EN BANC 

[G.R. No. 86889.  December 4, 1990.] LUZ FARMS, petitioner, vs. THE HONORABLE SECRETARY OF THE DEPARTMENT OF AGRARIAN REFORM, respondent. Enrique M. Belo for petitioner. 

D E C I S I O N

PARAS, J p:        This is a petition for prohibition with prayer for restraining order and/or preliminary and permanent injunction against the Honorable Secretary of the Department of Agrarian Reform for acting without jurisdiction in enforcing the assailed provisions of R.A. No. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988 and in promulgating the Guidelines and Procedure Implementing Production and Profit Sharing under R.A. No. 6657, insofar as the same apply to herein petitioner, and further from performing an act in violation of the constitutional rights of the petitioner.        As gathered from the records, the factual background of this case, is as follows:        On June 10, 1988, the President of the Philippines approved R.A. No. 6657, which includes the raising of livestock, poultry and swine in its coverage (Rollo, p. 80).        On January 2, 1989, the Secretary of Agrarian Reform promulgated the Guidelines and Procedures Implementing Production and Profit Sharing as embodied in Sections 13 and 32 of R.A. No. 6657 (Rollo, p. 80).        On January 9, 1989, the Secretary of Agrarian Reform promulgated its Rules and Regulations implementing Section 11 of R.A. No. 6657 (Commercial Farms). (Rollo, p. 81).        Luz Farms, petitioner in this case, is a corporation engaged in the livestock and poultry business and together with others in the same business allegedly stands to be adversely affected by the enforcement of Section 3(b), Section 11, Section 13, Section 16(d) and 17 and Section 32 of R.A. No. 6657 otherwise known as Comprehensive Agrarian Reform Law and of the Guidelines and Procedures Implementing Production and Profit Sharing under R.A. No. 6657 promulgated on January 2, 1989 and the Rules and Regulations Implementing Section 11 thereof as promulgated by the DAR on January 9, 1989 (Rollo, pp. 2-36).        Hence, this petition praying that aforesaid laws, guidelines and rules be declared unconstitutional. Meanwhile, it is also prayed that a writ of preliminary injunction or restraining order be issued enjoining public respondents from enforcing the same, insofar as they are made to apply to Luz Farms and other livestock and poultry raisers.        This Court in its Resolution dated July 4, 1939 resolved to deny, among others, Luz Farms' prayer for the issuance of a preliminary injunction in its Manifestation dated May 26, and 31, 1989. (Rollo, p. 98).        Later, however, this Court in its Resolution dated August 24, 1989 resolved to grant said Motion for Reconsideration regarding the injunctive relief, after the filing and approval by this Court of an injunction bond in the amount of P100,000.00. This Court also gave due course to the petition and required the parties to file their respective memoranda (Rollo, p. 119).        The petitioner filed its Memorandum on September 6, 1989 (Rollo, pp. 131-168).        On December 22, 1989, the Solicitor General adopted his Comment to the petition as his Memorandum (Rollo, pp. 186-187).        Luz Farms questions the following provisions of R.A. 6657, insofar as they are made to apply to it:(a)     Section 3(b) which includes the "raising of livestock (and poultry)" in the definition of "Agricultural, Agricultural Enterprise or Agricultural Activity."(b)     Section 11 which defines "commercial farms" as "private agricultural lands devoted to commercial, livestock, poultry and swine raising . . ."(c)     Section 13 which calls upon petitioner to execute a production-sharing plan.(d)     Section 16(d) and 17 which vest on the Department of Agrarian Reform the authority to summarily determine the just compensation to be paid for lands covered by the Comprehensive Agrarian Reform Law.(e)     Section 32 which spells out the production-sharing plan mentioned in Section 13 —

". . . (W)hereby three percent (3%) of the gross sales from the production of such lands are distributed within sixty (60) days of the end of the fiscal year as

compensation to regular and other farmworkers in such lands over and above the compensation they currently receive: Provided, That these individuals or entities realize gross sales in excess of five million pesos per annum unless the DAR, upon proper application, determine a lower ceiling.

In the event that the individual or entity realizes a profit, an additional ten (10%) of the net profit after tax shall be distributed to said regular and other farmworkers within ninety (90) days of the end of the fiscal year . . ."

        The main issue in this petition is the constitutionality of Sections 3(b), 11, 13 and 32 of R.A. No. 6657 (the Comprehensive Agrarian Reform Law of 1988), insofar as the said law includes the raising of livestock, poultry and swine in its coverage as well as the Implementing Rules and Guidelines promulgated in accordance therewith.         The constitutional provision under consideration reads as follows:ARTICLE XIII

xxx                    xxx                    xxxAGRARIAN AND NATURAL RESOURCES REFORMSection 4.      The State shall, by law, undertake an agrarian reform program founded on the right of farmers and regular farmworkers, who are landless, to own directly or collectively the lands they till or, in the case of other farmworkers, to receive a just share of the fruits thereof. To this end, the State shall encourage and undertake the just distribution of all agricultural lands, subject to such priorities and reasonable retention limits as the Congress may prescribe, taking into account ecological, developmental, or equity considerations, and subject to the payment of just compensation. In determining retention limits, the State shall respect the rights of small landowners. The State shall further provide incentives for voluntary land-sharing.

xxx                    xxx                    xxx"        Luz Farms contended that it does not seek the nullification of R.A. 6657 in its entirety. In fact, it acknowledges the correctness of the decision of this Court in the case of the Association of Small Landowners in the Philippines, Inc. vs. Secretary of Agrarian Reform (G.R. 78742, 14 July 1989) affirming the constitutionality of the Comprehensive Agrarian Reform Law. It, however, argued that Congress in enacting the said law has transcended the mandate of the Constitution, in including land devoted to the raising of livestock, poultry and swine in its coverage (Rollo, p. 131). Livestock or poultry raising is not similar to crop or tree farming. Land is not the primary resource in this undertaking and represents no more than five percent (5%) of the total investment of commercial livestock and poultry raisers. Indeed, there are many owners of residential lands all over the country who use available space in their residence for commercial livestock and raising purposes, under "contract-growing arrangements," whereby processing corporations and other commercial livestock and poultry raisers (Rollo, p. 10). Lands support the buildings and other amenities attendant to the raising of animals and birds. The use of land is incidental to but not the principal factor or consideration in productivity in this industry. Including backyard raisers, about 80% of those in commercial livestock and poultry production occupy five hectares or less. The remaining 20% are mostly corporate farms (Rollo, p. 11).        On the other hand, the public respondent argued that livestock and poultry raising is embraced in the term "agriculture" and the inclusion of such enterprise under Section 3(b) of R.A. 6657 is proper. He cited that Webster's International Dictionary, Second Edition (1954), defines the following words:"Agriculture — the art or science of cultivating the ground and raising and harvesting crops, often, including also, feeding, breeding and management of livestock, tillage, husbandry, farming.It includes farming, horticulture, forestry, dairying, sugarmaking . . .Livestock — domestic animals used or raised on a farm, especially for profit.Farm — a plot or tract of land devoted to the raising of domestic or other animals." (Rollo, pp. 82-83).        The petition is impressed with merit.        The question raised is one of constitutional construction. The primary task in constitutional construction is to ascertain and thereafter assure the realization of the purpose of the framers in the adoption of the Constitution (J.M. Tuazon & Co. vs. Land Tenure Administration, 31 SCRA 413 [1970]).        Ascertainment of the meaning of the provision of Constitution begins with the language of the document itself. The words used in the Constitution are to be given their ordinary meaning except where technical terms are employed in which case the significance thus attached to them prevails (J.M. Tuazon & Co. vs. Land Tenure Administration, 31 SCRA 413 [1970]).        It is generally held that, in construing constitutional provisions which are ambiguous or of doubtful meaning, the courts may consider the debates in the constitutional convention as throwing light on the intent of the framers of the Constitution. It is true that the intent of the convention is not controlling by

itself, but as its proceeding was preliminary to the adoption by the people of the Constitution the understanding of the convention as to what was meant by the terms of the constitutional provision which was the subject of the deliberation, goes a long way toward explaining the understanding of the people when they ratified it (Aquino, Jr. v. Enrile, 59 SCRA 183 [1974]).        The transcripts of the deliberations of the Constitutional Commission of 1986 on the meaning of the word "agricultural," 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.        The Committee adopted the definition of "agricultural land" as defined under Section 166 of R.A. 3844, as laud devoted to any growth, including but not limited to crop lands, saltbeds, fishponds, idle and abandoned land (Record, CONCOM, August 7, 1986, Vol. III, p. 11).        The intention of the Committee is to limit the application of the word "agriculture." Commissioner Jamir proposed to insert the word "ARABLE" to distinguish this kind of agricultural land from such lands as commercial and industrial lands and residential properties because all of them fall under the general classification of the word "agricultural". This proposal, however, was not considered because the Committee contemplated that agricultural lands are limited to arable and suitable agricultural lands and therefore, do not include commercial, industrial and residential lands (Record, CONCOM, August 7, 1986, Vol. III, p. 30).        In the interpellation, then Commissioner Regalado (now a Supreme Court Justice), posed several questions, among others, quoted as follows:

xxx                    xxx                    xxx"Line 19 refers to genuine reform program founded on the primary right of farmers and farmworkers. I wonder if it means that leasehold tenancy is thereby proscribed under this provision because it speaks of the primary right of farmers and farmworkers to own directly or collectively the lands they till. As also mentioned by Commissioner Tadeo, farmworkers include those who work in piggeries and poultry projects.I was wondering whether I am wrong in my appreciation that if somebody puts up a piggery or a poultry project and for that purpose hires farmworkers therein, these farmworkers will automatically have the right to own eventually, directly or ultimately or collectively, the land on which the piggeries and poultry projects were constructed. (Record, CONCOM, August 2, 1986, p. 618).

