 24). No. the Supreme Court ruled in the case ofVinzons-Magana vs. aptitude. The heir who succeeds to the land is under obligation to pay the other heirs their legal shares in the property of the deceased beneficiary.To ensure that corporate farm employers comply with the PPS provisions. abandons. upon the other hand. O. are applicable to any person or entity found to be violating any PPS provision. which shall identify a new beneficiary the land. as well as to support services to which he may be entitled as a beneficiary shall be forfeited in the event that he neglects. This only goes to show that ownership of awarded lands covered by Emancipation Patents may be challenged. and enforce its writs through Sheriffs or other duly deputized officers. and preservation of the land and the improvements thereon. 946 vests the Court of Agrarian Relations (now the DAR Adjudication Board) jurisdiction over cases involving the cancellation of emancipation patents issued under P.D. or in his or her absence or incapacity. It must be noted that P. sec. Even if the beneficiary dies. the Secretary of DAR or his authorized representatives shall have the power to order and administer compliance with the PPS provisions and to require submission of reports. No. and ability to cultivate the land and make it productive. The aforecited Supreme Court ruling presupposes that the issuance of emancipation patents to the ARB is not tainted with any irregularity such that it acquires the character of indefeasiblity. entitling the beneficiary to occupy the land. His rights to the land. 6657 [1988].D. and maintain possession of the same. he land shall revert to the DAR. 6938. Transferability of Awarded Lands Section 27 prohibits the sale. Termination of Membership. Protection of Rights of Member-Beneficiaries The protection of rights of member-beneficiaries may be ensured in the articles of incorporation and in the bylaws of the organization. the membership remains in force.A. 31. to the general assembly whose decision therein. may be adopted.O. withdraw his membership from the cooperative by giving a sixty (60)-day notice to the board of directors. Refund of Interests. Series of 1996. 6657 within ten (10) years from the date of award. within thirty (30) days after the decision is promulgated. (a) (3) A member may be terminated by a vote of the majority of all the members of the board of directors for any of the following causes: When a member has not patronized the services of the cooperative for an unreasonable period of time as may be fixed by the board of directors. insanity. . Pending a decision by the general assembly. 6657 and administrative rules and regulations issued pursuant to this law. which the member-beneficiaries themselves enact and approve. for any reason. — (1) A member of a cooperative may. The grounds enumerated in this Memorandum Circular are violations of various provisions of R. A member whose membership the board of directors may wish to terminate shall be informed of such intended action in writing and shall be given an opportunity to be heard before the said board makes its decision. (c) When a member has acted in violation of the by-laws and the rules of the cooperative. and (d) For any act or omission injurious or prejudicial to the interest or the welfare of the cooperative. 19. 32. That such refund shall not be made if upon such payment the value of the assets of the cooperative would be less than the aggregate amount of its debts and liabilities exclusive of his share capital contribution. Art. as the case may be. insolvency or dissolution of a member shall be considered an automatic termination of membership. supra.A. shall be final. Articles 31 and 32 of the Code provides: Art. — All sums computed in accordance with the bylaws to be due from a cooperative to a former member shall be paid to him either by the cooperative or by the approved transferee. transfer. (b) When a member has continuously failed to comply with his obligations. Memorandum Circular No. provides for the grounds for perpetual disqualification of agrarian reform beneficiaries. whether in a general or special session. (2) The death. 27 may be alienated only upon full payment of amortizations on the purchase price. or conveyance of lands acquired by beneficiaries under R. The decision of the board shall be in writing and shall be communicated in person or by registered mail to the member and shall be appealable.D. Lands awarded pursuant to E. No. Restrictions in the transfer of shares or membership rights. The withdrawing member shall be entitled to a refund of his share capital contribution and all other interests in the cooperative: Provided. 228 and P. 6657. otherwise known as the Cooperative Code.A.A beneficiary is likewise obliged to comply with the provisions of R. The contract of membership may likewise contain provisions ensuring that the rights of member-beneficiaries to ownership or other privileges as members are protected. in accordance with this Code. The interests of farmer-members may also be adequately protected according to the exit provisions in Republic Act No. This restriction on the transferability of the land is annotated on the certificate of title in the Register of Deeds.. by providing that such transfer shall be valid only if made in favor of another qualified beneficiary. the Land Bank. or conveyance contemplated by the prohibition. 6657 allows a farmer-beneficiary to transfer or convey his rights to the land.A. or conveying the awarded land. Ventura. at 103). 1. 8. governs the procedure for obtaining this consent. Disqualification of beneficiary who sold or transferred right to awarded land Section 73 (f) provides that the sale. disposing of. provided that prior approval of the DAR has been obtained.However. 6657. This provision presumes that the land to be alienated has been fully paid for by the beneficiaries. Administrative Order No.D. however. beneficiary. disposition. or in favor of the government. Farmer-beneficiary may alienate even without complete payment of amortizations The second paragraph of Section 27 of R. and cannot be construed to give the farmer-beneficiary license to convey the land without forfeiting his right to become a beneficiary again. The following are not prohibited transactions and may be registered by the Register of Deeds without prior clearance from DAR: Since mortgage is not a prohibited transaction. Deed of real estate mortgage executed by the . The buyer of agricultural land alienated under this section is still subject to the aggregate ownership ceiling of five (5) hectares. 27 are no longer qualified to receive land under R. An essential condition of such transfer or conveyance is that the transferee shall cultivate the land himself and maintain its productivity as agricultural land.A. Series of 1989 provides that beneficiaries who have sold the land they received under R. This must be harmonized with Section 27. may have anticipated circumstances in which the farmer-beneficiary is left with no alternative but to mortgage his land in order to respond to emergency situations such as sickness in the family (see Torres vs. and hence is not a sale. that the law intends to preserve the land in the hands of the beneficiary and to make him benefit from the land for as long a time as feasible. the framers of the law. Series of 1989. 187 SCRA 96. to any qualified heir of the beneficiary or to any other beneficiary. 6657. without any qualification on the manner of disposition. or conveyance by a farmer-beneficiary of the right to use or any usufructuary right over the land must be made "in order to circumvent the provisions" of R. 6657. which are prohibited transactions. The administrative issuances regarding the obtention of consent to convey the land merely exempt the vendor from criminal prosecution for circumventing R. or conveyed.3. The governing administrative issuance on land transactions is DAR Administrative Order No. 10.d provides: d. it follows that it is not tantamount to selling. Manner of Payment by Beneficiaries . and with prior approval of the DAR.A. or conveyance Mortgage is a land transaction allowed by the law.A. the lands acquired under CARP may be alienated through hereditary succession. transfer. Series of 1995. and only to the heirs of the beneficiary or to another beneficiary. which allows the farmer-beneficiary to transfer or convey the land or his rights to the land. in not expressly prohibiting mortgage. Administrative Order No. provided that it is with the prior approval of DAR. only the rights to the land may be sold. or other qualified beneficiaries even before the expiration of the ten-year period. Section II. Moreover. The failure to comply with this condition shall result in the availability of the land for distribution to another qualified agrarian reform beneficiary. disposition.A. . We believe. If the land has not yet been fully paid for. transferred. . 6657 or P. Mortgage of awarded land not equivalent to sale. A. however. Section 21 provides that payment shall be made directly by the farmer-beneficiaries to the landowner under the terms and conditions mutually agreed upon by the parties. if this amortization ceiling is lower than the regular amortization. 30. Payment by the beneficiaries. If the landowner and the farmer cannot agree on the price of the land. and shall not be changed throughout the period for payment of the value of the land. Administrative Order No. following the procedure under Section 16. R. the land may be repossessed in case the beneficiary fails to pay an aggregate of three (3) consecutive annual amortizations from the date of receipt of the amortization schedule. in any case. then the basis for the amortization schedule would be the date of CLOA registration. the DAR is mandated to ensure that these terms and conditions are not less favorable to the farmer-beneficiary than those which would have prevailed had the DAR acquired the land under the compulsory acquisition scheme. Section 19 (c) provides that the . which is reflected in the valuation portion of the Claim Valuation and Processing Form. Effect of default in payment by beneficiary In the case of land acquired under the VLT/DPS scheme. except if loss of crops occurs due to fortuitous event or force majeure. shall start one year from the date of the registration of the CLOA with the Register of Deeds. This is pursuant to the provision that. These are regular annual amortizations. 2.5% of annual gross production (AGP) for the first three years 5% of the AGP for the fourth and fifth years The annual gross production is defined as the peso value of the annual yield/produce per hectare of the land awarded to farmer-beneficiaries. For lands acquired under the VLT/DPS scheme. Series of 1997 states that in case occupancy of the land occurred before the date the CLOA is registered. the basis of computation shall be the cost of the land and the permanent improvements thereon. In the case of VLT/DPS. The ceiling on the payments for lands voluntarily offered or compulsorily acquired shall be the same. then the occupancy date would be the basis for the amortization schedule. Section 21 provides that the land shall be subject to compulsory acquisition. Section 26 provides that lands awarded to beneficiaries shall be paid for by the farmers in thirty (30) annual amortizations at six per cent (6%) interest per annum. Series of 1998. Such terms and conditions shall be subject to the approval by the DAR.For lands acquired by DAR through the compulsory acquisition scheme or through voluntary offer to sell. 6657). these should not be less favorable to the ARB that those that would prevail had the land been acquired by the government compulsorily (see Section 20 [b]. (3) 10% of the AGP for the sixth to thirtieth years. Pursuant to the mandate of the law that the payments shall be made affordable to the beneficiaries. Pursuant to Section 20. Computation of amount of amortizations Under Administrative Order No. for the purposes of computing the regular amortization. 2. If the occupancy date occurred after the date of CLOA registration. although the terms and conditions of the VLT/DPS shall be mutually agreed upon by the landowners and the farmer-beneficiaries. the AGP shall be that agreed upon by the parties during the proceedings for the determination of just compensation. Series of 1998 provides that the amortizations may be reduced to: (1) (2) 2. Joint DAR-LBP Memorandum Circular No. payable to the Land Bank of the Philippines. The only effect of this change is to increase government assistance or subsidy. as a condition for such transfer. In the case of land voluntarily offered for sale or compulsorily acquired. a new qualified beneficiary who. The provisions under AO 8 (1988) governs production and profit sharing plan under RA 6657. Repossessed land does not revert to former landowner In case awarded land is repossessed by the government. the landowner shall refund the payments to the latter. No. (b) The difference between the regular annual amortization and ten percent (10%) of the AGP during the 6th to 30th year. In both cases. and Production and Profit Sharing Under Sections 13 and 32 of RA 6657. whenever such 10% AGP is lower that the regular amortization. less the lease rentals for the duration of his use of the land and other charges allowed by law. and transfer the land to either of the following: a) b) In the absence of a qualified heir. or Beneficiary in default will not forfeit payments If the land is sold to a new beneficiary other than an heir of the former beneficiary.voluntary agreement entered into by the landowners and the beneficiaries under VLT/DPS shall include sanctions for non-compliance by either party. the scheduled amortization payment is limited to the maximum amount of 10% of the annual gross production (see Section IV. Series of 1992). the failure of the beneficiary to pay at least three (3) annual amortizations to the Land Bank gives the bank the right to foreclose the land. . or any other instance when the failure to produce is not due to the fault of the farmer. the beneficiary shall be permanently disqualified from becoming a beneficiary again. in one lump sum or in installments. subject to the approval by the DAR. A. pending final distribution of the land or implementation of the stock distribution scheme. 2. and who will pay for the entire value of the land. is willing to abide by the terms of the existing VLT/DPS agreement. The default due to fortuitous event shall not result in the permanent disqualification of the beneficiary. the DAR shall cancel the CLOA issued to the beneficiary. with the exception of loss of crops due to force majeure. Failure to pay due to fortuitous event If the default is occasioned by natural calamity and/or force majeure. 2. (c) Rebate of 2% of interest in case the beneficiary makes an early payment. Effect of higher valuation The amount of regular annual amortization is not affected in case the landowner is granted by the courts a higher valuation than that pegged by the DAR/LBP/BARC during the valuation process. Assistance to farmer-beneficiaries in making payments Administrative Order No. A qualified heir of the beneficiary who shall assume the balance of the value of the land.O. Series of 1998 defines "assistance to farmers" as follows: (a) The difference between the regular annual amortization (based on the amount paid or approved for payment to the landowner) and the affordable amount during the first five (5) years after the award of the land to the ARBs where the affordable amount is lower that the regular amortization. and shall pay for the improvements made by the former beneficiary. individuals or entities owning agricultural lands and operating under lease or management contract are required to execute production and profit-sharing plan with their farmworkers or farmworkers' organization. technical or other farmworkers are covered in the mandated production and profit-sharing plan. regardless of duration. fishponds and prawn ponds. The enforce the above mandate. All farmworkers of covered employers. said employees must not own more than three (3) hectares of agricultural land. vegetable and cut-flower farms. [AO 8 (1988)] Non-compliance with the provisions on production and profit-sharing is a violation covered by the provisions on prohibited acts and omissions and the penalties therein under Sections 73 and 74 of RA 6657. who are directly working on the land of the corporation or other entities. To issue subpoena. To compel the production of books and other relevant documents of covered employers. Existing production and profit-sharing granted prior to the effectivity of CARP shall be credited as compliance with the mandated production and profit-sharing plan. The following employers are required to execute production and profit-sharing plan provided that their annual gross sales exceed P5 million: 2) Multinational corporations engaged in agricultural activities. management contract.A production and profit-sharing plan is required in order to improve the income of farmworkers pending final land transfer or stock distribution or full control in the case of deferred commercial farms and lease-back arrangements. the amount to be distributed shall be reduced by an amount equivalent to the proportion of the retained area to the total land area. whether classified as regular. covered employers shall pay the difference to the farmworkers. Covered employers are required to pay the following. DAR through its Secretary or authorized representatives has the following powers: 1) 2) 3) 5) 6) To require covered employers to submit report on the distributed production and profit shares. 