xxx                    xxx                    xxx        The questions were answered and explained in the statement of then Commissioner Tadeo, quoted as follows:

xxx                    xxx                    xxx"Sa pangalawang katanungan ng Ginoo ay medyo hindi kami nagkaunawaan. Ipinaaalam ko kay Commissioner Regalado na hindi namin inilagay ang agricultural worker sa kadahilanang kasama rito ang piggery, poultry at livestock workers. Ang inilagay namin dito ay farm worker kaya hindi kasama ang piggery, poultry at livestock workers (Record, CONCOM, August 2, 1986, Vol. II, p. 621).        It is evident from the foregoing discussion that Section II of R.A. 6657 which includes "private agricultural lands devoted to commercial livestock, poultry and swine raising" in the definition of "commercial farms" is invalid, to the extent that the aforecited agro-industrial activities are made to be covered by the agrarian reform program of the State. There is simply no reason to include livestock and poultry lands in the coverage of agrarian reform. (Rollo, p. 21).        Hence, there is merit in Luz Farms' argument that the requirement in Sections 13 and 32 of R.A. 6657 directing "corporate farms" which include livestock and poultry raisers to execute and implement "production-sharing plans" (pending final redistribution of their landholdings) whereby they are called upon to distribute from three percent (3%) of their gross sales and ten percent (10%) of their net profits to their workers as additional compensation is unreasonable for being confiscatory, and therefore violative of due process (Rollo, p. 21).        It has been established that this Court will assume jurisdiction over a constitutional question only if it is shown that the essential requisites of a judicial inquiry into such a question are first satisfied. Thus, there must be an actual case or controversy involving a conflict of legal rights susceptible of judicial determination, the constitutional question must have been opportunely raised by the proper party, and the resolution of the question is unavoidably necessary to the decision of the case itself (Association of Small Landowners of the Philippines, Inc. v. Secretary of Agrarian Reform, G.R. 78742; Acuna v. Arroyo, G.R. 79310; Pabico v. Juico, G.R. 79744; Manaay v. Juico, G.R. 79777, 14 July 1989, 175 SCRA 343).        However, despite the inhibitions pressing upon the Court when confronted with constitutional issues, it will not hesitate to declare a law or act invalid when it is convinced that this must be done. In arriving at this conclusion, its only criterion will be the Constitution and God as its conscience gives it

in the light to probe its meaning and discover its purpose. Personal motives and political considerations are irrelevancies that cannot influence its decisions. Blandishment is as ineffectual as intimidation, for all the awesome power of the Congress and Executive, the Court will not hesitate "to make the hammer fall heavily," where the acts of these departments, or of any official, betray the people's will as expressed in the Constitution (Association of Small Landowners of the Philippines, Inc. v. Secretary of Agrarian Reform, G.R. 78742; Acuna v. Arroyo, G.R. 79310; Pabico v. Juico, G.R. 79744; Manaay v. Juico, G.R. 79777, 14 July 1989).Thus, where the legislature or the executive acts beyond the scope of its constitutional powers, it becomes the duty of the judiciary to declare what the other branches of the government had assumed to do, as void. This is the essence of judicial power conferred by the Constitution "(I)n one Supreme Court and in such lower courts as may be established by law" (Art. VIII, Section 1 of the 1935 Constitution; Article X, Section I of the 1973 Constitution and which was adopted as part of the Freedom Constitution, and Article VIII, Section 1 of the 1987 Constitution) and which power this Court has exercised in many instances (Demetria v. Alba, 148 SCRA 208 [1987]).        PREMISES CONSIDERED, the instant petition is hereby GRANTED. Sections 3(b), 11, 13 and 32 of R.A. No. 6657 insofar as the inclusion of the raising of livestock, poultry and swine in its coverage as well as the Implementing Rules and Guidelines promulgated in accordance therewith, are hereby DECLARED null and void for being unconstitutional and the writ of preliminary injunction issued is hereby MADE permanent.        SO ORDERED.        Fernan (C.J.), Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Gancayco, Padilla, Bidin, Griño-Aquino, Medialdea andRegalado, JJ., concur.        Feliciano, J., is on leave.

 

SECOND DIVISION[G.R. No. 147570. February 27, 2004]

SPS. NUMERIANO and CARMELITA ROMERO, petitioners, vs. MERCEDES L. TAN, FLORENTINA L. GONZALES, CELSO L. LUNA, MARIO LUNA and RAMON L. GARCIA, respondents.

D E C I S I O NQUISUMBING, J.:

Petitioners assail the decision[1] dated January 19, 2001, of the Court of Appeals in CA-GR SP No. 59110, which reversed that of the Provincial Agrarian Reform Adjudication Board, [2] Region III, dated May 9, 2000. The Board found that a tenancy relationship existed between petitioners and respondents, entitling petitioners to retain possession of the fishpond in dispute. The appellate court ruled against petitioners, declaring the PARABs decision void for want of jurisdiction.

Subject of this controversy is a private fishpond with an area of one million, two hundred fifty six thousand and four hundred thirty three (1,256,433) square meters in Barangay San Jose, Lubao, Pampanga. The records show that under a contract to petitioners as lessees by respondents as lessors, the fishpond was leased for P1,200,000.00 yearly rental. This contract is evidenced by a Kasunduan Sa Pamuwisan, spanning the period January 1, 1996 until December 31, 1999.[3]

Petitioners allege that they have been in peaceful possession of the fishpond as tenant-lessee since 1985. They present cash vouchers and hand-written receipts covering the period 1987 to 1997.[4] In September 1999, respondents gave verbal notice to terminate petitioners lease. According to petitioners, respondents wanted to terminate the contract because a third party offered to pay higher rent. However, despite petitioners counter-offer to match the increase in the rent, respondents appeared bent on removing petitioners from the premises.

For their part, respondents aver that there is no relationship of lease-tenancy by petitioners to speak of. They add that the existing contract between them and petitioners is an ordinary lease, governed by the Civil Code. Respondents further claim that petitioners failed to pay the agreed rental covering the period January 1, 1997 to December 31, 1997. Accordingly, respondents were constrained to file an ejectment case against petitioners before the Metropolitan Trial Court (MTC) of Malabon, Branch 55, conformably with the provision on venue in the lease contract.[5]

On July 21, 1997, the MTC issued a judgment based on a compromise agreement wherein the parties agreed, inter alia, that petitioners would vacate the leased premises not later than December 31, 1999.[6]

Both parties admit that the aforestated compromise agreement bore the imprimatur of the trial court. Equally admitted is the fact that petitioners were not represented by counsel when they entered into said compromise agreement.

On November 10, 1999, petitioners filed a complaint for maintenance of peaceful possession and issuance of mandatory preliminary injunction with the Provincial Agrarian Reform Adjudication Board, Region III (PARAB). Respondents filed a motion to dismiss it, alleging lack of jurisdiction, improper venue and litis pendentia, and/or res judicata. The PARAB in an order dated January 19, 2000 denied the motion to dismiss.

On January 6, 2000, Kenneth Bautista filed a motion for intervention. [7] He alleged that he had entered into a one year-joint venture agreement[8] dated November 30, 1998, to expire on December 30, 1999, with the petitioners to augment their harvest and enhance their fishpond technology. Intervenor claims that he has the right of possession over the subject fishpond as respondents (defendants in the PARAB complaint) executed a lease contract extending from January 1, 2000 to December 31, 2003 in his favor.[9] He claims that petitioners right as lessees of the fishpond already lapsed with the expiration of their contract on December 31, 1999.

On January 28, 2000, petitioners amended their complaint to include intervenor Kenneth Bautista as one of the defendants.

After the parties submitted their evidence and position papers, the PARAB rendered judgment in favor of herein petitioners. It found that petitioners have proved the existence of all the elements necessary to establish a tenancy relationship. Dated May 9, 2000, the judgment reads:Wherefore, in view of the foregoing judgment is hereby rendered:1) Maintaining plaintiff-spouses Numeriano and Carmelita Romeo as tenants over the subject fishpond;2). Ordering the issuance of a Writ of Permanent Mandatory Injunction restoring plaintiffs in their peaceful possession of the fishpond in question and directing defendants and intervenor to cease and desist from doing any act which would deprive herein plaintiffs of their possession and cultivation of the subject fishpond;3). Ordering plaintiffs herein to post bond in the amount of 1.2 million pesos in favor of intervenor herein to answer for the damages which the latter might suffer if it should be found later on that the former is not entitled to the relief prayed for;

4). Ordering the defendants and intervenor to respect the peaceful possession and cultivation by the plaintiffs of the subject fishpond;5). Declaring the lease contract between intervenor and defendants as null and void.[10]

In the meantime, while the complaint before the PARAB was pending, herein petitioners on December 10, 1999, (21 days before the expiration of the lease contract and the date to relinquish possession of the fishpond pursuant to the compromise agreement), filed with the RTC of Malabon, Branch 74, a petition for annulment of the MTC judgment, order, and compromise agreement.[11] Petitioners raised issues concerning the tenancy relationship, lack of assistance by counsel in arriving at the compromise agreement, as well as lack of jurisdiction by the MTC Malabon because the subject property is located in Lubao, Pampanga. Respondents filed a motion to dismiss premised on culpability of petitioners for forum shopping, including lack of cause of action to file the petition. On March 7, 2001, the RTC dismissed the petition for lack of cause of action and failure to prosecute. [12]

As it turned out, even before the RTCs Order of dismissal came out in their favor, respondents had already elevated the controversy to the appellate court. To be precise, on June 8, 2000, respondents filed with the Court of Appeals a petition for certiorari assailing the May 9, 2000 decision of the PARAB. Finding in favor of respondents, the Court of Appeals, in a decision dated January 19, 2001, set aside the PARAB decision, decreeing thus:WHEREFORE, premises considered, the instant petition is hereby GRANTED and GIVEN DUE COURSE. The assailed Order of January 19, 2000 and the questioned Decision dated May 9, 2000 are declared NULL and VOID for want of jurisdiction.Let the final and executory judgment of the MTC of Malabon in Civil Case No. 1694-97 be executed immediately.SO ORDERED.[13]

Petitioners motion for reconsideration of the said decision was denied by the CA in a resolution dated March 19, 2001. Heedless of this development, petitioners filed on April 4, 2001, a petition with the RTC of Malabon, Branch 170, for certiorari and prohibition with prayer for the issuance of preliminary injunction/restraining order. This petition questioned the order of execution dated February 26, 2001 issued by the MTC of Malabon, Branch 55, which ordered the execution of its judgment based on the compromise agreement.[14]

Then on April 11, 2001 petitioners filed before this Court an appeal via a petition praying for reversal of the abovestated CA decision, which ruled that the PARAB had no jurisdiction to hear and decide the complaint filed by petitioners, and thus ordered the immediate execution of MTC judgment.