10% of net profit after tax. production venture or other similar arrangement. 6657 are tax exempt as provided in Section 66 thereof. and 1) Any enterprise owning or operating agricultural lands under lease. and 2) In addition. No. where the benefits received are less than what is provided under RA 6657. orchards. over and above the compensation currently received by the farmworkers: 1) Three (3%) of Annual Gross Sales from 15 June 1988 until final land or corporate stock transfer to the farmworker-beneficiaries is effected. To order and administer compliance with the Production and Profit-Sharing provisions of RA 6657. Tax Exemption Transfers of ownership under R. however. However. 4) To compel answers to questions needing clarifications to shed light on problems encountered in the implementation of the plan.A. fruit farms. provided that in cases where the retention right is allowed. seasonal. coffee and rubber plantation. provided that the employer is not obligated to pay more than 100% of the regular annual compensation of the farmworker-beneficiaries. To enforce its writs through sheriffs or other duly deputized officers. 3) Commercial farms devoted to aquaculture including salt beds. as follows: . and cacao. To qualify. A. voluntary land transfer or direct payment scheme for the purposes of transferring these to the beneficiaries. It must be emphasized that tax exemptions are to be strictly construed against the taxpayer. as amended by R. Joint Economic Enterprises refer to partnerships or arrangements between beneficiaries and investors to implement an agribusiness enterprise in agrarian reform areas. 1998. the landowner shall be entitled to harvest his/her share in that ratoon crop. Peñaflor for the Secretary. without penalty or interest. Hence. shall be exempted from taxes arising form capital gains. Particularly in carrying out the provisions of the following services to farmer beneficiaries and affected landowners: . In the case of sugarlands. Support Services Agrarian reform involves not only land redistribution. (Section 3 (a) R. whether from natural or juridical person. The arrangement finds legal basis in Section 35 and 44 of R. 6657. . Therefore. transfer of homelots to farmers as disturbance compensation in the case of lands already exempted from CARP coverage is taxable. as follows: Standing crops refer only to those crops existing at the time DAR takes possession of the land. 6657).A. and shall be given reasonable time to harvest the same to the extent of the share pertaining to him/her. PARC Secretariat). . R. . if what is existing at the time the DAR takes possession of the land is the original crop. There is hereby created the Office of Support Services under the DAR to be headed by an Undersecretary.A.Transactions under this Act involving transfer of ownership. shall be deductible from the compensation to which the owner may be entitled. No. the DAR is authorized to enter into contracts with interested private parties on long term basis or through joint .. excluding future harvests from ratoons. any transaction not expressly enumerated in Section 66 of R. (Memorandum of Asst. the term shall include the original crop only. For the purpose of providing the aforecited infrastructure and facilities. 06 April 2000) Standing Crops Section 28 provides that the landowner is entitled to retain his or her share in the standing crops unharvested at the time the DAR shall take possession of the land under the compulsory acquisition scheme. compulsory acquisition. 6657). No.34 million as of 1998 are reached by such services.A.e. Notwithstanding the enactment of R. That all arrearages in real property taxes. No 7905. This Office shall provide general support and coordinative services in the implementation of the program. (2) Infrastructure development and public works projects in areas and settlements that come under agrarian reform . It is submitted that tax-exempt transactions contemplated in the above-quoted provision only involve lands placed under the coverage of the CARP and acquired through any of the modes of acquisition provided under the law.A. Only 370. Provided. If what is existing at the time of possession is already the first or second crop. the Office of Support Services was created to provide general support and coordinative services in the implementation of the program. .000 beneficiaries within the Agrarian Reform Communities (ARCs) out of 3. but also the totality of factors and support services designed to uplift the economic status of the beneficiaries and all other arrangements which will allow the beneficiaries to receive a just share of the fruits of the lands they work. To address the latter. . (CARP Annual Report. voluntary offer to sell. Thus. . and all other taxes and fees for the conveyance or transfer thereof. This is so since the farmertransferees in this case did not acquire the land as agrarian reform beneficiaries within the context of R. 7905 otherwise known as "An Act to Strengthen the Implementation of the Comprehensive Agrarian Program and for other Purposes" support services by the government remained limited because of fiscal constraints. These transactions shall also be exempted from the payment of registration fees. No. No. It is within this framework that Joint Economic Enterprises was conceived. . (Section 35. No.A.A. 6657 should be construed as not included in the taxexempt provision of the law. Sec. the Department saw the need to mobilize the private sector to ensure adequate support services. No. i. . 6657. it shall recommend to the PARC the following: . Only the use thereof. is conveyed.venture agreements or build-operate-transfer schemes. No. . The joint venture is to be managed jointly by the investors and the ARBs. Provided that lease back arrangements should be the last resort. equal to lease rental. . . cooperatives or associations of beneficiaries. processing and marketing of products.. The equity and interest of the parties to a joint economic enterprise depend on the nature of enterprise and extent of participation. equipment and other services to beneficiaries. the beneficiaries contribute use of the land together with the facilities and improvement while the investor provides capital and technology for production. DAR A. 3) continuous processing of applications for lease back agreements. or introduction. (Section 4. technology. The equity of beneficiaries in a joint venture depends on the value of use of land and improvements at the minimum. maintenance. 2-1999) In a joint economic enterprise. or provision of management expertise. non-government organizations. No.O. prevailing market prices and other appropriate factors. ownership of land remains with the beneficiaries. in addition. or for construction. . Small landowners may engage in joint economic enterprises involving their retained areas. 2-1999) It must be noted that the beneficiaries referred to include holders of Emancipation Patents (EPs) of Certificates of Land Ownership Awards (CLOAs). Parties hall exercise shared responsibility and co-determination on matters affecting the viability of land and income of beneficiaries. partnerships or corporations. joint venture agreements and other schemes that will optimize the operating size for agricultural production and also promote both security of income to farmer beneficiaries. Incorporated in said agreement is a price review mechanism taking into consideration industry practice. Processing and Marketing Agreement In a production. upgrading of agricultural capital assets. . . processing and marketing agreement. No. the investor builds or rehabilitates facilities and improvements necessary to make the lands productive and directly operates the same for a certain period. (Underscoring supplied) The parties to a joint economic enterprise are the agrarian reform beneficiaries and investors who may either be private individuals. rehabilitation or upgrading of agricultural capital assets. (Section 6. . .O. processing and marketing of goods. The beneficiaries and/or their dependents are to be given preference for employment in the joint venture. Joint Economic Enterprises The PARCCOM shall coordinate and monitor the implementation of the CARP in the province . Qualified beneficiaries of agricultural lands for distribution under the agrarian reform program may also avail of the same provided that the land is distributed to the beneficiaries before an agribusiness agreement is executed. O. the beneficiaries engage in production and processing of agricultural products and directly sell them to the investor who provides loans and technology. The facilities and improvements are . infrastructure and facilities. The purposes for which a joint economic enterprise is to be established are production. government-owned or controlled corporations and other entities (Section 6 DAR A. The equity of the beneficiaries is not subject to dilution. rehabilitation. DAR A. (10) Assistance in the identification of ready markets for agricultural produce and training in other various aspects of marketing . Build Operate Transfer Scheme In a build-operate-transfer scheme. The beneficiaries are given a fixed number of seats in its board of directors corresponding to their equity interest. The parties shall agree on the period and cause the annotation of the agreement on the titles of the properties. . 2-99) Types of Joint Economic Enterprises Joint Venture In a joint venture. The joint venture has a personality separate and distinct from the parties. Production. infrastructure or facilities. where necessary. harvesting. 7905.A. Combinations or Phased Arrangements Combinations or phased arrangements combine the features of any or all of the preceding forms of agribusiness enterprises. Initially. the ARBs are to be treated as employees of the lessee/investor and are entitled to the mandated minimum wage and other economic benefits granted under the Labor Code and other existing laws. However. the investor provides capital to operate the farm. a human resource development program for the members of the cooperative. under Section 44 of R. 6657 as amended. In said scheme. The lessee may either be a former landowner or other investors. Upon expiration of the agreed period. while a corporation may undertake processing and marketing. otherwise be available as financing or capital for beneficiaries. In this arrangement. leaseback arrangements should be the last resort. joint venture. beneficiaries bind themselves to give investor enjoyment or use of their land for a price certain and for a definite period. and he shall not be allowed to access. as amended by R. 2-99) CHAPTER 6 Adjudication of Agrarian Reform Matters Jurisdiction of DAR .constructed at the investor's own expense. and finally. DAR A. No. in turn provide labor. association or federation is to be implemented to facilitate transfer of technology and management techniques to enable them to directly manage and operate the farm. In this arrangement.O. The service contractors may include other ARBs with necessary equipment and facilities for mechanized farm operations. All income from the operation of the farm accrue exclusively to the ARBs. the arrangement may provide for leaseback. No. process and market agricultural products. for this purpose. (Section 7. while marketing may be under a joint venture. Small growers may engage production.A. followed by a contract growing. For instance. ownership of the facilities and other improvements is consolidated in the name of the beneficiaries. No. 6657. Beneficiaries who wish to engage in service contracting but with limited financial capability may avail of loan facilities or credits pursuant to Section 35 of R. post-harvest operations and other activities. or provide for a phased implementation thereof. beneficiaries engage for a fee the services of a contractor for mechanized land preparation. Service Contract In a service contract. production and processing of agricultural corps may be covered by contract growing.A. the beneficiaries receive reasonable rent for the use of land. Lease Contract In a lease contract. Management Contract In a management contract beneficiaries hire the services of a contractor with managerial skills and capability to manage and operate the farm in exchange for a fixed wage and/or commission. The lessee/investor is to give priority to qualified and willing ARBs and their dependents for employment in the enterprise. Other Schemes Other schemes refer to other agribusiness arrangements or schemes that optimize the operating size of distributed lands for agricultural production consistent with existing laws and regulations. This means that the ARBs and the investor (former landowner) must first consider other types of agribusiness arrangements before deciding on a lease. construct facilities and other improvements. government funds that would. In such cases. The beneficiaries. No. cultivation. 55 and 68 ofRA 6657. . rules and regulations. 50 of RA 6657 provides that the DAR is vested with primary jurisdiction to determine and adjudicate agrarian reform matters and shall have exclusive jurisdiction over all matters involving the implementation of agrarian reform. 55 provides that no court in the Philippines shall have jurisdiction to issue any restraining order or writ of preliminary injunction against the PARC or any of its duly authorized or designated agencies in any case. In the exercise of its jurisdiction. 44 (1990) as implemented by DAR AO 6 (1994). dispute or controversy arising from. qualification or disqualification of potential farmer-beneficiaries. necessary to. e) f) Application for exemption under Section 10 of RA 6657 as implemented by DAR AO 13 (1990). Identification. or in connection with the application. On the other hand. d) Issuance. prohibition or mandamus shall be issued by the lower courts against DAR. enforcement. 68 states that no injunction. recall or cancellation of Certificates of Land Transfer (CLTs) and CARP Beneficiary Certificates (CBCs) in cases outside the purview of PD 816. commercial. These cases strictly involve the administrative implementation of RA 6657 and other agrarian laws. including the issuance. DAR shall not be bound by technical rules of procedure and evidence but shall proceed to hear and decide all cases. Restraining orders or injunctions issued by regular courts Any restraining order or injunction issued by courts against DAR pursuant to the implementation of CARP is null and void as it violates the express provisions of Sec. g) Application for exemption pursuant to DOJ Opinion No. including protests or oppositions thereto and petitions for lifting of coverage. restraining order. DA. Sec. k) Application for conversion of agricultural lands to residential. or interpretation of agrarian laws. Petitions for the determination of just compensation to landowners and the prosecution of all criminal offenses under RA 6657 falls within the original and exclusive jurisdiction of the Special Agrarian Courts (SACs). implementation. except those falling under the exclusive jurisdiction of the DA and the DENR. These cases include the following: a) Classification and identification of landholdings for coverage under CARP. ALI Cases Under DAR AO 6 (2000). h) i) Application for exemption under Section 1 of RA 7881 as implemented by DAR AO 3 (1995).Sec. DENR and DOJ in their implementation of CARP. Application for exemption under DAR AO No. recall or cancellation of EPs or CLOAs not yet registered with the Register of Deeds. Sec. 9 (1993). disputes or controversies in a more expeditious manner. employing all reasonable means to ascertain the facts of every case in accordance with justice and equity and the merits of the case. Exercise of the right of retention by the landowner. industrial or other nonagricultural uses including protests or opposition thereto. ALI cases refer to those agrarian cases falling under the exclusive jurisdiction of the DAR Secretary. b) c) Subdivision surveys of lands under CARP. Adjudication of agrarian reform matters involves the exercise by the DAR Secretary of its exclusive jurisdiction over agrarian law implementation (ALI) cases or the exercise by the DAR Adjudication Board (DARAB) of its jurisdiction under the 1994 DARAB Revised Rules of Procedure. j) Issuance of certificate of exemption for lands subject of VOS and CA found unsuitable for agricultural purposes pursuant to DAR MC 34 (1997). 