Petitioners now assign the following as errors:I. THE COURT OF APPEALS ERRED WHEN IT DECLARED THAT THE PROVINCIAL

ADJUDICATOR ERASMO SP. CRUZ HAS NO JURISDICTION OVER THE SUBJECT MATTER OF THE CASE BASED ON THE CASE OF ATLAS FERTILIZER CORP. VS. SECRETARY OF DEPARTMENT OF AGRARIAN REFORM, 274 SCRA 30, WHERE THE SUPREME COURT RULED THAT THE PROVISIONS OF REPUBLIC ACT NO. 7881 EXPRESSLY STATED THAT FISHPONDS AND PRAWN FARMS ARE EXCLUDED FROM THE COVERAGE OF THE COMPREHENSIVE AGRARIAN REFORM LAW [CARL];

II. THE COURT OF APPEALS ERRED WHEN IT DECLARED THAT IT IS LIKEWISE DISMISSIBLE CONSIDERING THAT THERE WAS A COMPROMISE AGREEMENT BETWEEN THE PETITIONER AND THE PRIVATE RESPONDENTS WHICH HAS THE FORCE OF RES JUDICATA BETWEEN THE PARTIES AND SHOULD NOT BE DISTURBED EXCEPT FOR VICES OF CONSENT OR FORGERY;

III. THE COURT OF APPEALS ERRED WHEN IT GAVE DUE COURSE TO THE PETITION FILED BY THE RESPONDENTS CONSIDERING THAT THE PROPER REMEDY IS TO APPEAL THE DECISION OF THE PROVINCIAL ADJUDICATOR TO THE DARAB.[15]

Principally, the issues for our resolution are (1) whether or not the PARAB had jurisdiction to hear and decide the complaint for maintenance of peaceful possession and issuance of mandatory preliminary injunction; (2) whether or not the compromise agreement duly approved by the MTC of Malabon, Branch 55, had the force and effect of res judicata; and (3) whether or not the PARAB decision should have been appealed to the Department of Agrarian Reform Adjudication Board (DARAB), and not the subject of a special civil action of certiorari filed with the Court of Appeals. These issues depend, in turn, on whether the fishpond, which is the subject of the controversy, is governed by the Comprehensive Agrarian Reform Law (CARL).

Noteworthy, respondents counter that petitioners are guilty of forum shopping in filing different complaints based on the same facts with different judicial and quasi-judicial bodies. Considering the

circumstances of this case, however, we shall first tackle the substantial issues on the merits before the technical matter raised by respondents.

Petitioners aver that the PARAB had jurisdiction over the subject matter of the case as it involves a tenancy relationship. They further claim that this tenancy relationship has long been in existence since 1985 such that any amendment to the Comprehensive Agrarian Reform Law (CARL) to the effect that fishponds are excluded from the coverage of the latter cannot be given retroactive effect, hence, will not operate to divest the PARAB of its jurisdiction over the complaint.

The Court of Appeals in ruling that the PARAB has no jurisdiction relies on our ruling in the case of Atlas Fertilizer Corp. v. Secretary, Dept. of Agrarian Reform [16]  where we held that Rep. Act No. 7881 expressly provides that fishponds and prawn farms are excluded from the coverage of CARL. In reversing the PARABs findings, the appellate court stated:[T]hat the provincial adjudicators jurisdiction is only to hear, determine and adjudicate all AGRARIAN CASES, AND DISPUTES AND INCIDENTS IN CONNECTION THEREWITH (DARAB New Rules of Procedure, Rule 2, Section 2), and considering further that lands devoted to fishing are not agricultural lands because the use of the land is only incidental to and not the principal factor in productivity, as implied by this Court in the Atlas case, it follows that the PARAB has no jurisdiction over the instant case.[17]

On the jurisdictional issue, we find that it was reversible error for the PARAB to have taken cognizance of petitioners complaint. The jurisdiction of the PARAB in this case is limited to agrarian disputes or controversies and other matters or incidents involving the implementation of the Comprehensive Agrarian Reform Program (CARP) under Rep. Act No. 6657, Rep. Act No. 3844 and other agrarian laws.[18] An agrarian dispute is defined as any controversy relating to tenurial arrangements, whether leasehold, tenancy, stewardship or otherwise, over lands devoted to agriculture, including disputes concerning farm workers associations or representation of persons in negotiating, fixing, maintaining, changing or seeking to arrange terms or conditions of such tenurial arrangements.[19]

Although Section 166 (1) of Rep. Act No. 3844 had included fishponds in its definition of agricultural land within its coverage, this definition must be considered modified in the light of Sec. 2 of Rep. Act No. 7881, which amended Section 10 of Rep. Act No. 6657, otherwise known as the Comprehensive Agrarian Reform Law (CARL). Expressly, the amendment has excluded private lands actually, directly and exclusively used for prawn farms and fishponds from the coverage of the CARL. In fact, under Section 3 (c) of R.A. No. 6657, as amended, defines an agricultural land as that which is devoted to agricultural activity and not otherwise classified as mineral, forest, residential, commercial or industrial land. In turn, Section 3 (b) thereof defines agricultural activity as the cultivation of the 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. Clearly, by virtue of the amendments to the CARL, the operation of a fishpond is no longer considered an agricultural activity, and a parcel of land devoted to fishpond operation is not agricultural land as therein defined.

Significantly, although there is no express repeal of Rep. Act No. 3844 as a whole, as in fact its provisions that are not inconsistent with Rep. Act No. 6657, may still be given suppletory effect, nonetheless, there is now irreconcilable inconsistency or repugnancy between the two laws as regards the treatment of fishponds and prawn farms. Such repugnancy leads us to conclude that the provisions of Rep. Act No. 6657 (CARL) supersede the provisions of Rep. Act No. 3844 insofar as fishponds and prawn farms are concerned. In any event, Section 76 of Rep. Act No. 6657 (CARL), as amended, provides that all other laws, decrees, issuances, or parts thereof inconsistent thereto are repealed or amended accordingly.[20]

Consequently, we rule that there is no agrarian tenancy relationship to speak of in this case at this time, since certain requirements set by present law on the matter have not been met. Among these are: (1) the subject matter should be agricultural land; (2) the purpose should be agricultural production; and (3) there should be personal cultivation done by the tenants themselves. [21]

Unless the requisite elements of agrarian tenancy concur in order to create a tenancy relationship between the parties, we cannot bring the matter within the purview of tenancy under CARL. The absence of one element makes an occupant of a parcel of land, or a cultivator thereof, or a planter thereon outside the scope of CARL. Nor can such occupant, cultivator or planter be classified as a de jure agricultural tenant for purposes of agrarian reform law. And unless a person has established his status as a de jure tenant, he is not entitled to security of tenure nor is he covered by the Land Reform Program of the Government under existing agrarian reform laws.[22]

Here, we also find that petitioners failed to prove their personal cultivation of the area in question. There is personal cultivation if the tenant (lessee) cultivates the land himself or with the aid of the immediate farm household, which refers to the members of the family of the tenant (lessee) and other

persons who are dependent upon him for support and who usually help him in the activities.[23] Particularly fatal to petitioners cause is the joint venture agreement with Kenneth Bautista. This agreement provides, among others, that Kenneth Bautista will share in the operation and management of the fishpond; pay the agreed rentals to the registered owner of the land; and that after deducting all operational expenses, Kenneth Bautista and petitioners shall have equal share in the net profits.[24] Not only does it reflect lack of personal cultivation by petitioners, but it also shows the nature of their fishpond operation is that of a large scale commercial venture.

Petitioners claim vested rights arising from the alleged existing tenancy relations. But this cannot be done validly under the present circumstances of this case. Section 2(b) [25] of Rep. Act No. 7881 now contains a proviso, precisely to protect vested rights of those who have already been issued a Certificate of Land Ownership Award (CLOA). Without such CLOA no vested rights could now be claimed by petitioners. In any event, petitioners failed to substantiate their allegation that they have been in possession of the fishpond as early as 1985. The records show that the lease contract began on January 1, 1996, to end on December 31, 1999. Petitioners have not shown other pieces of evidence in their favor that would show possession prior to this lease contract, to prove their allegation of prior occupancy.

Coming now to the issue of res judicata, we find that the elements thereof have been duly established in favor of respondents, to wit: (1) there is a final judgment or order; (2) the court rendering it has jurisdiction over the subject matter and the parties; (3) the judgment or order is on the merits; (4) there is between the two cases identity of parties, subject matter and causes of action.[26] The compromise agreement between the parties was duly approved by the MTC of Malabon, Branch 55. Absent any evidence that mistake, fraud, violence, intimidation, undue influence, or falsity of documents that vitiated the compromise agreement, the agreement must be upheld. Petitioners claim that counsel did not assist them at the time the court approved the compromise agreement. However, this fact alone does not ipso facto result in a mistake under the law as to render inutile the approval of the trial court. In the absence of any evidence to counter the presumption of regularity of the performance of official duty, such presumption of regularity should be upheld. [27] Besides, it is presumed that a person would take ordinary care of his concerns,[28] such that petitioners failure to obtain counsel at that time must be deemed with full knowledge of the consequences thereof. Had petitioners truly believed that the compromise agreement should have been stricken down, the proper course to take would have been to file a motion to set aside the agreement on grounds of nullity under Article 2038 of the Civil Code. It is well settled that a judicial compromise has the effect of res judicata and is immediately executory and not appealable unless set aside as abovestated. [29] Should the motion to set aside the compromise agreement be denied, petitioners may then appeal the denial. Further, a judgment based on a compromise agreement is a judgment on the merits, wherein the parties have validly entered into stipulations and the evidence was duly considered by the trial court that approved the agreement.

That the MTC of Malabon, Branch 55, had jurisdiction over the case for ejectment, to begin with, is in our view beyond dispute. It is a basic tenet of law that courts acquire jurisdiction over the subject matter based on the allegations of the complaint. The assertions in the answer by the defendant cannot divest the court of said jurisdiction. The original complaint filed by respondents clearly alleged that it was a suit for ejectment, the jurisdiction of which is lodged with the proper MTC.

It cannot be denied also that in the actions filed by petitioners in the different courts, as well as in the PARAB, there is identity of parties, of subject matter and of causes of action. The ultimate test in ascertaining the identity of causes of action in two suits is to look into whether or not the same evidence fully supports and establishes both the present cause of action and the former cause of action. If in the affirmative, the former judgment would be a bar. [30] Petitioners in all instances sought to prove the existence of tenancy relationship with respondents over a huge area devoted to fishpond operations. They had to present the same evidence in any case, and they did. On this score, we note that petitioners counsel failed to apprise this Court of all the actions tending to raise the same cause of action, filed in different judicial and quasi-judicial bodies, in contravention of the undertaking specified in the certification on non-forum shopping. Petitioners and their counsel made no mention of the petition for annulment of judgment/compromise agreement filed with the RTC of Malabon, Branch 74, nor of the petition for certiorari with injunction filed with RTC of Malabon, Branch 170, on April 4, 2001 assailing the February 26, 2001 order of execution of the municipal trial court. Petitioners through counsel showed a lack of candor in coming to this Court without full disclosure of prior actions taken successively or simultaneously. Respondents claim that petitioners engaged in forum shopping as shown by the records in this controversy. However, the Court deems it necessary to decide now this case on the merits, rather than merely relying on a technicality, for the sake of substantive justice due the concerned parties.

Finally, we rule that respondents correctly filed a special civil action of certiorari with the Court of Appeals, as provided under Section 1, Rule 65, observing the rules on hierarchy of courts. A special civil action of certiorari is an independent action, raising the question of jurisdiction where the tribunal, board, or officer exercising judicial or quasi-judicial functions has acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction. [31] As already discussed, the PARAB has no power to act on the case as the subject matter of the action was beyond the scope of its jurisdiction under the law. Petitioners would want respondents to appeal the PARAB ruling to the DARAB as a logical and proper remedy, rather than go on certiorari before the CA. Appeal in this case, however, would have been an inadequate remedy as precisely respondents were questioning the very jurisdiction of the PARAB to take cognizance of the case.

The availability of the ordinary recourse of appeal does not bar a party from making use of the extraordinary remedy of certiorari where the ordinary appeal would not be a prompt and adequate remedy, that is,[32] [a] remedy which is equally beneficial, speedy and sufficient, not merely a remedy which at some time in the future will bring about a revival of the judgment of the lower court complained of in the certiorari proceeding, but a remedy which will promptly relieve the petitioner from the injurious effects of that judgment and the acts of the inferior court or tribunal. [33]

The rationale behind CARL, (the Comprehensive Agrarian Reform Law, Rep. Act No. 6657) and other agrarian reform laws is to emancipate the small farmers and farm workers from the bondage of tilling land they do not own. They aim to put into their hands the cultivation of economically viable family-sized[34] farms. Earlier, the Land Reform Code (Rep. Act No. 3844) defined economic family-sized farm as an area of farm land that permits efficient use of labor and capital resources of the farm family, and will produce an income sufficient to provide a modest standard of living to meet a farm familys need for food, clothing, shelter and education with possible allowance for payment of yearly installments on the land, and reasonable reserves to absorb yearly fluctuations in income.[35] Subsequently, Rep. Act No. 6657 was enacted declaring that it is the policy of the state to pursue a comprehensive agrarian reform program to the end that there be a more equitable distribution and ownership of land to provide small farmers and farm workers with the opportunity to enhance their dignity and improve the quality of their lives through greater productivity of agricultural lands.[36] Indeed, our agrarian laws have been enacted to make the small farmers more independent, self-reliant and responsible citizens and a source of genuine strength in our democratic society.[37]

In this case, however, the records do not show that petitioners are small farmers or farm workers deserving of the beneficence and protection afforded by our agrarian laws. It would stretch ones imagination to consider petitioners as lowly farm workers when evidence shows in reality they are businessmen engaged in aquaculture, operating a huge fishpond with an area of one million, two hundred fifty six thousand and four hundred thirty three (1,256,433) square meters. Leasing this huge area could be better appreciated as falling properly under civil law lease rather than agrarian reform lease-tenancy. Moreover, in this case, there is no showing that large fishpond operators belong to the class of beneficiaries contemplated by legislators when they envisioned a policy of emancipation of small farmers or farm workers from bondage of the soil through agrarian reforms. In sum, we agree that the appellate court did not err in excluding the fishpond subject of the present controversy from the coverage of CARL, and holding the PARABs decision dated May 9, 2000 void for lack of jurisdiction.

WHEREFORE, the instant petition is DENIED for lack of merit. The assailed decision dated January 19, 2001 of the Court of Appeals is AFFIRMED. Costs against petitioners.

SO ORDERED.Austria-Martinez, Callejo, Sr., and Tinga, JJ., concur.Puno, J., (Chairman), on leave.

FIRST DIVISION  

CHAMBER OF REAL ESTATE AND BUILDERS ASSOCIATIONS, INC. (CREBA),Petitioner,   

- versus -   THE SECRETARY OF AGRARIAN REFORM,Respondent.

  G.R. No. 183409 Present: CORONA, C.J.,Chairperson,VELASCO, JR.,LEONARDO DE-CASTRO,DEL CASTILLO, andPEREZ, JJ.  Promulgated:June 18, 2010

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

D E C I S I O N  PEREZ, J.:  

This case is a Petition for Certiorari and Prohibition (with application for temporary restraining order and/or writ of preliminary injunction) under Rule 65 of the 1997 Revised Rules of Civil Procedure, filed by herein petitioner Chamber of Real Estate and Builders Associations, Inc. (CREBA) seeking to nullify and prohibit the enforcement of Department of Agrarian Reform (DAR) Administrative Order (AO) No. 01-02, as amended by DAR AO No. 05-07,[1] and DAR Memorandum No. 88,[2] for having been issued by the Secretary of Agrarian Reform with grave abuse of discretion amounting to lack or excess of jurisdiction as some provisions of the aforesaid administrative issuances are illegal and unconstitutional. 

Petitioner CREBA, a private non-stock, non-profit corporation duly organized and existing under the laws of the Republic of the Philippines, is the umbrella organization of some 3,500 private corporations, partnerships, single proprietorships and individuals directly or indirectly involved in land and housing development, building and infrastructure construction, materials production and supply, and services in the various related fields of engineering, architecture, community planning and development financing. The Secretary of Agrarian Reform is named respondent as he is the duly appointive head of the DAR whose administrative issuances are the subject of this petition. 

The Antecedent Facts 

The Secretary of Agrarian Reform issued, on 29 October 1997, DAR AO No. 07-97,[3] entitled Omnibus Rules and Procedures Governing Conversion of Agricultural Lands to Non-Agricultural Uses, which consolidated all existing implementing guidelines related to land use conversion. The aforesaid rules embraced all private agricultural lands regardless of tenurial arrangement and commodity produced, and all untitled agricultural lands and agricultural lands reclassified by Local Government Units (LGUs) into non-agricultural uses after 15 June 1988.

 Subsequently, on 30 March 1999, the Secretary of Agrarian Reform issued DAR AO No. 01-99,

[4] entitled Revised Rules and Regulations on the Conversion of Agricultural Lands to Non-agricultural Uses , amending and updating the previous rules on land use conversion. Its coverage includes the following agricultural lands, to wit: (1) those to be converted to residential, commercial, industrial, institutional and other non-agricultural purposes; (2) those to be devoted to another type of agricultural activity such as livestock, poultry, and fishpond ─ the effect of which is to exempt the land from the Comprehensive Agrarian Reform Program (CARP) coverage; (3) those to be converted to non-agricultural use other than that previously authorized; and (4) those reclassified to residential, commercial, industrial, or other non-agricultural uses on or after the effectivity of Republic Act No. 6657 [5] on 15 June 1988 pursuant to Section 20 [6] of Republic Act No. 7160[7] and other pertinent laws and regulations, and are to be converted to such uses.

 

On 28 February 2002, the Secretary of Agrarian Reform issued another Administrative Order, i.e., DAR AO No. 01-02, entitled 2002 Comprehensive Rules on Land Use Conversion, which further amended DAR AO No. 07-97 and DAR AO No. 01-99, and repealed all issuances inconsistent therewith. The aforesaid DAR AO No. 01-02 covers all applications for conversion from agricultural to non-agricultural uses or to another agricultural use.