6 [2000]. However. have the authority to issue a Cease and Desist Order or Status Quo Order pending the resolution of the case in the following instances: a) c) b) where grave or irreparable damage will result to the parties. this jurisdiction may be delegated to certain DAR officials in accordance with existing rules and regulations (DAR Adm. DAR Adm. (Rep. compel the production of books and documents and answers to interrogatories and issue subpoena. However. He or his authorized representative shall likewise have the power to punish direct and indirect contempts in the same manner and subject to the same penalties as provided in the Rules of Court. sec. Protest/Petition for Lifting of Notice of Coverage/Application for Exemption or Exclusion Under Sec.l) m) n) o) p) Right of the ARBs to homelots. O. 6657 [1988]. rules and regulations as determined by the Secretary. No. Act No. and subpoena duces tecum and to enforce its writs through sheriffs or other duly deputized officers. 17. He or his authorized representative shall have the power to summon witnesses. 6). require submission of reports. the Secretary or his authorized representative may exercise quasi-judicial powers granted under Section 50 of RA 6657. and Transfer. 8 [a]). the Regional Director shall exercise primary jurisdiction over protests or petitions for lifting of notice of coverage. 53) Jurisdiction over ALI Cases where there is a need to maintain peace and order and prevent injury or loss of life or property. 6 [2000]) Moreover. (DAR Adm. No. 6 [2000]. if no certification is issued by the BARC within thirty (30) days after a matter or issue is submitted to it for mediation or conciliation the case or dispute may be brought before the PARC. the issuing authority may request the assistance of law enforcement agencies to implement the order. Conflict of claims in landed estates and settlements. take testimony. q) Such other matters not mentioned above but strictly involving the administrative implementation of RA 6657 and other agrarian laws. sec. The Secretary shall exercise exclusive jurisdiction for application for the issuance of exemption clearance under DAR AO 6 (1994) involving lands with an area of more than five (5) hectares. shall. 7 of DAR AO 6 (2000). . surrender or abandonment by the FBs of his farmholding and its disposition. O. No. sec. For lands with an area of five (5) hectares and below. In the adjudication of ALI cases. Disposition of excess area of the FBs landholdings. Increase of awarded area awarded by the farmer-beneficiary. Likewise. The Secretary shall have exclusive original jurisdiction over all ALI cases. the Regional Director or the DAR official having jurisdiction over the case. or In this regard. 6 [2000]. O. where the doing or continuance of certain acts will render the case moot and academic. motu propio or at the instance of a party. (Sec. O. administer oaths. the DAR shall not take cognizance of any agrarian controversy unless a certification from the BARC has been submitted stating that the dispute underwent mediation and conciliation without any success of settlement. 2). sec. the issuance of such clearance is delegated to the Regional Directors (DAR Adm. sec. or those that may subsequently be promulgated by the Secretary (DAR Adm. to the Assistant Secretary for Policy. to the Office of the Secretary. except those cases specifically delegated to other DAR officials under existing rules and regulations. Rizal and Quezon (CALABARZON) which are now delegated to the concerned Regional Director. Circ. Flashpoint Cases Flashpoint cases are ALI cases which fall within the jurisdiction of the Regional Director or the Director of the Bureau of Agrarian Legal Assistance (BALA) and determined or certified by the Secretary or the Head Executive Assistant which (a) threatens to disrupt the status quo in a particular area and endanger life and limb as a result of the use of force from either the landowners' side or farmer-beneficiaries' side or other parties. 6 [2000]. the SCS Director shall rule on the case or submit his recommendation for the resolution of the case. dialogue/conciliation/mediation or ocular inspection may be conducted when appropriate. Planning and Legal Affairs Office (PPLAO). (DAR Memo. 13 [1997]) The following are the procedure in the resolution of flashpoint cases: a) Once a case has been certified as a flashpoint case by the HEA or the Secretary. DAR AO 9 (1993). 1 Conversion Jurisdiction over applications for conversion shall pertain to the DAR officials authorized to approve or disapprove applications for conversion of agricultural lands to non-agricultural uses pursuant to Sec. unless . A clarificatory hearing. No. Circ. the Director of the Special Concerns Staff (SCS) shall issue an Order directing the Head of Office/Unit concerned where the case is pending to transmit the entire case records. d) An aggrieved party may file a notice of appeal. O. Laguna. (b) are the subject of massive pickets or which may immediately result in concerted mass actions either in the DAR Central Office or in the field offices or at the site of the conflict. shall be under the jurisdiction of the concerned DAR officials identified therein. except those involving lands five (5) hectares and below situated within the provinces of Cavite. The latter office shall forward the records. No. (DAR Memo. 11). e) The Secretary shall have five (5) working days to decide on the appeal. sec. together with his comments or recommendations. a certification that a case is considered flashpoint shall merely serve to accord utmost priority to the resolution thereof but shall not divest the concerned DAR official of the authority to resolve such cases. No. 6 [2000]. O. No. Batangas. to the Office of the SCS Director within 48 hours from notice of the directive. together with the appeal memorandum. the SCS Director shall issue a directive to all concerned parties to submit their respective position papers and such other documentary evidence within ten (10) days from notice. Other ALI Cases The jurisdiction over other ALI cases shall generally pertain to the Regional Directors. The decision rendered by the Secretary shall be immediately executory notwithstanding any duly perfected appeal. or (c) are of such nature that the Secretary may assign for immediate resolution. 9).Applications for exemption or exclusion under DAR AO 13 (1990). 22 of DAR AO 1 (1999) (DAR Adm. b) Within 24 hours from receipt of the case records. together with the evaluation on appeal made and proposed resolution. c) Within five (5) working days from the conclusion of the investigation/review/evaluation. 13 [1997]) However. DAR AO 3 (1995) and DAR MC 34 (1997) and other pertinent rules and regulations. protest or petition is filed while the claimfolder is pending with LBP. retention or protest against coverage shall have the following effects in so far as land acquisition and distribution are concerned: a) If the application or petition is filed before the issuance of the notice of coverage. 14 of DAR AO 6 (2000) provides that the filing of an application for exemption. 6 [2000]. protest or petition. In this regard. d) National Labor Relations Commission (NLRC) if it involves employer-employee relations. there is an urgent need to protect the national interest. exclusion. O. (Adm. The processing of the claimfolder may be suspended by the PARO if upon proper review and evaluation of the Field Investigation Report (FIR) submitted by the MARO. (DAR Adm. sec. and mediation or conciliation by trained mediators or conciliators. No. protest or petition. the LBP shall continue with the processing of the land compensation claim. Cooperative Development Authority (CDA) if it involves an intra-cooperative dispute. except that the Certification of Deposit (COD) shall not be issued to the PARO until the application. or where the claimfolder has been forwarded by the PARO notwithstanding such application. or Securities and Exchange Commission (SEC) if it involves an intra-corporate dispute. to maintain the status quo and preserve peace and order in the farm subject of a JEE. as amended. in the following cases: a) b) where the dispute will cause serious and irreparable damage to either party or to the agribusiness enterprise. O. To any of the following depending on the principal cause of action: b) c) a) DAR Adjudication Board (DARAB) if it involves interpretation of an agribusiness agreement or an agrarian dispute as defined in Sec. c) where. as may be appropriate. 11) Resolution of Disputes in Joint Economic Enterprises (JEE) The following are the hierarchy of dispute resolution methods involving joint economic enterprises: 1) 2) 3) 4) voluntary methods. . arbitration. No. 2 [1999]) Period in filing actions c) In case the application. conversion. the PARO may forward the claimfolder to the LBP for further processing. 3 (d) of RA 6657. in his judgment. or where there is clear and imminent threat to life or property. it is determined that the subject landholding is in fact exempted or excluded from CARP coverage. and upon personal verification of the allegations in the application. Otherwise. the DAR may proceed with the processing of the claimfolder notwithstanding the pendency of the application. the Secretary may issue such writs or orders. or the Secretary himself has assumed jurisdiction over the case. protest or petition is filed after issuance of the notice of coverage. protest or petition is finally resolved. the notice of coverage shall not be issued until the application or petition is finally resolved. (DAR Adm. b) If the application. 2 [1999]) Sec. protest or petition in accordance with the activities outlined under DAR AO 2 (1996). No. O.specifically directed in the national interest. except in the following instances: a) the protest or petition is based on allegations that subject landholding is exempted from CARP coverage under DAR AO 6 (1994). while in the process of reorganizing and strengthening the DAR. In Machete vs. except those that fall under the jurisdiction of the Secretary of the DAR. the Supreme Court explained in detail the purpose for the creation of the quasi-judicial body. The Supreme Court held that: Section 17 of EO 229 vested the DAR with quasi-judicial powers to determine and adjudicate agrarian reform matters as well as exclusive original jurisdiction over all matters involving implementation of agrarian reform except those falling under the exclusive original jurisdiction of the Department of Agriculture and the Department of Environment and Natural Resources in accordance with law. the protest or petition shall no longer be entertained or shall be summarily dismissed by the MARO or the PARO. or b) upon evaluation of pertinent documents and based on the physical conditions obtaining in the property. Quismundo vs. Streamlining their Procedures and for Other Purposes. the Courts of Agrarian Relations (CAR) had the original and exclusive jurisdiction over agrarian reform matters. 13 of DAR AO 6 (2000). Petitioners moved to dismiss the complaint on the ground of lack of jurisdiction of RTC over the subject matter. This is also clearly provided in Sec. However. Petitioners alleged that the subject matter of the complaint falls squarely within the jurisdiction of the DAR in the exercise of its quasi-judicial powers. The complaint alleged that the parties entered into a leasehold agreement with respect to the private respondent's landholdings in Bohol. except those that fall under the exclusive jurisdiction of the DA and the DENR. Before the creation of the DARAB." the RTCs were divested of their special jurisdiction to try agrarian reform matters. DARAB Cases DAR Adjudication Board (DARAB) The creation of DARAB was mandated under EO 129-A (1987) which aims at reorganizing and strengthening the DAR. private respondent Celestino Villalon filed a complaint for collection of back rentals and damages before the Regional Trial Court against the petitioners. With the passage of BP 129 (1980) or the Judiciary Reorganization Act. DAR AO 3 (1995)and DAR MC 34 (1997) notwithstanding the issuance of the Notice of Coverage. it is determined by DAR that the subject landholding is exempted from CARP coverage pursuant to DAR AO 13 (1990). PD 946 (1976) entitled "Reorganizing the Courts of Agrarian Relations. the CARs were integrated into the RTCs and the jurisdiction of the former was vested in the latter courts. 180). to wit: . CA. the DAR is vested with primary jurisdiction to determine and adjudicate agrarian reform matters and has the exclusive jurisdiction over all matters involving the implementation of agrarian reform. petitions for lifting of notice of coverage shall be filed within thirty (30) days from receipt of the Notice of Coverage by the affected party. The Supreme Court declared the dispute to be agrarian in nature and therefore outside the jurisdiction of the RTC. Failure by the affected party to file the protest or petition within the prescribed period shall be deemed a waiver of his right thereto. entitled "Providing the Mechanisms for the Implementation of the Comprehensive Agrarian Reform Program (CARP).Under Sec. 201 SCRA 609 (1991). Executive Order 129-A. created the Department of Agrarian Reform Adjudication Board (DARAB) to assume the powers and functions with respect to the adjudication of agrarian reform cases" (at 179. Under EO 229 (1987). 50 of RA 6657. If the action is filed after the expiration of the thirty (30)-day period. Court of Appeals 250 SCRA 176 (1995)." gave the CARs original and exclusive jurisdiction over agrarian reform matters. with the promulgation of EO 229 (1987). DAR AO 9 (1993). In an earlier case. The DARAB was created under the Office of the Secretary of the DAR and is given the powers and functions to adjudicate specific agrarian reform cases. 129-A [1987]. de Tangub vs. Ualat vs. In Ualat vs. 265 SCRA 345 (1996). to the end that agrarian reform disputes and other issues will be adjudicated in a just. 131. the Board promulgated the present Rules and Procedures of DARAB whereby adjudicators are specifically designated to adjudicate agrarian reform cases in the regions and provinces. 1988. Supreme Court Administrative Circular No. As earlier noted. 1987. the proceedings therein are summary in nature and the department is not bound by the technical rules of procedure and evidence. 129-A [1987]. 13 of EO 129-A (1987). sec. With respect to the regular courts. 34 of the same EO and Sec. CA. the Assistant Secretary for Legal Affairs. 13). 201 SCRA 609. 614. The members are: two (2) Undersecretaries designated by the Secretary. Judge Ramos .00 with stern warning from the Supreme Court for gross ignorance of law for taking cognizance of an ejectment case despite allegations of tenancy between the parties. 1987. the DAR Secretary has the authority to certify as flashpoint or urgent case. A Secretariat is also constituted to support the Board (Exec.Executive Order No. and three (3) Assistant Secretaries appointed by the President upon the recommendation of the Secretary. only ALI cases but not cases within the jurisdiction of DARAB. the respondent judge of MTC was fined P20. Under Sec. 191 SCRA 885 and Quismundo vs. which took effect on June 15. with the enactment of Executive Order No. the Comprehensive Agrarian Reform Law. 229. Those are within the exclusive jurisdiction of the Secretary of DAR. which provides for the mechanism for the implementation of the Comprehensive Agrarian Reform Program instituted by Proclamation No. 6657.000. Powers and Functions of DARAB DARAB is composed of seven (7) members with the DAR Secretary as its Chairman. CA. Order No. Further. being the administrative agency presumably possessing the necessary expertise on the matter. sec. 49 of RA 6657. The said law contains provisions which evince and support the intention of the legislature to vest in the Department of Agrarian Reform exclusive jurisdiction over all agrarian reform matters. It was established to strengthen the Department (Exec. 13). dated July 22. The said jurisdiction is now vested in the Department of Agrarian Reform. The foregoing holding is further sustained by the passage of Republic Act No. DARAB has no jurisdiction on matters which strictly involve the administrative implementation of RA 6657 and other agrarian laws. Judge Ramos. 229 [1987]). With the implementing authority of the Secretary under Sec. vests in the Department of Agrarian Reform quasi-judicial powers to determine and adjudicate agrarian reform matters. which took effect on August 29. fifteen (15) days after its release for publication in the Official Gazette. Under DAR MC 13 (1997). 615). expeditious and inexpensive proceeding" (at 613. the DARAB was created under the Office of the Secretary of the Department (Exec. 3 (1992)provides: The Court reiterates to all court judges the need for a careful consideration of the proper application of the CARL (RA 6657) to avoid conflict of jurisdiction with the DARAB. The resolution by the DAR is to the best advantage of the parties since it is in a better position to resolve agrarian disputes. 