 Thereafter, on 2 August 2007, the Secretary of Agrarian Reform amended certain provisions [8] of DAR AO No. 01-02 by formulating DAR AO No. 05-07, particularly addressing land conversion in time of exigencies and calamities. To address the unabated conversion of prime agricultural lands for real estate development, the Secretary of Agrarian Reform further issued Memorandum No. 88 on 15 April 2008, which temporarily suspended the processing and approval of all land use conversion applications. By reason thereof, petitioner claims that there is an actual slow down of housing projects, which, in turn, aggravated the housing shortage, unemployment and illegal squatting problems to the substantial prejudice not only of the petitioner and its members but more so of the whole nation. Hence, this petition.   

The Issues 

In its Memorandum, petitioner posits the following issues:                                                                                                                                                                                      

  I.              WHETHER THE DAR SECRETARY HAS JURISDICTION OVER LANDS THAT HAVE BEEN RECLASSIFIED AS RESIDENTIAL, COMMERCIAL, INDUSTRIAL, OR FOR OTHER NON-AGRICULTURAL USES. 

                                                                                                                                                                                    II.             

 WHETHER THE DAR SECRETARY ACTED IN EXCESS OF HIS JURISDICTION AND GRAVELY ABUSED HIS DISCRETION BY ISSUING AND ENFORCING [DAR AO NO. 01-02, AS AMENDED] WHICH SEEK TO REGULATE RECLASSIFIED LANDS. 

                                                                                                                                                                                  III.           

WHETHER [DAR AO NO. 01-02, AS AMENDED] VIOLATE[S] THE LOCAL AUTONOMY OF LOCAL GOVERNMENT UNITS. 

                                                                                                                                                                                 IV.             

 WHETHER [DAR AO NO. 01-02, AS AMENDED] VIOLATE[S] THE DUE PROCESS AND EQUAL PROTECTION CLAUSE[S] OF THE CONSTITUTION. 

                                                                                                                                                                                    V.             

 WHETHER MEMORANDUM NO. 88 IS A VALID EXERCISE OF POLICE POWER.[9]

  The subject of the submission that the DAR Secretary gravely abused his discretion is AO No. 01-02,

as amended, which states: 

Section 3. Applicability of Rules. These guidelines shall apply to all applications for conversion, from agricultural to non-agricultural uses or to another agricultural use, such as: x x x x 3.4 Conversion of agricultural lands or areas that have been reclassified by the LGU or by way of a Presidential Proclamation, to residential, commercial, industrial, or other non-agricultural useson or after the effectivity of RA 6657 on 15 June 1988, x x x. [Emphasis supplied]. Petitioner holds that under Republic Act No. 6657 and Republic Act No. 8435,[10] the term agricultural

lands refers to lands devoted to or suitable for the cultivation of the soil, planting of crops, growing of fruit trees, raising of livestock, poultry or fish, including the harvesting of such farm products, and other farm activities and practices performed by a farmer in conjunction with such farming operations done by a person whether natural or juridical, and not classified by the law as mineral, forest, residential, commercial or industrial land.  When the Secretary of Agrarian Reform, however, issued DAR AO No. 01-02, as amended, he included in the definition of agricultural lands lands not reclassified as residential, commercial, industrial or other non-agricultural uses before 15 June 1988. In effect, lands reclassified from agricultural to residential, commercial, industrial, or other non-agricultural uses after 15 June 1988 are considered to be agricultural lands for purposes of conversion, redistribution, or otherwise. In so doing, petitioner avows that the Secretary of Agrarian Reform acted without jurisdiction as he has no authority to expand or enlarge the legal signification of the term agricultural lands through DAR AO No. 01-02. Being a mere administrative issuance, it must conform to the statute it seeks to implement, i.e., Republic Act No. 6657, or to the Constitution, otherwise, its validity or constitutionality may be questioned. In the same breath, petitioner contends that DAR AO No. 01-02, as amended, was made in violation of Section 65[11] of Republic Act No. 6657 because it covers all applications for conversion from agricultural to non-agricultural uses or to other agricultural uses, such as the conversion of agricultural lands or areas that have been reclassified by the LGUs or by way of Presidential Proclamations, to residential, commercial, industrial or other non-agricultural uses on or after 15 June 1988. According to petitioner, there is nothing in Section 65 of Republic Act No. 6657 or in any other provision of law that confers to the DAR the jurisdiction or authority to require that non-awarded lands or reclassified lands be submitted to its conversion authority. Thus, in issuing and enforcing DAR AO No. 01-02, as amended, the Secretary of Agrarian Reform acted with grave abuse of discretion amounting to lack or excess of jurisdiction. 

Petitioner further asseverates that Section 2.19,[12] Article I of DAR AO No. 01-02, as amended, making reclassification of agricultural lands subject to the requirements and procedure for land use conversion, violates Section 20 of Republic Act No. 7160, because it was not provided therein that reclassification by LGUs shall be subject to conversion procedures or requirements, or that the DARs approval or clearance must be secured to effect reclassification. The said Section 2.19 of DAR AO No. 01-02, as amended, also contravenes the constitutional mandate on local autonomy under Section 25,[13] Article II and Section 2,[14] Article X of the 1987 Philippine Constitution. Petitioner similarly avers that the promulgation and enforcement of DAR AO No. 01-02, as amended, constitute deprivation of liberty and property without due process of law. There is deprivation of liberty and property without due process of law because under DAR AO No. 01-02, as amended, lands that are not within DARs jurisdiction are unjustly, arbitrarily and oppressively prohibited or restricted from legitimate use on pain of administrative and criminal penalties. More so, there is discrimination and violation of the equal protection clause of the Constitution because the aforesaid administrative order is patently biased in favor of the peasantry at the expense of all other sectors of society. As its final argument, petitioner avows that DAR Memorandum No. 88 is not a valid exercise of police power for it is the prerogative of the legislature and that it is unconstitutional because it suspended the land use conversion without any basis. 

The Courts Ruling 

This petition must be dismissed. Primarily, although this Court, the Court of Appeals and the Regional Trial Courts have concurrent jurisdiction to issue writs of certiorari, prohibition, mandamus, quo warranto, habeas corpus and injunction, such

concurrence does not give the petitioner unrestricted freedom of choice of court forum .[15] In Heirs of Bertuldo Hinog v. Melicor,[16] citing People v. Cuaresma,[17] this Court made the following pronouncements: 

This Court's original jurisdiction to issue writs of certiorari is not exclusive.  It is shared by this Court with Regional Trial Courts and with the Court of Appeals.  This concurrence of jurisdiction is not, however, to be taken as according to parties seeking any of the writs an absolute, unrestrained freedom of choice of the court to which application therefor will be directed. There is after all a hierarchy of courts.  That hierarchy is determinative of the venue of appeals, and also serves as a general determinant of the appropriate forum for petitions for the extraordinary writs.  A becoming regard for that judicial hierarchy most certainly indicates that petitions for the issuance of extraordinary writs against first level (inferior) courts should be filed with the Regional Trial Court, and those against the latter, with the Court of Appeals.  A direct invocation of the Supreme Courts original jurisdiction to issue these writs should be allowed only when there are special and important reasons therefor, clearly and specifically set out in the petition .  This is [an] established policy.  It is a policy necessary to prevent inordinate demands upon the Courts time and attention which are better devoted to those matters within its exclusive jurisdiction, and to prevent further over-crowding of the Courts docket.[18] (Emphasis supplied.)

  

The rationale for this rule is two-fold: (a) it would be an imposition upon the precious time of this Court; and (b) it would cause an inevitable and resultant delay, intended or otherwise, in the adjudication of cases, which in some instances had to be remanded or referred to the lower court as the proper forum under the rules of procedure, or as better equipped to resolve the issues because this Court is not a trier of facts.[19]

 This Court thus reaffirms the judicial policy that it will not entertain direct resort to it unless the redress

desired cannot be obtained in the appropriate courts, and exceptional and compelling circumstances, such as cases of national interest and of serious implications, justify the availment of the extraordinary remedy of writ of certiorari, calling for the exercise of its primary jurisdiction.[20]

 Exceptional and compelling circumstances were held present in the following cases: (a) Chavez v.

Romulo,[21] on citizens right to bear arms; (b) Government of [the] United States of America v. Hon. Purganan,[22] on bail in extradition proceedings; (c) Commission on Elections v. Judge Quijano-Padilla,[23] on government contract involving modernization and computerization of voters registration list; (d) Buklod ng Kawaning EIIB v. Hon. Sec. Zamora,[24] on status and existence of a public office; and (e) Hon. Fortich v. Hon. Corona,[25] on the so-called Win-Win Resolution of the Office of the President which modified the approval of the conversion to agro-industrial area.[26]

 In the case at bench, petitioner failed to specifically and sufficiently set forth special and important

reasons to justify direct recourse to this Court and why this Court should give due course to this petition in the first instance, hereby failing to fulfill the conditions set forth in  Heirs of Bertuldo Hinog v. Melicor.[27] The present petition should have been initially filed in the Court of Appeals in strict observance of the doctrine on the hierarchy of courts. Failure to do so is sufficient cause for the dismissal of this petition.

 Moreover, although the instant petition is styled as a Petition for Certiorari, in essence, it seeks the

declaration by this Court of the unconstitutionality or illegality of the questioned DAR AO No. 01-02, as amended, and Memorandum No. 88. It, thus, partakes of the nature of a Petition for Declaratory Relief over which this Court has only appellate, not original, jurisdiction. [28] Section 5, Article VIII of the 1987 Philippine Constitution provides:

 Sec. 5. The Supreme Court shall have the following powers: (1) Exercise original jurisdiction over cases affecting ambassadors, other public

ministers and consuls, and over petitions for certiorari, prohibition, mandamus, quo warranto, and habeas corpus.