229. The trial court judges are directed to take note of the rulings in Vda. Order No. However. the regional trial courts were divested of their general jurisdiction to try agrarian reform matters. Order No. However. the Board is empowered to delegate its powers and functions to the regional offices of the Department in accordance with the rules and regulations it has promulgated. original and exclusive jurisdiction over: 1) "all petitions for the determination of just compensation to land-owners. confers "special jurisdiction" on "Special Agrarian Courts". This is originally the Barangay Agrarian Reform Council created under EO 229 (1987). together with an ordinary degree of prudence would have prompted respondent Judge to refer the case to the DAR for preliminary determination of the real nature of the parties' relationship. the Supreme Court in the case of Vda. Section 56 of RA 6657. However. de Tangub vs.265 SCRA 345 (1996) Facts: Complainants filed an administrative case against respondent Judge Ramos for taking cognizance of the illegal detainer case filed by their landowner against them. 191 SCRA 885 (1990) held that: Barangay Agrarian Reform Committee (BARC) The Regional Trial Courts have not. 6657 [1988]. . It was shown that the respondent judge had knowledge of a previously filed DARAB case and the fact that the illegal detainer case falls within the exclusive jurisdiction of the DAR. Jurisdiction over said matters are lodged with the Special Agrarian Courts (SACs). on the other hand. Issue: Was the action of Judge Ramos proper? Held: The Supreme Court in finding the respondent Judge liable for ignorance of the law opined: "As can be readily seen from the answer filed by complainants Sabio and Ualat in the civil case. The Court of Appeals and Supreme Court maintain their appellate jurisdiction over agrarian cases decided by DARAB. 57). In this regard. he ought to have realized that there existed a genuine issue involving agricultural tenancy among the parties with respect to the subject property. the respondent judge took cognizance of the illegal detainer case. sec. they alleged the existence of an agrarian tenancy relationship between themselves and the landowner. Representative/s of farmer and farmworker non-beneficiaries. . These matters should have been sufficient to put respondent Judge on notice that complainants were claiming protection under our agrarian laws. (the) Act" (at 890). as required by law" (at 357). RA 6657 changed the nomenclature of BARC from "council" to "committee" and expanded its scope of functions. Representative/s of agricultural cooperatives. This committee is composed of the following: a) c) b) Representative/s of farmer and farmworker beneficiaries. DARAB has no jurisdiction with respect to agrarian matters involving the prosecution of all criminal offenses under RA 6657 and the determination of just compensation for landowners (Rep. . complainants were even represented by a lawyer from the DAR. At that point. which are Regional Trial Courts designated by the Supreme Court — at least one (1) branch within each province — to act as such. CA. however. These Regional Trial Courtsqua Special Agrarian Courts have. Knowledge of existing agrarian legislation and prevailing jurisprudence on the subject. Act No. in the proceedings before respondent Judge. according to Section 57 of the same law. been completely divested of jurisdiction over agrarian reform matters. It is through the organization of the BARCs that the implementation of CARP is envisioned to be truly community based where the public can participate in decision-making and resolution of agrarian reform disputes." and 2) "the prosecution of all criminal offenses under . Despite the separate affidavits of the complainants containing allegation of landlord-tenant relationship. Additionally. disturbance compensation. engaged in the management. foreclosure. preemption and redemption of agricultural lands under the coverage of the CARP or other agrarian laws.EOs 228. 19). amortization payments and similar disputes concerning the functions of the LBP. RA 3844 as amended by RA 6389. cultivation and use of all agricultural lands covered by the CARP and other agrarian laws. . DA Official assigned to the area. DARAB's Jurisdiction over Agrarian Disputes And such other agrarian cases. Representative/s of the Barangay Council. d) Cases involving the annulment or cancellation of lease contracts or deeds of sale or their amendments involving lands under the administration and disposition of the DAR or LBP. PD 27 and other agrarian laws and their implementing rules and regulations. matters or concerns referred to it by the Secretary of the DAR. DENR Official assigned to the area. whether natural or juridical. 1. f) Cases involving the sale. e) Cases arising from or connected with membership or representation in compact farms. h) Sec. and Land Bank of the Philippines representative (Exec. farmers' cooperative and other registered farmers' associations or organizations. b) Cases involving rights and obligations of persons. DAR AO 14 (1990) provides for the guidelines in the formation. mortgage. 229. and 129-A. organization and strengthening of the BARCs. i) h) Cases previously falling under the original and exclusive jurisdiction of the defunct Court of Agrarian Relations under Section 12 of PD 946. correction and cancellation of Certificates of Landownership Award (CLOAs) and Emancipation Patents (EPs) which are registered with the Land Registration Authority. Primary and Exclusive Original and Appellate Jurisdiction of DARAB Sec. except sub-paragraph (Q) thereof and PD 815. 229 [1987]. 19 of EO 229. and the preliminary determination and payment of just compensation. 46 and 47 of RA 6657 defined the BARC functions in addition to those provided under Sec. Representative/s of Landowners. fixing and collection of lease rentals. had the occasion to explain what is an agrarian dispute case for DARAB to try and adjudicate. alienation. g) Cases involving the issuance. Rule II of the DARAB Revised Rules and Procedures provides that the Board has primary and exclusive jurisdiction.d) e) f) g) i) j) Representative/s of non-government organizations (NGOs). Order No. k) DAR Agrarian Reform Technologist assigned to the area who shall act as the Secretary. c) Cases involving the valuation of land. disputes. sec. The Supreme Court. in several cases. Representative/s of other farmer organizations. both original and appellate. related to lands covered by the CARP and other agrarian laws. to determine and adjudicate all agrarian cases including but not limited to the following: a) All agrarian disputes involving the implementation of the CARP under RA 6657. 215 SCRA 86 (1992). (at 99). . Ejectment. as amended. . or factually for the landholder. In the case of Central Mindanao University vs. over lands devoted to agriculture. Section 21. Included in DARAB's jurisdiction is Section 21 of RA 1199. CA.In the case of Machete vs. Cases under the Court of Agrarian Relations An agrarian dispute refers to any controversy relating to tenurial arrangements. Jurisdiction. An agrarian dispute is defined by the same law as any controversy relating to tenurial rights whether leasehold. DARAB has jurisdiction over cases previously falling under the original and exclusive jurisdiction of the defunct Court of Agrarian Relations under PD 946 (1976). directly and exclusively used and found to be necessary for. tenants and other agrarian reform beneficiaries. as amended. it is restricted to agrarian cases and controversies involving lands falling within the coverage of the aforementioned program. For instance. etc. stewardship or otherwise. or a mere dummy of the landowner (De Luna v. changing or seeking to arrange terms or conditions of such tenurial arrangements (at 182). including disputes concerning farm workers' associations or representation of persons in negotiating. whether leasehold. (d). CA. stewardship or otherwise. There is no doubt that the DARAB has jurisdiction to try and decide any agrarian dispute in the implementation of the CARP. Hence. 50 of RA 6657. DARAB. Sec. 221 SCRA 703 [1993]). research and pilot production centers. or a purchaser or transferee of the land. stewardship or otherwise over lands devoted to agriculture (at 100). over lands devoted to agriculture. The Supreme Court held that there exists no tenurial relations between the parties. tenurial arrangements. on the issue of jurisdiction of the DARAB in ordering the petitioner to segregate its 400 hectares land and including it under the CARP for distribution to qualified beneficiaries. the private respondents asked for collection of back rentals and damages before the RTC while the petitioners moved for the dismissal of the case because of lack of jurisdiction. as amended. The subparagraph (Q) exception under this cited provision refers only to cases involving violations of the penal provisions of RA 1199. school sites and campuses for setting up experimental farm stations. of RA 6657 defines the term "agrarian dispute" as referring to any controversy relating to maintaining. Violation. . 17 of EO 129-A is merely a repetition of Sec. The petitioner refused to vacate the land despite the demand of the private respondent. par. — All cases involving the dispossession of a tenant by the landholder or by a third party . among such purposes. except sub-paragraph (Q) thereof and PD 815 (1975). changing or seeking to arrange terms or conditions of such tenurial arrangements. 228 SCRA 503. a sheriff enforcing an execution sale against the landholder. . including disputes concerning farmworkers associations or representation of persons in negotiating. landowner and tenant. one of the issues raised is the jurisdiction of the MTC in taking cognizance of a case involving an agricultural land. tenancy. 250 SCRA 176 (1995). More specifically. maintaining. The Court ordered the transmittal of the case to DARAB and ruled that: Section 3. whether leasehold. It includes any controversy relating to compensation of lands acquired under RA 6657 and other terms and conditions of transfer of ownership from landowners to farmworkers. the other provisions of RA 1199. 21 should be construed to mean a person who is neither landholder or tenant. openly. fixing. whether the disputants stand in the proximate relation of farm operator and beneficiary. it is crystal clear that the jurisdiction of the DARAB is limited only to matters involving the implementation of CARP. tenancy. which provides that: The 'third party' mentioned in the said sec. CA. the Court opined: In Isidro vs. but who acts for. to wit: Under Section 4 and Section 10 of RA 6657. still fall within the jurisdiction of DARAB. tenancy. It does not include those which are actually. secretly. or lessor and lessee (at 510). fixing. par. determine and adjudicate all agrarian cases and disputes. because of the complexity and sensitivity of the case. Rule II of the DARAB Revised Rules and Procedures. He/she shall: 1) 3) 4) Direct supervision over the PARADs. This in turn is envisioned to help in the efficient and successful implementation of the CARP. delegated just compensation cases. However. RARADs and DARAB has original and exclusive jurisdiction in the preliminary determination of just compensation cases which are appealable only to the Special Agrarian Courts. prevent a dispute from going out of the barangay level to DARAB level. 2. UnderDAR AO 8 (1993). BARC's objective is to persuade the contending parties to settle their dispute amicably. 1. 3) . It is the responsibility of the BARC to promote a speedy and cost-free administration of justice. unless for convenience and accessibility and upon agreement of parties such proceedings should be held in another barangay within the municipality or adjacent municipality where the land in dispute is located (DARAB Revised Rules and Procedures [1994] Rule III. The BARC does not act as an adjudicator. the Board has the jurisdiction to review all the decisions of the Adjudicators. 5. it is emphasized that DARAB has no jurisdiction over cases involving annulment or cancellation of orders and decisions of the Secretary. Adjudicate agrarian disputes and land valuation cases. and help the landowners and farmer-beneficiaries commit themselves in complying with their agreements. PARADs cannot handle the case properly. The RARAD is the Executive Adjudicator in his/her region directly responsible to the Board. sec. Appellate Jurisdiction of the Board Under Sec. The RARAD has concurrent original jurisdiction with the PARAD. the PARADs. and those assigned by the Board. Rule II of the DARAB Revised Rules and Procedures provides that the RARAD and the PARAD has concurrent original jurisdiction with the Board to hear.Jurisdiction of the Regional Adjudicator (RARAD) and the Provincial Adjudicator (PARAD) Sec. under DAR MC 7 (1991). In a mediation/conciliation. and incidents in connection therewith. a) c) Hear and handle other cases which cannot be handled by the PARADs: b) d) e) by reason of PARADs disqualification or inhibition. Not all decisions or orders of the PARAD and RARAD are reviewable by the Board. 2) Recommend to the Board the territorial assignments and the disciplinary measures appropriate to the PARADs. the BARC of the barangay where the biggest portion of the property lies. arising with their assigned territorial jurisdiction. Mediation/Conciliation at Barangay Level The BARC does not function as an adjudicator at the barangay level. reiterating Sec. shall have the authority to conduct the mediation or conciliation proceedings. (c) of the Revised DARAB Rules and Procedures. The BARC is mandated to mediate and conciliate agrarian disputes at the barangay level. Where the land in dispute straddles two (2) or more barangays or the parties involved reside in different barangays. define and simplify the issues of the case. The Supreme Court may designate more branches to constitute such additional SACs as may be necessary to cope with the number of agrarian cases in each province. Special agrarian courts are Regional Trial Courts within each province designated by the Supreme Court to exercise special jurisdiction in addition to its regular jurisdiction. The PARO shall conduct mediation and conciliation proceedings and issue a certification to that effect. The lack of a BARC certification is not a ground for dismissal of an action. secs. 6657 [1988]. sec. Special Agrarian Courts (SACs) c) To hold a party in contempt. DARAB can take cognizance of an agrarian dispute even without the BARC Certification if: 1) The dispute does not involve any of the following: a) Valuation lands to determine just compensation for landowners. 56) Sec. exemplary and moral damages and attorney's fees. 758 SCRA 263 (1996). summon witnesses. 1 and 2).Under the DARAB Revised Rules and Procedures. and Cases determined by the Secretary as beyond the ambit mediation/conciliation or compromise. A complainant is given every opportunity to secure said certification. determine the real parties in interest. partnership. Act No. (Rep." . to issue writs and interlocutory orders. c) d) Issue involved is an administrative implementation of agrarian laws and policies. compensatory. and endeavor to settle the case amicably/approve compromise agreements. 2) The required certification cannot be complied with for valid reasons like the non-existence or nonorganization of the BARC or the impossibility of convening it. 57 of RA 6657 provides that the SACs shall have original and exclusive jurisdiction over all petitions for the determination of just compensation to landowners and the prosecution of all criminal offenses under RA 6657. Rule III. the powers and duties of the Adjudicators include but are not limited to the following: a) Personally conduct a hearing. take control of the proceedings. temporary restraining orders. Powers and Duties of DARAB 3) It involves resolving and disposing of preliminary incidents related to the case. Under the DARAB Revised Rules and Procedures. and thresh out preliminary matters. may limit the presentation of evidence to matters relevant to the issues. may limit the right of parties/counsels to ask questions to clarify the points of law at issue or of facts involved. such as motion for the issuance of status quo orders. or a public officer/employee wherein the dispute relates to the performance of his official functions. the Supreme Court held that "any effort to transfer the original and exclusive jurisdiction to the DAR adjudicators and to convert the original jurisdiction of the RTCs into appellate jurisdiction would be contrary to Section 57 of RA 6657 and therefore would be void. In Republic vs. b) To subpoena. and may award actual. employ reasonable means to ascertain the facts of the case. preliminary injunctions and such similar motions necessitating immediate action (DARAB Revised Rules and Procedures [1994]. Court of Appeals. b) One of the parties is a public or private corporation. association or juridical person. examine witnesses. 50. 6657 [1988]. 15 and 20. 4).Judicial Review Orders or Decisions of DAR Secretary The decisions of the DAR Secretary in ALI cases may be appealed to the Office of the President or the Court of Appeals. Book VII of EO 292 (1987) or the Administrative Code of 1987. or as directed by the Secretary (DAR Admin. interpretation of agrarian reform laws or rules and regulations promulgated thereunder. sec. (Rep. sec. entitled "Revised Rules and Regulations on the Conversion of Agricultural Lands to Nonagricultural Uses. implementation. at the option of the appellant. 60) Note: 1. the decision of DAR shall be immediately executory. Revised DARAB Rules [1994]. 1) Notwithstanding an appeal to the Court of Appeals. Revised DARAB Rules [1994]. award or ruling of DARAB on any agrarian dispute or on any matter pertaining to the application." (Sec. DARAB Decisions Any decision. Pursuant to the Memorandum of the President dated 16 April 1999. sec. implementation. Rule XIV. sec. resolution. Rule XIV. award or ruling of the DAR on any agrarian dispute or on any matter pertaining to the application. The DAR shall upon perfection of the appeal transmit the records of the case to the Office of the President. 2(k)). Sec. Act No. Planning and Implementation (CLUPPI) – 2 to the Regional Director shall take effect upon implementation of the DAR reorganization. order. Said appeal shall be perfected by filing with the DAR a notice of appeal." (Sec." provides for a similar definition: "agricultural land use conversion refers to the process of changing the use of agricultural land to nonagricultural uses. 54 of RA 6657 states that any decision. enforcement. Conversion versus Reclassification . sec. enforcement. sec. Act No. also known as the "Agriculture and Fisheries Modernization Act of 1997. serving copies thereof upon the prevailing party and the Office of the President and paying the required fees. (Rep. as implemented by DAR MC 3 (1994) provides that an appeal from the decision/order issued by DAR shall be perfected within fifteen (15) days after receipt of a copy of the decision/order complained of by the party adversely affected. this administrative order serves as the primary guidelines on the conversion of agricultural lands to non-agricultural uses. 36) CHAPTER 7 Land Use Conversion Definition DAR AO 1 (1999)." defines "land use conversion" as "the act or process of changing the current use of a piece of agricultural land into some other use as approved by DAR. or interpretation of this Act and other pertinent laws on agrarian reform may be brought to the Court of Appeals by certiorari. On the other hand. 6657 [1988]. No. 54. order. O. The transfer of jurisdiction over applications for CALABARZON areas from the Center for Land Use Policy. 1) Decisions of Special Agrarian Courts An appeal may be taken from the decision of the Special Agrarian Courts by filing a petition for review with the Court of Appeals within fifteen (15) days from receipt of notice of the decision. 6 [2000]. (Rep. Sec. to the Court of Appeals by certiorari. RA 8435 (1997). Act No. may be brought within fifteen (15) days from receipt of a copy thereof. 6657[1988]. Agricultural lands identified under AO 20 (1992). Title XI. On the other hand. (b) for component cities and third class municipalities. Circular Prescribing the Guidelines to Implement MC 54. 129-A [1982]. RA 6657 [1988[." Under these Guidelines. that agricultural lands distributed to agrarian reform beneficiaries pursuant to RA 6657 shall not be affected by the said reclassification and the conversion of such lands into other purposes shall be governed by Section 65 of said Act. It also includes the reversion of non-agricultural lands to agricultural use. amending or modifying in any manner the provisions of RA 6657. sec. 54. DAR. This misconception has resulted in a lot of conflicts and confusion not only between the two agencies but among other concerned sectors. 3 [13].3]). commercial. five percent (5%): Provided. or industrial purposes." In his commentary. Chapter 1. The proposal to allow local governments to . This is evident in Sec. Pimentel. Agricultural lands already issued a notice of coverage or voluntarily offered for coverage under CARP. The President may. authorize a city or municipality to reclassify lands in excess of the limits cited above (Rep. conversion is defined by the same Memorandum Circular as the "act of changing the current use of a piece of agricultural land into some other use. fifteen percent (15%)." [Id. and (c) for fourth to sixth class municipalities. or Said Act mandates that the reclassification should be made after conducting public hearing and that it shall be limited to the following percentage of the total agricultural land area at the time of the passage of the ordinance: (a) for highly urbanized and independent component cities. ten percent (10%). [1995]. Aquilino Q. a) when the land ceases to be economically feasible and sound for agricultural purposes as determined by the DA. 65). 65 ofRA 6657. 7160 [1991]. 20 (e) of RA 7160 which provides: "Nothing in this Section shall be construed as repealing.DAR's conversion authority is most often seen as synonymous with the power of local government units (LGUs) to reclassify lands within their territorial jurisdiction. 2[2. [1993] Book IV. DA. This percentage ceiling on the land area which the LGUs can reclassify is not absolute. otherwise known as the Local Government Code of 1991. see OP Memorandum Circular No. Sec. as embodied in the land use plan.. commercial. sec. when public interest so requires and upon recommendation of the National Economic and Development Authority (NEDA). sec. as determined by the sanggunian concerned. 4. subject to the requirements and procedures for conversion. This is one section of the Code which evoked a lot of discussion among the members of the Conference Committee. 5[e]. LGUs are mandated to exercise such authority in accordance with MC 54 (1993) of the Office of the President entitled "Prescribing the Guidelines Governing Section 20 of RA 7160. sec. Authorizing Cities and Municipalities to Reclassify Agricultural Lands Into Nonagricultural Uses. "Reclassification" refers to the "act of specifying how agricultural lands shall be utilized for non-agricultural uses such as residential.2]) Under section 20 of RA 7160 (1991) or the "Local Government Code of 1991. the following types of agricultural lands shall not be covered: a) c) b) Agricultural lands distributed to agrarian reform beneficiaries subject to Sec. Act No. 20 [b]). as non-negotiable for conversion. Sen. principal author of the Local Government Code of 1991." (Joint HLURB. sec. further. DILG Memo. Order No. It is distinct from the power of LGUs to reclassify agricultural land under Section 20 of theLocal Government Code. sec. Also. the power of the DAR to approve or disapprove land use conversion applications is exclusive (Exec. industrial. stated as follows: Sanggunian Power to Reclassify Not to Convert. 2[2. On the other hand." a city or municipality may authorize the reclassification of agricultural lands and provide for the manner of their utilization or disposition under the following circumstances: b) where the land shall have substantially greater economic value for residential. 2 (b) (2)). DAR's role in the reclassification process is the issuance of a certification that the lands sought to be reclassified are not distributed or not covered by a notice of coverage or not voluntarily offered for coverage under CARP. to wit: Expropriated Lands Not Subject to DAR Conversion Clearance Agricultural lands expropriated by LGUs pursuant to the power of eminent domain need not be subject of DAR conversion clearance prior to change in use. however. In said case. This certification must be secured by the sanggunian concerned prior to the enactment of an ordinance reclassifying the agricultural land (OP Memorandum Circular No. No. Some legislators. The Supreme Court resolved two (2) separate motions for reconsideration filed by respondents and intervenors of the Court's resolution dated 17 November 1998 as well as their motion to refer the case to the Court en banc.Q. CA.) The case of Fortich.. 4. This was the Court's pronouncement in Province of Camarines Sur vs. It does not embody the Court's determination and is not binding. After the reclassification by the LGU. (Sec. G. Corona. et al. 1996 decision of the Office of the President had already become final and executory even prior to the filing of the motion for reconsideration which became the basis of the said "Win-Win" Resolution. felt that to allow local governments to reclassify land may open the door to a nationwide frustration of the goals of the agrarian reform law. sec." (at 5). to wit: "actions on applications for land use conversion shall remain as the responsibility of DAR". [1993]. v. It should be stressed that the motions in Fortich were denied on the ground that the "win-win" resolution is void and has no legal effect because the decision approving the conversion has already become final and executory. 131457 (19 August 1999) illustrates the confusion between reclassification and conversion. who argued that the central government has no business dictating to the local governments how to classify land within their jurisdiction.R. Congressman Garcia disputed the argument by pointing out that the power he had sought to invest the local governments with was not to convert land for any purpose contrary to the provisions of the Comprehensive Agrarian Reform Law but merely to "reclassify" land. Underscoring supplied. 1999. et al. This is the ratio decidendi or reason of the decision.reclassify land and provide for the manner of their utilization or disposition was made by Congressman Pablo Garcia of Cebu. (A. The Supreme Court stated that "(t)he crux of the controversy is the validity of the "Win-Win" Resolution dated 7 November 1997 of the Office of the President which is "void and of no legal effect considering that the March 29. Province of Camarines Sur vs. a DAR conversion clearance shall still be required prior to actual change of use of the land as explicitly provided in OP Memorandum Circular No. The statement that LGUs have authority to convert or reclassify agricultural lands without DAR approval is merely a dictum or expression of the individual views of the ponente or writer of the Resolution of August 19. a statement was made that LGUs have authority to convert or reclassify agricultural lands without DAR approval. Jr.. The Key to National Development 111). The Local Government Code of 1991. 54. 222 SCRA 173 (1993). The DAR clarified its position on this issue through a Memorandum of the DAR Secretary dated 13 October 1999. Court of Appeals 222 SCRA 173 (1993) . Pimentel. 54(1993). such authority is limited to the applications for reclassifications submitted by the land owners or tenant beneficiaries. . While such delegated power may be a limited authority. commercial or industrial uses. . 360). The CA set aside the order of the trial court allowing the province to take possession and ordered the suspension of the expropriation proceedings until after the submission of the DAR approval to convert the property. . Section 9 of B. Series of 1987. Likewise. Vester. Blg. Blg. The closest provision of law that the Court of Appeal could cite to justify the intervention of the Department of Agrarian Reform in expropriation matters is Section 65 of the Comprehensive Agrarian Reform Law.P. it is complete within its limits. 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. Co. v. 684). which provides: . 129 authorizing the Governor to purchase or expropriate properties owned by the San Joaquins for the establishment of a pilot farm for non-food and non-traditional agricultural crops and a housing project for provincial government employees.. 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 Local Government Code." The rules on conversion of agricultural lands found in Section 4 (k) and 5(l) of Executive Order No. Resolution No. 129-A. The motion was denied and a writ of possession was issued in favor of the province. Moreover. Providence. On appeal with the CA.P. the limitations on the exercise of the delegated power must be clearly expressed. 74 L. the legislature may retain certain control or impose certain restraints on the exercise thereof by the local governments (Joslin Mfg. The CA asked the Office of the Solicitor General to comment to the petition. 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. 50 S Ct. the San Joaquins asked the appellate court to. While those rules vest on the Department of Agrarian Reform the exclusive authority to approve or disapprove conversions of agricultural lands for residential. . The opening. 262 US 668 67 L. ed.ed. . 129 [1988] was promulgated pursuant to Section 9 of B. 1167. which reads: . before they can institute the necessary expropriation proceedings. either in the law conferring the power or in other legislation. The San Joaquins moved to dismiss the complaints on the ground of inadequacy of the price offered.Facts: The Governor of Camarines Sur filed two (2) separate cases for expropriation against Ernesto and Efren San Joaquin pursuant to Sangguniang Panlalawigan Resolution No. 43 S Ct. 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. nullify the resolution issued by the Sanggunian. among others. 281 US 439. 950. Issue: Is DAR approval still necessary before an LGU can expropriate agricultural lands for conversion to nonagricultural use? Held: It is true that local government units have no inherent power of eminent domain and can exercise it only when expressly authorized by the legislature (City of Cincinnati v. 337. It is also true that in delegating the power to expropriate. The Solicitor General stated that the approval of the Office of the President is not needed but the province must first secure the approval of the DAR of the plan to expropriate the lands of petitioners. 44 (1990): . with due notice to the affected parties. RA 6657 provides: Section 65. ceased to be economically feasible and sound for agricultural purposes. hospitals.underscoring supplied). provides that "action on application for land use conversion on individual landholdings shall remain as the responsibility of the DAR. In the case of Roxas v. In effect. Sec. and subject to existing laws. because all of these projects would naturally involve a change in the land use. and other land uses as may be provided for by law. The agency charged with the mandate of approving or disapproving applications for conversion is the DAR. when the land ceases to be economically feasible and sound for agricultural purposes. if the locality has become urbanized and the land will have greater economic value for residential. — After the lapse of five (5) years from its award. may authorized the reclassification or conversion of the land and its disposition. Respondent DAR's failure to observe due process in the acquisition of petitioner's landholdings does not ipso facto give this Court the power to adjudicate over petitioner's application for conversion of its haciendas from agricultural to non-agricultural. pursuant to RA No. underscoring supplied). 41). But to suggest that these are the only instances when the DAR can require conversion clearances would open a loophole in R.R." (at 45-46. 129-A. 249. 817. commercial. the authority of the DAR to approve or disapprove conversion was reiterated by the Court: DAR's authority to allow conversion is not limited only to lands awarded under CARP. . commercial or industrial purposes. Under Sec. No. Series of 1993 of the Office of the President. . 6657 and EO 129-A. (at 46). which every landowner may use to evade compliance with the agrarian reform program." Moreover. it is believed to be the agrarian reform law's intention that any conversion of a private agricultural land to non-agricultural uses should be cleared before hand by the DAR. the DAR is mandated to "approve or disapprove the conversion. 16 December 1999. True. 54. 2d. Authority to Approve/Disapprove Conversion 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. industrial.A. The Court further stated that. Series of 1987 and reiterated in the CARL and Memorandum Circular No.Statutes conferring the power of eminent domain to political subdivisions cannot be broadened or constricted by implication (Schulman v. Conversion of Lands. Being vested with exclusive original jurisdiction over all matters involving the implementation of agrarian reform. 