 (2) Review, revise, reverse, modify, or affirm on appeal or certiorari as the law or

the Rules of Court may provide, final judgments and orders of lower courts in:

 

(a) All cases in which the constitutionality or validity of any treaty, international or executive agreement, law, presidential decree, proclamation, order, instruction, ordinance, or regulation is in question. (Emphasis supplied.)

  

With that, this Petition must necessarily fail because this Court does not have original jurisdiction over a Petition for Declaratory Relief even if only questions of law are involved.

 Even if the petitioner has properly observed the doctrine of judicial hierarchy, this Petition is still

dismissible. The special civil action for certiorari is intended for the correction of errors of jurisdiction only or

grave abuse of discretion amounting to lack or excess of jurisdiction. Its principal office is only to keep the inferior court within the parameters of its jurisdiction or to prevent it from committing such a grave abuse of discretion amounting to lack or excess of jurisdiction.[29]

 The essential requisites for a Petition for Certiorari under Rule 65 are: (1) the writ is directed against a

tribunal, a board, or an officer exercising judicial or quasi-judicial functions; (2) such tribunal, board, or officer has acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction; and (3) there is no appeal or any plain, speedy, and adequate remedy in the ordinary course of law.[30]

 Excess of jurisdiction as distinguished from absence of jurisdiction means that an act, though within

the general power of a tribunal, board or officer, is not authorized and invalid with respect to the particular proceeding, because the conditions which alone authorize the exercise of the general power in respect of it are wanting.[31] Without jurisdiction means lack or want of legal power, right or authority to hear and determine a cause or causes, considered either in general or with reference to a particular matter.It means lack of power to exercise authority.[32] Grave abuse of discretion implies such capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction or, in other words, where the power is exercised in an arbitrary manner by reason of passion, prejudice, or personal hostility, and it must be so patent or gross as to amount to an evasion of a positive duty or to a virtual refusal to perform the duty enjoined or to act at all in contemplation of law.[33]

 In the case before this Court, the petitioner fails to meet the above-mentioned requisites for the proper

invocation of a Petition for Certiorari under Rule 65. The Secretary of Agrarian Reform in issuing the assailed DAR AO No. 01-02, as amended, as well as Memorandum No. 88 did so in accordance with his mandate to implement the land use conversion provisions of Republic Act No. 6657. In the process, he neither acted in any judicial or quasi-judicial capacity nor assumed unto himself any performance of judicial or quasi-judicial prerogative. A Petition for Certiorari is a special civil action that may be invoked only against a tribunal, board, or officer exercising judicial functions. Section 1, Rule 65 of the 1997 Revised Rules of Civil Procedure is explicit on this matter, viz.:

 SECTION 1. Petition for certiorari. When any tribunal, board or officer exercising

judicial or quasi-judicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal, nor any plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment must be rendered annulling or modifying the proceedings of such tribunal, board or officer. A tribunal, board, or officer is said to be exercising judicial function where it has the power to

determine what the law is and what the legal rights of the parties are, and then undertakes to determine these questions and adjudicate upon the rights of the parties. Quasi-judicial function, on the other hand, is a term which applies to the actions, discretion, etc., of public administrative officers or bodies x x x required to investigate facts or ascertain the existence of facts, hold hearings, and draw conclusions from them as a basis for their official action and to exercise discretion of a judicial nature.[34]

 Before a tribunal, board, or officer may exercise judicial or quasi-judicial acts, it is necessary that there

be a law that gives rise to some specific rights of persons or property under which adverse claims to such rights

are made, and the controversy ensuing therefrom is brought before a tribunal, board, or officer clothed with power and authority to determine the law and adjudicate the respective rights of the contending parties.[35]

 The Secretary of Agrarian Reform does not fall within the ambit of a tribunal, board, or officer

exercising judicial or quasi-judicial functions. The issuance and enforcement by the Secretary of Agrarian Reform of the questioned DAR AO No. 01-02, as amended, and Memorandum No. 88 were done in the exercise of his quasi-legislative and administrative functions and not of judicial or quasi-judicial functions. In issuing the aforesaid administrative issuances, the Secretary of Agrarian Reform never made any adjudication of rights of the parties. As such, it can never be said that the Secretary of Agrarian Reform had acted with grave abuse of discretion amounting to lack or excess of jurisdiction in issuing and enforcing DAR AO No. 01-02, as amended, and Memorandum No. 88 for he never exercised any judicial or quasi-judicial functions but merely his quasi-legislative and administrative functions.

 Furthermore, as this Court has previously discussed, the instant petition in essence seeks the

declaration by this Court of the unconstitutionality or illegality of the questioned DAR AO No. 01-02, as amended, and Memorandum No. 88. Thus, the adequate and proper remedy for the petitioner therefor is to file a Petition for Declaratory Relief, which this Court has only appellate and not original jurisdiction.  It is beyond the province of certiorari to declare the aforesaid administrative issuances unconstitutional and illegal because certiorari is confined only to the determination of the existence of grave abuse of discretion amounting to lack or excess of jurisdiction. Petitioner cannot simply allege grave abuse of discretion amounting to lack or excess of jurisdiction and then invoke certiorari to declare the aforesaid administrative issuances unconstitutional and illegal. Emphasis must be given to the fact that the writ of certiorari dealt with in Rule 65 of the 1997 Revised Rules of Civil Procedure is a prerogative writ, never demandable as a matter of right,  never issued except in the exercise of judicial discretion.[36]

 At any rate, even if the Court will set aside procedural infirmities, the instant petition should still be

dismissed. Executive Order No. 129-A[37] vested upon the DAR the responsibility of implementing the

CARP. Pursuant to the said mandate and to ensure the successful implementation of the CARP, Section 5(c) of the said executive order authorized the DAR to establish and promulgate operational policies, rules and regulations and priorities for agrarian reform implementation. Section 4(k) thereof authorized the DAR to approve or disapprove the conversion, restructuring or readjustment of agricultural lands into non-agricultural uses. Similarly, Section 5(l) of the same executive order has given the DAR the exclusive authority to approve or disapprove conversion of agricultural lands for residential, commercial, industrial, and other land uses as may be provided for by law.  Section 7 of the aforesaid executive order clearly provides that the authority and responsibility for the exercise of the mandate of the [DAR] and the discharge of its powers and functions shall be vested in the Secretary of Agrarian Reform x x x.

 Under DAR AO No. 01-02, as amended, lands not reclassified as residential, commercial, industrial or

other non-agricultural uses before 15 June 1988 have been included in the definition of agricultural lands. In so doing, the Secretary of Agrarian Reform merely acted within the scope of his authority stated in the aforesaid sections of Executive Order No. 129-A, which is to promulgate rules and regulations for agrarian reform implementation and that includes the authority to define agricultural lands for purposes of land use conversion. Further, the definition of agricultural lands under DAR AO No. 01-02, as amended, merely refers to the category of agricultural lands that may be the subject for conversion to non-agricultural uses and is not in any way confined to agricultural lands in the context of land redistribution as provided for under Republic Act No. 6657.

 More so, Department of Justice Opinion No. 44, Series of 1990, which Opinion has been recognized in

many cases decided by this Court, clarified that after the effectivity of Republic Act No. 6657 on 15 June 1988 the DAR has been given the authority to approve land conversion.[38] Concomitant to such authority, therefore, is the authority to include in the definition of agricultural lands lands not reclassified as residential, commercial, industrial or other non-agricultural uses before 15 June 1988 for purposes of land use conversion. 

In the same vein, the authority of the Secretary of Agrarian Reform to include lands not reclassified as residential, commercial, industrial or other non-agricultural usesbefore 15 June 1988 in the definition of agricultural lands finds basis in jurisprudence. In Ros v. Department of Agrarian Reform,[39] this Court has enunciated that after the passage of Republic Act No. 6657, agricultural lands, though reclassified, have to go through the process of conversion, jurisdiction over which is vested in the DAR.However, agricultural lands,

which are already reclassified before the effectivity of Republic Act No. 6657 which is 15 June 1988, are exempted from conversion.[40] It bears stressing that the said date of effectivity of Republic Act No. 6657 served as the cut-off period for automatic reclassifications or rezoning of agricultural lands that no longer require any DAR conversion clearance or authority.[41] It necessarily follows that any reclassification made thereafter can be the subject of DARs conversion authority.Having recognized the DARs conversion authority over lands reclassified after 15 June 1988, it can no longer be argued that the Secretary of Agrarian Reform was wrongfully given the authority and power to include lands not reclassified as residential, commercial, industrial or other non-agricultural uses before 15 June 1988 in the definition of agricultural lands. Such inclusion does not unduly expand or enlarge the definition of agricultural lands; instead, it made clear what are the lands that can be the subject of DARs conversion authority, thus, serving the very purpose of the land use conversion provisions of Republic Act No. 6657.

 The argument of the petitioner that DAR AO No. 01-02, as amended, was made in violation of Section 65 of Republic Act No. 6657, as it covers even those non-awarded lands and reclassified lands by the LGUs or by way of Presidential Proclamations on or after 15 June 1988 is specious. As explained in Department of Justice Opinion No. 44, series of 1990, it is true that the DARs express power over land use conversion provided for under Section 65 of Republic Act No. 6657 is limited to cases in which agricultural lands already awarded have, after five years, ceased to be economically feasible and sound for agricultural purposes, or the locality has become urbanized and the land will have a greater economic value for residential, commercial or industrial purposes. To suggest, however, that these are the only instances that the DAR can require conversion clearances would open a loophole in Republic Act No. 6657 which every landowner may use to evade compliance with the agrarian reform program.  It should logically follow, therefore, from the said departments express duty and function to execute and enforce the said statute that any reclassification of a private land as a residential, commercial or industrial property, on or after the effectivity of Republic Act No. 6657 on 15 June 1988 should first be cleared by the DAR.[42]

This Court held in Alarcon v. Court of Appeals[43] that reclassification of lands does not suffice. Conversion and reclassification differ from each other. Conversion is the act of changing the current use of a piece of agricultural land into some other use as approved by the DAR while reclassification is the act of specifying how agricultural lands shall be utilized for non-agricultural uses such as residential, industrial, and commercial, as embodied in the land use plan, subject to the requirements and procedures for land use conversion. In view thereof, a mere reclassification of an agricultural land does not automatically allow a landowner to change its use. He has to undergo the process of conversion before he is permitted to use the agricultural land for other purposes.[44]

 It is clear from the aforesaid distinction between reclassification and conversion that agricultural lands

though reclassified to residential, commercial, industrial or other non-agricultural uses must still undergo the process of conversion before they can be used for the purpose to which they are intended.

 Nevertheless, emphasis must be given to the fact that DARs conversion authority can only be exercised

after the effectivity of Republic Act No. 6657 on 15 June 1988.[45] The said date served as the cut-off period for automatic reclassification or rezoning of agricultural lands that no longer require any DAR conversion clearance or authority.[46] Thereafter, reclassification of agricultural lands is already subject to DARs conversion authority. Reclassification alone will not suffice to use the agricultural lands for other purposes. Conversion is needed to change the current use of reclassified agricultural lands.

 It is of no moment whether the reclassification of agricultural lands to residential, commercial,

industrial or other non-agricultural uses was done by the LGUs or by way of Presidential Proclamations because either way they must still undergo conversion process. It bears stressing that the act of reclassifying agricultural lands to non-agricultural uses simply specifies how agricultural lands shall be utilized for non-agricultural uses and does not automatically convert agricultural lands to non-agricultural uses or for other purposes.  As explained in DAR Memorandum Circular No. 7, Series of 1994, cited in the 2009 case of Roxas & Company, Inc. v. DAMBA-NFSW and the Department of Agrarian Reform,[47] reclassification of lands denotes their allocation into some specific use and providing for the manner of their utilization and disposition or the act of specifying how agricultural lands shall be utilized for non-agricultural uses such as residential, industrial, or commercial, as embodied in the land use plan. For reclassified agricultural lands, therefore, to be used for the purpose to which they are intended there is still a need to change the current use thereof through the process of conversion. The authority to do so is vested in the DAR, which is mandated to preserve and maintain agricultural lands with increased productivity. Thus, notwithstanding the reclassification of agricultural lands to non-agricultural uses, they must still undergo conversion before they can be used for other purposes. 

Even reclassification of agricultural lands by way of Presidential Proclamations to non-agricultural uses, such as school sites, needs conversion clearance from the DAR.We reiterate that reclassification is different from conversion. Reclassification alone will not suffice and does not automatically allow the landowner to change its use. It must still undergo conversion process before the landowner can use such agricultural lands for such purpose.[48] Reclassification of agricultural lands is one thing, conversion is another. Agricultural lands that are reclassified to non-agricultural uses do not ipso facto allow the landowner thereof to use the same for such purpose. Stated differently, despite having reclassified into school sites, the landowner of such reclassified agricultural lands must apply for conversion before the DAR in order to use the same for the said purpose.

 Any reclassification, therefore, of agricultural lands to residential, commercial, industrial or other non-

agricultural uses either by the LGUs or by way of Presidential Proclamations enacted on or after 15 June 1988 must undergo the process of conversion, despite having undergone reclassification, before agricultural lands may be used for other purposes.

 It is different, however, when through Presidential Proclamations public agricultural lands have been

reserved in whole or in part for public use or purpose, i.e., public school, etc., because in such a case, conversion is no longer necessary. As held in Republic v. Estonilo,[49] only a positive act of the President is needed to segregate or reserve a piece of land of the public domain for a public purpose. As such, reservation of public agricultural lands for public use or purpose in effect converted the same to such use without undergoing any conversion process and that they must be actually, directly and exclusively used for such public purpose for which they have been reserved, otherwise,they will be segregated from the reservations and transferred to the DAR for distribution to qualified beneficiaries under the CARP.[50] More so, public agricultural lands already reserved for public use or purpose no longer form part of the alienable and disposable lands of the public domain suitable for agriculture.[51] Hence, they are outside the coverage of the CARP and it logically follows that they are also beyond the conversion authority of the DAR.

Clearly from the foregoing, the Secretary of Agrarian Reform did not act without jurisdiction or in excess of jurisdiction or with grave abuse of discretion amounting to lack or excess of jurisdiction in (1) including lands not reclassified as residential, commercial, industrial or other non-agricultural uses before 15 June 1988 in the definition of agricultural lands under DAR AO No. 01-02, as amended, and; (2) issuing and enforcing DAR AO No. 01-02, as amended, subjecting to DARs jurisdiction for conversion lands which had already been reclassified as residential, commercial, industrial or for other non-agricultural uses on or after 15 June 1988. 

Similarly, DAR AO No. 01-02, as amended, providing that the reclassification of agricultural lands by LGUs shall be subject to the requirements of land use conversion procedure or that DARs approval or clearance must be secured to effect reclassification, did not violate the autonomy of the LGUs.

 Section 20 of Republic Act No. 7160 states that: SECTION 20. Reclassification of Lands. (a) A city or municipality may, through an ordinance passed by the sanggunian after conducting public hearings for the purpose, authorize the reclassification of agricultural lands and provide for the manner of their utilization or disposition in the following cases: (1) when the land ceases to be economically feasible and sound for agricultural purposes as determined by the Department of Agriculture or (2) where the land shall have substantially greater economic value for residential, commercial, or industrial purposes, as determined by the sanggunian concerned: Provided, That such reclassification shall be limited to the following percentage of the total agricultural land area at the time of the passage of the ordinance: x x x x (3) For fourth to sixth class municipalities, five percent (5%): Provided, further, That agricultural lands distributed to agrarian reform beneficiaries pursuant to Republic Act Numbered Sixty-six hundred fifty-seven (R.A. No. 6657), otherwise known as The Comprehensive Agrarian Reform Law, 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. x x x x 

(e) Nothing in this Section shall be construed as repealing, amending, or modifying in any manner the provisions of R.A. No. 6657.  

The aforequoted provisions of law show that the power of the LGUs to reclassify agricultural lands is not absolute. The authority of the DAR to approve conversion of agricultural lands covered by Republic Act No. 6657 to non-agricultural uses has been validly recognized by said Section 20 of Republic Act No. 7160 by explicitly providing therein that, nothing in this section shall be construed as repealing or modifying in any manner the provisions of Republic Act No. 6657. 

DAR AO No. 01-02, as amended, does not also violate the due process clause, as well as the equal protection clause of the Constitution. In providing administrative and criminal penalties in the said administrative order, the Secretary of Agrarian Reform simply implements the provisions of Sections 73 and 74 of Republic Act No. 6657, thus:

 Sec. 73. Prohibited Acts and Omissions. The following are prohibited:

 x x x x

(c) 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 disposes his tenant farmers of the land tilled by them;

x x x x(f) The sale, 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, in order to circumvent the provisions of this Act.

x x x xSec. 74. Penalties. ─ Any person who knowingly or willfully violates the provisions

of this Act shall be punished by imprisonment of not less than one (1) month to not more than three (3) years or a fine of not less than one thousand pesos (P1,000.00) and not more than fifteen thousand pesos (P15,000.00), or both, at the discretion of the court. 

If the offender is a corporation or association, the officer responsible therefor shall be criminally liable.

  

And Section 11 of Republic Act No. 8435, which specifically provides: 

Sec. 11. Penalty for Agricultural Inactivity and Premature Conversion. x x x.Any person found guilty of premature or illegal conversion shall be penalized with

imprisonment of two (2) to six (6) years, or a fine equivalent to one hundred percent (100%) of the government's investment cost, or both, at the discretion of the court, and an accessory penalty of forfeiture of the land and any improvement thereon.

In addition, the DAR may impose the following penalties, after determining, in an administrative proceedings, that violation of this law has been committed:

a. Consolation or withdrawal of the authorization for land use conversion; andb. Blacklisting, or automatic disapproval of pending and subsequent conversion

applications that they may file with the DAR. 

Contrary to petitioners assertions, the administrative and criminal penalties provided for under DAR AO No. 01-02, as amended, are imposed upon the illegal or premature conversion of lands within DARs jurisdiction, i.e., lands not reclassified as residential, commercial, industrial or for other non-agricultural uses before 15 June 1998.

 The petitioners argument that DAR Memorandum No. 88 is unconstitutional, as it suspends the land use conversion without any basis, stands on hollow ground. 

It bears emphasis that said Memorandum No. 88 was issued upon the instruction of the President in order to address the unabated conversion of prime agricultural lands for real estate development because of the worsening rice shortage in the country at that time. Such measure was made in order to ensure that there are enough agricultural lands in which rice cultivation and production may be carried into. The issuance of said

Memorandum No. 88 was made pursuant to the general welfare of the public, thus, it cannot be argued that it was made without any basis.

 WHEREFORE, premises considered, the instant Petition for Certiorari is DISMISSED. Costs against

petitioner. 

SO ORDERED.