4 and 5 of EO 129-A (1987). Hence. People. schools. That the beneficiary shall have fully paid his obligations.Y. 219 NYS 2d.." It authorizes DAR to "have exclusive authority to approve or disapprove conversion of agricultural land for residential. or the locality has become urbanized and the land will have a greater economic value for residential. it should logically follow from the said department's express duty and function to execute and enforce the said statute that any commercial or industrial property should first be cleared by the DAR. it would then be the Department of Agrarian Reform to scrutinize whether the expropriation is for a public purpose or public use. after five years. without first applying for conversion of the use of the lands with the Department of Agrarian Reform. the DAR's express power over land use conversion is limited to cases in which agricultural lands already awarded have. . Provided. commercial or industrial purposes. G.E. bridges. 2d. No. the DAR upon application of the beneficiary or the landowner. 176 N. 6657. CA. restructuring or readjustment of agricultural lands into non-agricultural uses." Also. (at 179181. etc. 4 of OP MC 54 (1993). "(t)he DAR's mandate over applications for conversion was first laid down in Section 4 (j) and Section 5 (l) of Executive Order No. . As stated in DOJ Opinion No. 10 N. 127876. commercial. Hence. the authority of DAR to approve such conversion may be exercised from the date of the law's effectivity on June 15. No.) Under Sec. 10 of RA 6657 and DOJ Opinion No. and fishpond the effect of which is to exempt the land from CARP coverage. the total area for conversion shall refer to the aggregate area of all applications regardless of the number of applications and the nature of the proposed project where (a) the properties are owned by the same person or entity or the owners of which are represented by the same person or entity. (Underscoring supplied. 6657 in the light of DAR's mandate and the extensive coverage of the agrarian reform program. or other non-agricultural uses on or after the effectivity of RA 6657 on June 15. and Sec. Also. coconut plantation to a memorial park. the foregoing test shall be applied to determine the appropriate approving authority (DAR Adm. poultry. The Regional Director for areas of not more than five (5) hectares. 1988. 44 [1990] requires conversion clearance. This conclusion is based on a liberal interpretation of R. 1988 pursuant to the Local Government Code. O. For purposes of determining the appropriate approving authority. landowners of agricultural lands devoted to coconuts must first secure a conversion clearance from DAR if they want to convert the same to poultry farm or fishpond. 22 [b] and [c]). c) Those to be converted to non-agricultural use other than that previously authorized. 6657 to non-agricultural uses.A. institutional and other non-agricultural purposes. the owner cannot develop the property into a residential subdivision without getting another conversion clearance specifically allowing the residential use of the land. 22 (a) of DAR AO 1 (1999). the following agricultural lands are subject to DAR's conversion authority: c) The Secretary for areas of more than fifty (50) hectares. 1 [1999]. Agricultural lands outside DAR's conversion authority . b) Those to be devoted to another type of agricultural activity such as livestock. commercial. d) Those reclassified to residential. industrial. a) Those to be converted to residential. and (b) the properties are located in the same barangay or adjacent barangays within the same municipality/ies or city/ies.DAR Officials Authorized to Issue Conversion Orders xxx xxx xxx Based on the foregoing premises. industrial. 3 (b) of DAR AO 1 (1999) states that the change in use of land from one agricultural activity to another use which would exempt the land from CARP coverage under Sec. No.g. e. we reiterate the view that with respect to conversions of agricultural lands covered by RA No. if DAR issues a conversion order authorizing the landowner to change the use of the property from agricultural use. except for those highly restricted from conversion which shall be subject to his approval regardless of the area. In case the subject land is adjacent to an area previously issued with conversion order. the following DAR officials shall approve or disapprove applications for land use conversion: a) b) The duly authorized Undersecretary for areas above five (5) hectares but not more than fifty (50) hectares. In short. DAR AO 1 (1990) requires landowners to secure another conversion clearance if the change that will be undertaken is not what has been authorized in a previous conversion order. sec. Scope of Land Use Conversion Under DAR AO 1 (1999). 8435 [1997]. Act No. regardless of whether all or some portions thereof are within areas highly restricted from conversion or within priority development areas for conversion. No. O. c) Highlands or areas located in elevations of 500 meters or above and have the potential for growing semi-temperate and usually high-value crops. DA Adm. The applicant is also required to submit the following additional requirements: (a) a project feasibility study. c) All irrigated lands where water is not available for rice and other crop production but are within areas programmed for irrigation facility rehabilitation by the DA and/or NIA. The conversion of these areas. if at all. d) Lands issued with notice of land valuation and acquisition. as delineated by the DA and/or NIA. areas highly restricted from conversion refer to the following: a) b) Agro-industrial croplands. 1 [1999]. where water is available to support rice and other crop production. e) Environmentally critical areas as determined by the DENR in accordance with law. and (b) environmental compliance certificate. 1 [1999]. sec. the following lands within the SAFDZs are not eligible for conversion for a period of five (5) years starting on 10 February 1998 until 9 February 2003: . O. or lands presently planted to industrial crops that support the economic viability of existing agricultural infrastructure and agro-based enterprises. shall undergo a more stringent process and the applicant must clearly show that conversion is far more beneficial to the community and the public at large. 3 (d) and DOJ Opinion No. [1990]). c) Lands within the Strategic Agriculture and Fisheries Development Zones (SAFDZs) which are subject to the five (5) year moratorium period beginning 10 February 1998 up to 9 February 2003 (Rep. Applications for conversion involving these areas shall not be given due course. areas non-negotiable for conversion are not eligible for conversion. sec. 4 of DAR AO 1 (1999). if within environmentally critical area.The following lands do not require DAR conversion clearance or are not subject to conversion: b) a) Agricultural lands reclassified to non-agricultural uses prior to 15 June 1988 (DAR Adm. d) All agricultural lands with irrigation facilities operated by private organizations. 6 [1998]. and Conversion moratorium under RA 8435 Under RA 8435. (Except as to 5% thereof). Areas highly restricted from conversion Under Sec. No. No. Agricultural lands considered non-negotiable for conversion (DAR Adm. 9. a) Agricultural lands within protected areas designated as such under the National Integrated Protected Areas System including watershed and recharged acquifers. Applications involving areas highly restricted from conversion are deliberated upon by the PARC Land Use Technical Committee and subject to the Secretary's approval regardless of the area. 4). rule 9). 2 (b) and 5 of DAR AO 1 (1999). as determined by the DENR. O. or subject of a perfected agreement between the landowner and the beneficiaries under the voluntary land transfer/direct payment scheme. 44. Irrigable lands not covered by irrigation projects with firm funding commitment. These lands include the following: b) All irrigated lands. Lands non-negotiable for conversion Under Sec. sec. (These lands are subject to DAR exemption clearance). Lands within SAFDZs shall be identified by the DA on the basis of the criteria prescribed in RA 8435. (DAR Memo. sec. 1 [1999]. Five percent (5%) of said lands within SAFDZs may be converted upon compliance with existing laws.6]. Irrigable lands already covered by irrigation projects with firm funding commitments. 7 [d]). 2 [2000]. sec. and SAFDZs refer to Strategic Agriculture and Fisheries Development Zones. Processing of applications is conducted within 13 days from submission of complete set of documentary requirements. series of 1994. No. if at all. Priority development areas for conversion Under Sec. 1 [1. an environmental compliance certificate is not a pre-condition to the approval of the conversion application. rules and regulations. subject to existing laws. agroprocessing and marketing activities to help develop and modernize. it forms part of the conditions of the order of conversion where applicable. shall jointly determine the maximum 5% equivalent to the total area of land eligible for conversion. [1998]. Act No. Applicants for conversion involving socialized and low-cost housing projects are exempt from the posting of cash bond. No. processing and disposition of all applications for conversion for socialized and low-cost housing projects. 6. O. conversion may be allowed. O. with the support of the government. 6 of DAR AO 1 (1999). No. b) Tourism development areas identified by the Department of Tourism as indicated in the current Medium Term Philippine Development Plan. 1 [1999]. Mass Housing Desks shall be created at the CLUPPI which shall be responsible for the receipt. instead. submission of Certification of Eligibility for Conversion from DA and Environmental Compliance Certificate from DENR. They are areas within the Network of Protected Areas for Agricultural and Agro-industrial Development (NPAAAD) identified for production.2). sec. Conversion of agricultural lands within priority development areas requires DAR clearance. 9 [1999]. No.a) c) b) All irrigated lands. (c ). Lands within SAFDZs Lands with existing or having the potential for growing high-value crops. c) Sites identified and proposed to be developed by LGUs into socialized housing projects which are presently used for agricultural purposes. on a case to case basis. The 5-year conversion moratorium is not absolute. (DAR Adm. 7 (b). (DAR Adm. Circular No. d) e) Sites intended for socialized housing projects under EO 184. 8435 [1997]. rule 9. socialized housing projects are considered priority development areas. the following are priority development areas for conversion: a) Specific sites in regional agri-industrial centers/regional industrial centers identified by the Department of Trade and Industry and the DA. DA Adm. 4). upon the recommendation of the Regional and National SAFDZ Committees. the agriculture and fisheries sectors in an environmentally and socio-culturally sound manner (Rep. Also. sec.5. Upon expiration of the moratorium.) Under DAR AO 2 (2000). SHOPC Under present guidelines. O. DAR and DA. the period within which to process and evaluate applications involving lands within these areas is shorter. rules and regulations on land use conversion (DAR Adm. 3) . O. However. Agricultural areas intended for ECOZONE projects pursuant to RA 7916. sec. d) Under the previous guidelines. in accordance with Section 65 of RA 6657: b) the locality has become urbanized and the land will have greater economic value for residential. when the land has ceased to be economically feasible and sound for agricultural purposes. Cash Bond Cash bond is posted by the applicant upon filing of the application equivalent to two point five percent (2. industrial or other non-agricultural purposes. and The area to be converted is not the only remaining food production area of the community.5%) of the total zonal value of the land. Bonds and Disturbance Compensation Under the present guidelines. 8 of DAR AO 1 (1999). It is evident that the thrust of DAR conversion guidelines is to give the department sole and exclusive prerogative to decide on conversion applications. the following criteria shall guide the resolution of applications for conversion: 1) Conversion may be allowed if the land subject of application is not among those considered nonnegotiable for conversion. It is not an indispensable condition. Areas with low productivity will be accorded priority for conversion. O. e) Sufficient disturbance compensation shall be given to the farmers whose livelihoods are negatively affected by the conversion. No. The conversion shall not hamper the availability of irrigation to nearby farmlands. It is refundable upon issuance of the order of conversion or convertible into performance bond at the option of the applicant (DAR Adm. applications for conversion involving socialized and low-cost housing projects shall be processed for a period of thirteen (13) working days upon receipt of the completed application pursuant to Sec. sec. however. 4) Conversion may be allowed when the environmental impact assessment or initial environmental examination. as may be appropriate. . sec. Certifications issued by other agencies are given persuasive effect but the final determination belongs to the DAR. 2) a) Conversion may be allowed under the following cases. conversion may be allowed if the land has been reclassified by the LGUs to nonagricultural uses. That the land has been reclassified to non-agricultural use as per zoning certification remains one of the factors to consider in resolving whether to approve or disapprove an application for conversion. No. but said criterion has been deleted under the present guidelines. They are also required to pay disturbance compensation in appropriate cases. 1 [1999]. applicants are required to post two (2) kinds of bonds: cash bond and performance bond. commercial. or 3) Conversion of lands within SAFDZs shall take into consideration the following factors: b) c) a) The conversion is consistent with the natural expansion of the municipality or locality. 1 of EO 258 (2000). Thus. conversion may be allowed even if the property has not yet been reclassified to non-agricultural use if the conditions under RA 6657 or RA 8435 warrant the same. (DAR Adm. O. 4) Criteria for Conversion Under Sec. for the approval of the application.Likewise. shall have determined that it shall not adversely affect air and water quality and the ecological stability of the area. 15). as contained in the approved physical framework and land use plan. 2 [2000]. Sec. Any agreement for the payment between them shall be subject to DAR's approval and compliance monitoring (DAR Adm. However. sec. farmworkers. mistake or excusable neglect. O. 15 [b]). No. if the oppositor is an identified beneficiary under the agrarian reform program of the land applied for and who failed to file a written protest within the said period due to fraud. sec. . 15 [c). farmworkers or occupants and the landowner or developer but it should not be less than five (5) times the average of the gross harvests on their landholding during the last five (5) preceding calendar years. 15 (a)). tenants. sec. accident. No. last par. he shall have the right to intervene at any time during the pendency of the application. 1 [1999]. under the present conversion guidelines. farmworkers. irrevocable letter of credit. sec. (DAR Adm. as may be appropriate. Performance Bond Performance bond is posted in favor of DAR to guarantee the payment of the amount of security as penalty in the event it is established that the applicant/developer is in default of their obligations under the order of conversion. The protest must be in writing and filed within fifteen (15) days from the date of posting of the Notice of Application. 1 [1999]. 1 [1999]. No. bank draft equivalent to 2. sec. 18 and 19). 1 [1999]. etc. in such amounts or under such terms as may be mutually agreed upon between the affected tenants. 1 [1999]. Protests and Oppositions In case of disagreement between the parties. the issue on disturbance compensation may be brought by either of them before the DAR Adjudication Board for resolution (DAR Adm.bona fide residents of adjoining properties or communities against the application with the DAR Regional Office or Central Office. shall be paid by the landowner or developer. 15 [a]). No. O. No. No. or The performance bond shall be forfeited in favor of the government in case of violation of the conditions of the conversion order such as non-payment of disturbance compensation. O. 1 [1999]. 1 [1999]. or b) c) Surety equivalent to 15% of the total zonal value of the land (DAR Adm. No. O. However. failure to develop or complete the project within the period prescribed. O. manager's check. 21 of DAR AO 1 (1999) states that the DAR admits protest or opposition against any application for conversion which is resolved by the approving authority simultaneously with the application. as appropriate (DAR Adm. Bank guarantee equivalent to 5% of the total zonal value of the land. No. It shall be effective for the duration of the project approved under the conversion order. It may be filed by any person who will be displaced or directly affected by the proposed land use conversion such as occupants. disturbance compensation is given only to de jure tenants. O. cashier's check.5% of the total zonal value of the land. The performance bond shall be in the form of either of the following: a) Cash. sec. 15 [c]). O. O. sec. 15. in cash or in kind or both. or bona fide occupants who will be affected by the conversion of the property to non-agricultural uses are all entitled to disturbance compensation (DAR Adm.) Disturbance Compensation Under RA 3844. Disturbance compensation. tenants.The cash bond is forfeited in favor of the government in the event actual conversion activities are undertaken by the applicant prior to approval of the application for conversion (DAR Adm. sec. 1 [1999]. 15). identified beneficiaries. Payment of disturbance compensation or compliance with the terms and conditions of the approved agreement must be made within sixty (60) days from the date of approval of the application for conversion (DAR Adm. it was held that an agricultural leasehold cannot be established on land which has been converted to residential use. Fifth. Development of the land within a specific period. a new application must be filed which must go through the process of conversion again. In case the landowner decides to use the land for purposes other than that authorized. the conversion of an agricultural land to non-agricultural uses is limited to the specific use of the land authorized in the order. . 23 of DAR AO 1 (1999) also provides for the following effects: d) Withdrawal or cancellation of the order for misrepresentation of facts integral to its issuance or for violation of the rules and regulations on land use conversion. require that the period of development should not extend beyond five (5) years from the issuance of the order except as authorized by the Secretary or the approving official on meritorious grounds. O. Effects of Approval of Conversion Application e) Existence of proof that conversion was resorted to as a means to evade CARP coverage and to dispossess the tenant farmers of the land tilled by them. Illegal/premature conversion. the tenants.Protests or oppositions may be filed on the following grounds: a) c) b) The adverse effects or the displacement to be caused by the proposed conversion far outweigh the social and economic benefits to the affected communities. he may be charged for unauthorized conversion (DAR Adm. 1 [1999]. Effect on tenants. Payment of disturbance compensation within 60 days from issuance of the order. 40 (d) and 2 [y]). The area applied for is non-negotiable for conversion. the use authorized in the order of conversion shall be annotated on the title of the subject property. sec. 174 SCRA 398.. the conditions of the order are binding not only upon the applicant but also upon successors-in-interest of the property. 1 [1999]. Fourth. Upon payment of disturbance compensation or compliance with the terms and conditions of the agreement for disturbance compensation. farmworkers or occupants of property Sixth. Second. tenancy. however. sec. in favor of the landowner or developer. farmworkers or occupants are expected to give up all their rights over the land such as possession. O. In Gonzales v. Grounds for Revocation/Withdrawal/Cancellation of Conversion Order Third. No. all conversion orders are subject to the schedule indicated in the detailed site development plan and work and financial plan submitted by the applicant. No. d) Misrepresentation or concealment of material facts. 20) An order of conversion is generally subject to the following conditions: a) c) b) Posting of a notice of conversion in a conspicuous place. (DAR Adm. CA. etc. duly authorized representatives of DAR should be allowed free and unhampered access to the property subject of the conversion order for compliance monitoring purposes. First. The rules. Sec. Otherwise. the order is without prejudice to ancestral domain claims of indigenous peoples pursuant to RA 8371. b) The petition must be filed with 90 days from discovery of such facts but not beyond the period for development stipulated in the order if the basis is non-compliance with the conditions of the order.Under Sec. The period within which to file the petition varies depending on the ground raised by the petitioner: Any other violation of relevant rules and regulations of DAR. the land subject thereof shall revert to the status of agricultural lands and shall be subject to CARP coverage as circumstances may warrant. Prohibited Acts and Omissions by Landowners under RA 6657 Sec. the prosecution of these acts does not preclude the DAR from pursuing administrative cases against the offenders for the same acts or on the basis of the same facts. 35 of DAR AO 1 (1999). and/or Non-compliance with the agreement on disturbance compensation. or any other violation of relevant rules and regulations of DAR. Other acts and omissions in violation of agrarian laws are also administratively sanctioned. 73 are subject to administrative regulation or sanctions. In the event the conversion order is cancelled or withdrawn. CHAPTER 8 Prohibited Acts and Omissions Preliminary Considerations RA 6657. 1. (Sec. 37. 73 of RA 6657 enumerates acts and omissions which are criminally punishable. the petition shall be filed with the Secretary at any time. sec. a) The petition must be filed before the approving authority within 90 days from discovery of facts which would warrant such cancellation but not more than one year from issuance of the order if the basis is misrepresentation or concealment. Order No. AO 1 (1999)). the DAR is vested with the power to establish and promulgate operational policies. RA 8435 and RA 3844 are the primary sources of prohibited acts and omissions under the agrarian reform program which are criminal in nature and punishable with fine and imprisonment. conversion to use other than that authorized. c) Where the ground is lack of jurisdiction. Moreover. Non-compliance with the conditions of the order of conversion. rules and regulations for agrarian reform implementation (see Exec. Sec. or non-compliance with the agreement on disturbance compensation. or both. Conversion to use other than that authorized in the conversion order. Lack of jurisdiction of the approving authority. Ownership and Possession of Land Beyond Allowable Limits . a petition for cancellation/revocation/withdrawal of the order of conversion may be filed at the instance of DAR or any aggrieved party on the following grounds: a) c) b) d) e) f) Misrepresentation or concealment of facts or circumstances material to the grant of conversion. 50 of RA 6657vests DAR with the primary jurisdiction to determine and adjudicate agrarian reform matters and exclusive original jurisdiction over all matters involving the implementation of agrarian reform. 4 [c]). 129-A (1987). As the principal agency tasked with the implementation of CARP. As a rule. Other provisions of RA 6657 proscribing certain acts and omissions not included in Sec. 6 of RA 6657 also provides that the sale. sale. Part I (B) ofDAR AO (1989) provides that the sale or disposition of agricultural land is valid to the extent that the total landholding of the transferee as a result of the said acquisition does not exceed the landholding ceiling. The date of the registration of the deed of conveyance in the Register of Deeds with respect to titled lands and the date of the issuance of the tax declaration to the transferee of the property with respect to unregistered lands. shall be conclusive for the purpose of this Act. except in the case of collective ownership by farmer beneficiaries. or change the nature of the land. conveyance or change of the nature of lands outside urban centers and city limits either in whole or in part after the effectivity of this Act. is not totally void. management contract or transfer of possession of private lands executed by the original owner in violation ofRA 6657 shall be null and void. for the purpose of circumventing the provisions of this Act. The elements of the administrative offense is similar to that defined under Sec. The sale or disposition. transfer or conveyance of the land." Elements: a) c) Offender is any person. lease. 73 (e). DAR AO 1 (1989) provides for administrative sanctions for the sale. disposition. c) d) and e) The land must be outside of urban centers and city limits. b) Person owns or possess agricultural lands in excess of retention limit or award ceilings. Sec. transfer. The transaction or the change of the nature of the land may be of the whole or a portion of the land. 3. 73(e) of RA 6657 also prohibits "The sale. The person either effects the ii.Sec. conveyance of lands outside urban centers. 73 (c) of RA 6657 penalizes "The conversion by any landowner of his agricultural land into any non-agricultural use with intent to avoid the application of this Act to his landholdings and to dispossess his tenant farmers of the land tilled by them. of agricultural lands in excess of the total retention limits or award ceilings by any person. however. transfer. Transfer. Illegal/Premature/Unauthorized Conversions Illegal Conversion Sec. Conveyance or Change in the Nature of the Land The purpose of ownership or possession is to circumvent the provisions of RA 6657. natural or juridical." CIHTac Elements: a) b) The offender is any person. natural or juridical. as the case may be. except those under collective ownership by farmer-beneficiaries. Elements: a) . Sec. 73 (a) of RA 6657 prohibits "The ownership or possession." The land is agricultural land. and 2) Prohibited Sale. i. The transaction or the change of the nature of the land was effected after 15 June 1988. " Thus. Actual development activity is undertaken on the land. and The development activity modifies or alters the physical characteristics of the land. or the change of the nature of lands outside urban centers and city limits either in whole or in part after the effectivity of RA 6657. The intention of the conversion is to avoid the application of RA 6657. to dispossess the farmers of the land tilled by them." Elements: a) c) b) d) e) f) The land is agricultural land. and Act was committed after 15 June 1988. Elements of the First Type: a) c) DAR AO 1 (1999) provides a more expansive definition of illegal conversion. there are two (2) ways of committing illegal conversion. . to dispossess tenant farmers tilling the land. and i. b) He/she converts his/her agricultural land into any non-agricultural use without authority or DAR clearance. 2 (g) of DAR AO 1 (1999) defines illegal conversion as "the conversion by any landowner of his agricultural land into any non-agricultural use with intent to avoid the application of RA 6657 to his landholding and to dispossess his tenant farmers of the land tilled by them. in whole or in part. He/she changes the nature of the agricultural land. Offender is the land owner. Land is located outside urban centers and city limits. Premature Conversion Sec. of the said Act. the undertaking of any development activity. and Elements of the Second Type: a) c) b) d) ii. the results of which modify or alter the physical characteristics of the agricultural lands to render them suitable for non-agricultural purposes without an approved order of conversion from the DAR. Sec. . 11 of RA 8435 penalizes ". under the administrative rule. The offender may be any person. There is no approved order of conversion from the DAR. as provided in Sec. . ii. and The offender is the landowner. Offender is the landowner or any other person.b) c) d) There are acts committed converting the use of the land into non-agricultural use. The intent is to: avoid the application of RA 6657. i. The land development renders the land suitable for non-agricultural purposes. 73 (c) and (e) respectively. e. Sale. unauthorized conversion is not a criminal act but is merely administratively sanctioned.Unauthorized conversion Unlike illegal and premature conversions. landowner.. Transfer. Offender is any person. or changing the use of the land other than that allowed under the order of conversion issued by DAR. and The act is motivated by the design to circumvent the provisions of R. landowner." There are. 73 (f) of RA 6657 prohibits "The sale. 2 (w) of DAR AO 1 (1999) defines unauthorized conversion as "the act of changing the current use of the land from agricultural (e. i.g. Conveyance of Rights Acquired as a Beneficiary Sec. 6657. i.. Prohibited Acts and Omissions by Beneficiaries under RA 6657 1. or any other person. transfer or conveyance by a beneficiary of the right to use or any other usufructuary right over the land he acquired by virtue of being a beneficiary. transfers or conveys the right to use or any other usufructuary right over his land. Sec.A. Non-compliance with the conditions set forth in the conversion order.e. Sec. and c) The person commits the land to a purpose other than that allowed under the order of conversion. b) The subject land is granted an order of conversion for its commitment to non-agricultural purposes. The person changes the current use of an agricultural land into another agricultural purpose. b) Offender sells. two (2) ways to commit unauthorized conversion. developer or any other person.g. 35 of DAR AO 1 (1999) also provides for administrative sanctions against certain acts in connection with the grant of conversion application by landowners or their duly authorized representatives. d) The subject land was acquired by him/her by virtue of being a beneficiary. and In addition to the foregoing. riceland) to another agricultural use (e. Non-compliance with the agreement on disturbance compensation. Elements of the Second Type: a) The change of use was done without an order of conversion from DAR. Elements of the First Type: a) c) b) and Offender is any person. in order to circumvent the provisions of this Act." Elements: a) c) The offender is an agrarian reform beneficiary. These include the following: a) c) b) Misrepresentation or concealment of material facts in conversion application. livestock) without an order of conversion from DAR. thus. developer. . i. Sec. as defined under PD 1683 (1980). 1 of DAR MC 19 (1996). Offender commits acts which cause substantial and unreasonable damage to the land. 3. No. In the case of lands awarded under CARP. Part I (4) of DAR MC 19 (1996) provides that the "[s]ale. c) The subject land was acquired by him/her by virtue of being a beneficiary under RA 6657 or PD 27/EO 228. Item (A) of DAR AO 2 (1994) defines misuse of the land as "any act causing substantial and unreasonable damage on the land. Misuse or Diversion of Financial Aid and Support Services d) The act is motivated by the design to circumvent the provisions of RA 6657. Provided that lands acquired under PD 27/EO 228can be transferred upon full payment of amortizations. Par. It also includes the act of knowingly planting. transfer. 73 ofRA 6657. lease and other forms of conveyance by beneficiary of the rights to use or any other usufructuary right over the land acquired by virtue of being a beneficiary. including the forfeiture of the land transferred to him or lesser sanctions as may be provided by the PARC without prejudice to criminal prosecution. Elements: a) b) The beneficiary was granted financial aid and other support services. if the lands has been acquired under PD 27/EO 228. or diverts such aid or services for other purposes. in circumvention of the provisions of Sec. b) He/she sells. Such act causes the deterioration and depletion of the soil fertility and improvements thereon. Misuse of the land is administratively sanctioned under DAR MC 19 (1996). Misuse of the Land ii. transfers or conveys the right to use or any other usufructuary right over his land without legal basis. and 2. Elements of the First Type: a) c) b) Offender is a grantee of land awarded through CLOA or EP.Relatedly." This is reflected in Item A. 4. Sec. and ." Under the definition. Part III. the land can be transferred ten (10) years after the registration of the CLOA. ownership may be transferred upon full payment of amortization by the beneficiary. there are two ways of committing this offense. PD 27 and other agrarian law" is a prohibited act. raising of any plant which is the source of a dangerous drug. growing. However. 22 of RA 6657 provides that any beneficiary guilty of negligence or misuse of the land or any support extended to him shall forfeit his right to continue as such beneficiary. Elements: a) The offender is an agrarian reform beneficiary. and causing the deterioration and depletion of the soil fertility and improvements thereon. 37 of RA 6657 provides that the "misuse or diversion of the financial and support services provided the beneficiary shall result in sanction against the beneficiary guilty thereof.PD 27 and other agrarian laws. The beneficiary either: misuses the financial aid and support services. till. 22 of RA 6657 and other agrarian reform laws is administratively sanctioned under Item A (3). Elements: a) The offender is a beneficiary. 22 of RA 6657 provides that any beneficiary who is guilty of negligence of the land extended to him shall forfeit his right to continue as such beneficiary. The beneficiary fails to pay the landowner amortization for three (3) consecutive months. b) Offender intentionally made false statements respecting a matter of fact in his application for qualification as an ARB under RA 6657 or any other agrarian laws. and 5. Continuous Neglect or Abandonment of Awarded Lands Offender is a grantee of land awarded through a CLOA or EP. Part III. The beneficiary acquired the land by virtue of Voluntary Land Transfer or Direct Payment Scheme. together with his farm household. Material Misrepresentation of Qualifications Such failure or refusal continue for a period of two (2) calendar years. grows or raises any plant which is the source of dangerous drug as defined in PD 1683. and b) The beneficiary willfully fails or refuses to cultivate. . Part I. till or develop to produce any crop the land awarded him. RA 6657 which states that a beneficiary whose land has been foreclosed shall thereafter be permanently disqualified from becoming a beneficiary. The material misrepresentation of qualifications provided under Sec. and Failure is due to reasons other than force majeure or fortuitous events. b) He knowingly plants.Elements of the Second Type: a) Sec. or to use the land for any specific economic purpose continuously for a period of two calendar years. Item (B) of DAR AO 2 (1994) defines neglect or abandonment as the "willful failure of the ARB. except in cases of fortuitous events and force majeure" is administratively sanctioned." Elements: a) c) The offender is an agrarian reform beneficiary. 26. Default and Failure in the Payment of Amortization to Landowner Part I. or develop his land to produce any crop. Elements: a) c) b) d) Offender is an ARB. item A(1) of DAR MC 19 (1996) provides that "default in the obligation of the ARBs to pay the aggregate of three (3) consecutive amortizations to the landowner in the case of awarded lands under voluntary land transfer/direct payment scheme. and 6. 4. The administrative rule is based on Sec. to cultivate. A (5) of DAR MC 19 (1996) provides that "continuous neglect or abandonment of the awarded lands over a period of two (2) years as determined by the Secretary or his authorized representative" is subject to administrative sanctions. c) The misrepresented fact was material to the determination of his qualification to become a beneficiary. Part I of DAR MC 19 (1996). The beneficiary has expressly or impliedly waived his rights over the land.Similarly." Elements: b) 8. threat. the right of possession thereof either through the following acts: i. intimidation. and 7. 9 of MC 19 (1996) treats the waiver of rights to awarded lands by a beneficiary as an administrative offense. item A. except in the case of fortuitous events and force majeure. 73 (b) of RA 6657 provides that "The forcible entry or illegal detainer by persons who are not qualified beneficiaries under this Act to avail themselves of the rights and benefits of the Agrarian Reform Program" is a prohibited act that is criminally punishable. ii. Prohibited Acts and Omissions by Other Persons under RA 6657 1. Elements: a) Offender is any person who is not qualified to become an agrarian reform beneficiaries. no. or legal representatives or any assigns of the said owner. or stealth. . FB's Surrender of Awarded Lands to Landowner or Other Non ARBs. Elements: a) b) Offender is a beneficiary. Failure is due to reasons other than force majeure or fortuitous events. item A (10) of MC 19 (1996). or unlawfully refusing to vacate the land after the right to hold possession thereof has expired. Offender surrenders land awarded him to the landowner or other non-beneficiaries. and Sec. Forcible Entry and Unlawful Detainer Such surrender is without legal authority or clearance from DAR. 9. strategy. by entering the land of another by force. and The surrender by a beneficiary of his awarded lands to landowner or other non-ARBs is penalized under part I. Failure to Pay Amortizations to LBP Waiver of Rights to Awarded Lands Part I. the failure to pay amortizations to LBP is penalized under DAR MC 19 (1996) which states that "[f]ailure of the ARBs to pay at least three (3) annual amortizations to the LBP in the case of awarded lands under the Compulsory Acquisition (CA) or Voluntary Offer to Sell (VOS). c) a) The beneficiary is an awardee of a land acquired through the Compulsory Acquisition or Voluntary Offer to Sell. b) He/she deprives the owner. Elements: a) c) b) Offender is a beneficiary. The beneficiary fails to pay the LBP at least three (3) annual amortization. " Failure to comply with this provision is criminally punishable under Sec. natural or juridical. Elements: a) The offender is the landowner or agricultural lessor. Elements: a) c) b) 3. 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. 7 of RA 3844. c) The intention of the acts is to avail themselves of the rights and benefits of the Agrarian Reform Program. Unlawful Disposition of Lessee He effects the recording of the sale of the land subject of an agricultural lease. 73 (d) of RA 6657 penalized the "[w]illful prevention or obstruction by any association or entity of the implementation of the CARP. 13 of RA 3844 states that "[n]o 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. as tenant. 167(1) of RA 3844. the manager or person who has charge of the management or management of the property or in his default. Offender dispossess the agricultural lessee of his landholding. 2. Should the agricultural lessee be dispossessed of his landholding without authorization from the Court." Elements: a) b) Offender may be a landowner.Sec. and Sec. 167(1) of RA 3844 penalizes the commission by an agricultural lessor of the act defined under Sec. or in case of juridical persons. Obstruction and Prevention of CARP Implementation Prohibited Acts by Agricultural Lessees and Lessor under RA 3844 RA 3844 enumerates the criminal acts and omissions by agricultural lessees and lessors. beneficiary or any other person. 31(1) of RA 3844 provides that it shall be unlawful for the agricultural lessor to "dispossess the agricultural lessee of his landholding except upon authorization by the Court under Section thirty-six. and The person commits acts to prevent or obstructs the implementation of the CARP. Offender is an agricultural lessor. natural or juridical. and Sec. who induces another. Inducement to Execute or Enter into a Share Tenancy Contract Dispossession is without authorization from the Court. 31 of RA 3844. c) Such recording was effected without the necessary Affidavit by vendor that he has given prior written notice of the sale to the agricultural lessor as required by Sec. to execute or enter into a share tenancy contract with himself or with another in violation of this Code shall be . Unlawful Recording of Sale in the Registry of Property Subject to Right of Redemption Sec. By Agricultural Lessor 1." Sec. b) 2. 167(2) of RA 3844 provides that "Any person. the person acting in his stead. advisers and helpers complete freedom to enter and leave the farm. shall be punished by a fine not exceeding one thousand pesos or imprisonment of not more than one year. or both. to wit: "The farm workers shall also have the right to engage in concerted activities for the purpose of collective bargaining and other mutual aid or protection. join or assist farm workers' organizations of their own choosing for the purpose of collective bargaining through representatives of their own choosing: Provided." . partnership or association. civil law lessee." Elements: a) Offender is any person. For the purpose of this and the preceding Section. and b) Offender induces another person." Sec. That this right shall be exercised in a manner as will not unduly interfere with the normal farm operations. 167 (4) of RA 3844 penalizes "Any person who willfully violates the provisions of Sections forty and fortyone of this Code shall be punished by a fine of not less than one hundred pesos nor more than one thousand pesos or by imprisonment of not less than one month nor more than one year. In case of juridical persons. b) He/she knowingly makes untruthful statements on a material matter in an affidavit required for the registration of a sale of land subject to right of pre-emption as required under Sec. the person acting as such when the violation took place shall be criminally responsible. in his default. organizers.punished by a fine not exceeding five thousand pesos with subsidiary imprisonment in accordance with the Revised Penal Code: Provided. as tenant. to execute or enter into a share tenancy contract with himself or another in violation of RA 3844. in the discretion of the court. Acts Violating Farmworker's Rights to Self-Organization and to Engage in Other Concerted Activities Sec. agricultural lessor or any person." 5. it shall be the duty of the farm employer or manager to allow the farm workers. RA 3844 Sec. natural or juridical. and provides that "the farm workers shall have the right to self-organization and to form. 13 of RA 3844. the manager or. in his default. the landowner must execute an affidavit that written notice of the sale or transfer was made to the agricultural lessor as required under Sec. If any violation of Sections forty and forty-one of this Code is committed by a corporation. Individuals employed as supervisors shall not be eligible for membership in farm workers' organizations under their supervision but may form separate organizations of their own. Elements: a) Offender is the landowner. 13 of RA 3844 requires that prior to the registration of the sale or transfer of land in the Registry of Property. labor leaders. the person acting in his stead shall be liable. plantation or compound at the portion of same where said farm workers live or stay permanently or temporarily. or both such fine and imprisonment. 167(2) of RA 3844 provides "Any person who executes an affidavit as required by Section thirteen of Chapter I. That the execution of a share tenancy contract shall be considered prima facie evidence of such inducement as to the owner. in the discretion of the court. 7 of RA 3844. the manager or the person who has charge of the management or administration of the property. and 4. shall be liable under this Section. or in his default. Making Untruthful Statements in Affidavit Required under Sec. usufructuary or legal possessor. Sec. 40 of RA 3844 recognizes the farmworkers' right to self-organization. 41 of RA 3844 likewise recognizes the right of farmworkers to engage in concerted activities. the person acting in his stead." Sec. knowing the contents thereof to be false. the manager or the person who has charge of the management or administration of the property or. In case of juridical persons. 13. d) The cultivation of the other landholding is without the consent of his first lessor. 42 of RA 3844 protects the farmworkers right to a minimum wage and provides that "[n]otwithstanding any provision of law or contract to the contrary. RA 3844 or determined by the Minimum Wage Board.50 a day for eight hours' work: Provided." Elements: a) Offender is an agricultural lessee. and 2. upon conviction thereof. be increased by the Minimum Wage Board as provided for in Republic Act Numbered Six hundred and two. however. the right of farmworkers to self-organization under Sec. 43. b) Offender fails or refuses to pay the farmworker the minimum daily wage as set in Sec." Elements: a) Offender is a landowner or any other person. Sec. or the right to engage in concerted activities as defined under Sec. If any violation of the provisions of Section forty-two of this Code is committed by a corporation. in his default. Unlawful Sublease of Leased Land by Lessor . or upon second conviction. Cultivation of Another Farmland without Consent of Lessor Sec. 27 (1) of RA 3844 provides that it shall be unlawful for an agricultural lessee "[t]o 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 first entered into household. Sec. farm workers in farm enterprises shall be entitled to at least P3. the manager or. Offender commits acts which impair or prevent the exercise of Sec. 41 of RA 3844. to imprisonment of not more than one year or both such fine and imprisonment." 6. agricultural lessor or any person.Elements: a) b) Offender is the landowner. and By Agricultural Lessees 1. 27 of RA 3844. 167 (5) of RA 3844 provides "Any person who willfully violates the provisions of Section forty-two of this Code shall. Acts Violative of the Right of Farmworkers to a Minimum Wage ii. That this wage may. if the first landholding is of sufficient size to make him and the members of his immediate farm household fully occupied in its cultivation. 167 (1) of RA 3844 penalizes the commission by agricultural lessees of the prohibited acts under Sec. be subject to a fine of not more than two thousand pesos. the person acting as such when the violation took place shall be criminally responsible. c) He contracts to work another landholdings belonging to a different agricultural lessor or acquires and personally cultivate an economic family-size farm. b) The land leased by him is of sufficient size to make him and the members of his immediate farm household fully occupied in its production. in the discretion of the court. i. 40 of RA 3844. partnership or association. and 31 (1) of RA 3844 Inducement to Execute or Enter into a Share Tenancy Contract (Sec. (Sec. at the discretion of the court. 167 [2]. or both. RA 3844) Acts Violating Farmworker's Rights to Self-organization and to Engage in Other Concerted Activities (Sec. Sec.000.00). RA 8435) Violation of Sec. RA 6657) Fine of not less than one hundred pesos nor more than one thousand pesos or by imprisonment of not less than one month nor more than one year. part VI of DAR AO 5 (1997). RA 3844) (Sec. That he employs as sublessee on his landholdings. he may employ laborers whose services on his landholdings shall be on his account.00) and not more than fifteen thousand pesos (P15. in the discretion of the court (Sec. 27 (b) of RA 3844 declares that it shall be unlawful for an agricultural lessee "[t]o employ a sub-lessee on his landholding: Provided. RA 3844) Fine not exceeding one thousand pesos or imprisonment not exceeding one year or both in the discretion of the court (RA 3844. 167 [2]. . 27. 74. 11. (Sec. however. RA 3844 the discretion of the Court (Sec. and The penalties for the prohibited acts and omissions which are criminal in nature are as follows: Act or Omission Penalty Prohibited Acts or Omissions Imprisonment of not less than one (1) month to not under RA 6657 more than three (3) years or a fine of not less than one thousand pesos (1. RA 6657). 167 (3). or both. RA 6657) Premature Conversion under RA 8435 Imprisonment of two (2) to six (6) years. at the discretion of the court." This prohibition is reiterated in Item B(1).000. Penalties for Violation The reason for the sub-contracting is other than illness or temporary incapacity. 167[4]. Elements: a) c) b) Offender is an agricultural lessee. 13. 13. or both. Sec. in Sec. That in the case of illness or temporary incapacity.Sec. and an accessory penalty of forfeiture of the land and any improvement thereof. 167 [4]. 167 (3).) Fine not exceeding five thousand pesos with subsidiary imprisonment in accordance with the Revised Penal Code (Sec. 167 (1). or a fine equivalent to one hundred percent (100%) of the government's investment cost. or both such fine and imprisonment. RA 3844) Making untruthful statements Fine not exceeding one thousand pesos or in affidavit required under imprisonment of not more than one year. 1996. 49) developer. and/or 5. in the discretion of the court (Sec. 167[5]. The power and duty to hear and try cases involving the criminal acts enumerated under RA 6657. Issuance of cease and desist order (CDO). Cancellation or withdrawal of the authorization for the land use Jurisdiction Over Violation of Agrarian Laws 3. 167 [5]. or upon second conviction. 1999. the DAR shall have jurisdiction over the same by virtue of its express primary jurisdiction to determine and adjudicate agrarian reform matters and exclusive original jurisdiction over all matters involving the implementation of agrarian reform. . Forfeiture of cash bond in accordance with Sec. the penalties for prohibited acts and omissions which are administrative in nature are as follows: Acts or Omissions Administrative Sanction Under MC 19 (1996) Cancellation of EPs/CLOAs and perpetual disqualification of Agrarian Reform Beneficiaries (see MC 19 s. 2. Blacklisting 1. 1 s. 4. 16 hereof. HcaATE With respect to administrative offenses. RA 3844). Sec. RA 3844) Fine of not more than two thousand pesos. RA 8435 and RA 3844 and other relevant agrarian laws belongs to the Special Agrarian Courts. to imprisonment of not more than one year or both such fine and imprisonment.O. of the applicant. Acts Violative of the Right of Farmworkers to a Minimum Wage (Sec. Part I). Under AO 1 (1999) conversion. Automatic disapproval of pending subsequent conversion applications that the offender may file with the DAR. (A.Upon the other hand. orrepresentative.