FIRST DIVISION

 PAULINO REYES, DANILO BAON,PACITA D. VADURIA, JULIE MONTOYA, MERCEDES RAMOS, GERONIMO DERAIN, FELICIANO D. BAON, PACIFICO DERAIN, EUTERIO SEVILLA, MAMERTO B. ESPINELLI, CARMELITA GRAVADOS, AVELINO E. PASTOR, ANTONIO BUHAY, TIRZO GULFAN JR., FELIX SOMBREMONTE, NICASIO TINAGUISAN, VICENTE VILLALUNA, LEOPOLDO DE JOYA,LENIE DE JOYA, LIBERATO DE G.R. No. 148967JOYA, CRESCENCIANA DE JOYA,FRESCO CATAPANG, ROSITA Present:CATAPANG, DOMINGO P. LIMBOC,VIRGILIO P. LIMBOC, VICENTE PUNO, C.J., Chairperson,LIMBOC, MARIO H. PERNO, SANDOVAL-GUTIERREZ,LAZARITO CABRAL, CARLITO CORONA,CAPACIA, JOSE S. BAUTISTA, AZCUNA, andFELECITO BARCELON, LUIS GARCIA, JJ.MANGI, CONCEPCION DERAIN,BASILISA DERAIN, GUILLERMO Promulgated:BAUTISTA, BEATRIZ SEVILLA,FRANCISCO MENDOZA, TERESITA February 9, 2007DINGLES, NICOLAS ASAHAN, MOISES CARABLE, ROSITA MERCADO, LAMBERTO BAUTISTA, ENRIQUITO DINGLES, CELERIO DINGLES, JOSE QUIROZ, ET AL.,Petitioners,

-         versus -FIL-ESTATE PROPERTIES, INC.,and COURT OF APPEALS,Respondents.x ---------------------------------------------------------------------------------------- x

DECISION AZCUNA, J.: This is a petition for certiorari[1] seeking the nullification of the resolutions of the Court of Appeals, dated November 23, 2000 and May 8, 2001, dismissing a petition filed under Rule 43 of the Rules of Court due to procedural defects,[2] in CA-G.R. SP No. 60203 entitled, Paulino Reyes, et al. v. Fil-Estate Properties, Inc. Central to the controversy is a portion of Hacienda Looc consisting of ten parcels of land with an aggregate area of 1,219.0133 hectares which was previously awarded to petitioners as evidenced by their Certificates of Land Ownership Award (CLOAs). At the instance of private respondent Fil-Estate Properties, Inc. (Fil-Estate), however, which sought the exclusion of the parcels of land from the Comprehensive Agrarian Reform Program (CARP), the CLOAs were cancelled by the Regional Agrarian Reform Adjudicator (RARAD) on the ground that the lands were agriculturally undeveloped and had an average slope of more than 18%. The facts are as follows: Petitioners are the tenants of the disputed portion of Hacienda Looc which has been the subject of application for exclusion from CARP coverage pursuant to Administrative Order No. 10, Series of 1994.[3]

 Hacienda Looc is an 8,650-hectare property located in Nasugbu, Batangas registered under Transfer

Certificate of Title (TCT) No. T-28719 of the Registry of Deeds for the Province of Batangas. It is comprised of four barangays, namely, Calayo, Looc, Papaya and Bulihan, and has a total population of more than 10,000.

 By virtue of Presidential Decree No. 27 issued by President Ferdinand E. Marcos on October 21, 1972,

a portion of the hacienda with an aggregate area of 1,282.9767 hectares that were planted with rice and corn were distributed to the farmers, and emancipation patents (EPs) were accordingly issued.

 The hacienda was acquired by the Development Bank of the Philippines (DBP) from the Magdalena

Estate, Inc. through a Deed of Cession in Payment of Debt on May 19, 1971, and by a Deed of Assignment executed by the Philippine National Bank in favor of DBP on February 8, 1973.

Pursuant to Executive Order No. 14 issued on February 3, 1987 by President Corazon C. Aquino, certain assets and liabilities of DBP were transferred to the Government of the Republic of the  Philippines. Among the properties that were transferred was Hacienda Looc.

 

On February 27, 1987, DBP executed a Deed of Transfer of the properties in favor of the government. On the same date, a Trust Agreement was entered into by the government and the Asset Privatization Trust (APT) whereby the latter was constituted trustee of Hacienda Looc.

 On July 15, 1987, Republic Act (R.A.) No. 6657, otherwise known as the Comprehensive Agrarian

Reform Law (CARL), was enacted. Under the law, a Comprehensive Agrarian Reform Program (CARP) was to be undertaken by the government which shall cover, regardless of tenurial arrangement and commodity produced, all public and private agricultural lands as provided in the Constitution, including whenever applicable in accordance with law, other lands of the public domain suitable to agriculture.

On June 28, 1990, APT entered into a Memorandum of Agreement (MOA) with the Department of Agrarian Reform (DAR). Under the agreement, APT signified its intention to sell to DAR portions of the hacienda under the Voluntary Offer to Sell (VOS) scheme of R.A. No. 6657 on the condition that DAR will return to APT non-CARPable portions of the property.

APT ceded possession and control of the entire property to DAR for the latter to undertake a field verification and coverage of the CARPable areas of the hacienda.

Between 1991 and 1993, DAR generated 25 Certificates of Land Ownership Awards (CLOAs) to the farmers of the hacienda.

 On December 10, 1993, APT conducted a public bidding involving the property in question. Bellevue Properties, Inc. tendered the highest cash bid. It thereafter assigned the right to purchase the property to Manila Southcoast Development Corporation (MSDC), subrogating to the latter all its rights, claims and benefits under the DAR-APT memorandum of agreement. On March 7, 1995, MSDC filed an adverse claim over Hacienda Looc before the Register of Deeds of Nasugbu, Batangas. In the same year, MSDC was able to register the disputed ten parcels of land of the hacienda with an aggregate area of 1,219.0133 hectares. These are as follows: TCT No. Lot No. Area (has.) R.O.72098 780-5 117.2230 MSDC72099 780-6 50.6760 MSDC73000 780-11 135.2297 MSDC73001 780-12 133.4841 MSDC73002 780-13 79.4639 MSDC73003 780-14 113.0728 MSDC73004 780-15 30.6594 MSDC73005 780-32 58.0232 MSDC73006 780-19 266.8548 MSDC73007 780-16 234.3264 MSDCTOTAL 1,219.0133

  On April 10, 1995, MSDC filed a petition before the Department of Agrarian Reform Adjudication

Board (DARAB), Region IV, for 1) the cancellation of the notices of acquisition issued by DAR; 2) the cancellation of the CLOAs; and 3) the conversion of the property into non-agricultural uses. The case was docketed as DARAB Case No. (DCN) 3468.

 The case was subsequently referred by DARAB to the Provincial Agrarian Reform Adjudication Board

(PARAD) of Batangas. On May 17, 1995, MSDC filed an amended petition before the PARAD with the same content and relief.

 On May 30, 1995, Provincial Agrarian Reform Adjudicator Antonio Cabili issued an Order stopping all

joint venture agreements in Hacienda Looc. Due to a Motion for Inhibition filed by one of the lawyers involved in the case, however, Cabili inhibited himself from the proceedings and elevated the case to the Regional Agrarian Reform Adjudication Board (RARAD) under Adjudicator Fe Arche-Manalang on June 28, 1995.[4]

 On October 17, 1995, MSDC, Carmona Realty and private respondent executed a Memorandum of Agreement (MOA) to enable MSDC and private respondent to have a joint venture agreement relative to the development of Hacienda Looc into a mixed-use residential, commercial, resort, leisure and recreational complex. Likewise, under the agreement, MSDC and private respondent shall immediately develop about 1,269 hectares of the hacienda, comprised largely of the afore-mentioned ten parcels of land.

Between the months of January and June of 1996, the DAR Regional Adjudicator issued three Partial Summary Judgments canceling the fifteen (15) CLOAs issued to the farmers, including those covering the ten parcels of land. The cancellation was grounded on the waiver allegedly executed by the farmer-beneficiaries who declared that the lands they were tilling were not suitable for agriculture.

On October 4, 1996, private respondent, by virtue of a Joint Venture Agreement with MSDC for the purpose of developing the area covered by the ten cancelled CLOAs, filed a Petition for Exclusion [5] of the subject lots from CARP coverage on the ground that they had an average slope of more than eighteen percent (18%), and the area has no semblance of agricultural development whatsoever.[6]

 Meanwhile, petitioners, along with the other farmer-beneficiaries affected by the order, filed a

complaint with the Office of the DAR Secretary objecting to the cancellation of their respective CLOAs. According to them, even before MSDC and private respondent Fil-Estate entered into such an agreement, heavily armed security guards brought several bulldozers and large equipment into the hacienda, and soon launched a massive operation for the leveling of the area and the eviction of the farmers. Petitioners added that: they were never informed of the proceedings concerning the cancellation of the CLOAs or of the application by respondent for the exemption of the subject lots from CARP; MSDC introduced as evidence fraudulently acquired and perjured documents such as the supposed sworn statements of deceased CLOA holders;MSDC threatened and intimidated the farmers to sign blank waivers and declarations of abandonment of the area purportedly because the land is non-agricultural in nature; and, the DAR lawyers appointed to protect the rights and interests of the affected farmers colluded with MSDC.[7]

On October 16, 1996, the DAR Secretary directed Undersecretary for Field Operations Hector D. Soliman to conduct an investigation regarding the cancellation of the CLOAs that were previously issued to the farmers of Hacienda Looc, as well as the development/conversion activities undertaken by private respondent in the areas concerned.

 Public hearings were respectively conducted, and on December 18, 1996, Undersecretary Soliman

submitted his fact-finding report[8] with the following recommendations: 1.                  Immediately issue a cease and desist order that will temporarily stop the

development of the area, considering that there is still a pending application for exemption of the property, and the determination of the coverage of the property has not been finally acted upon by the Secretary;

 2.                  Immediately designate a substitute lawyer who will defend the interests and

concerns of the public respondent DAR, [and] the integrity of the CLOAs, to the extent of the 1,152 hectares identified by the LBP and the Task Force Hacienda Looc as suitable for agriculture;

 3.                  Constitute an investigating panel to be headed by Director George Lucero as

Resident Ombudsman, to look into the alleged falsification of the signature of Maximino de Joya, and others similarly situated, who was supposed to have been deceased, at the time of the signature of the waiver, and to recommend the prosecution of erring personnel of government, including the DAR, if any there be;

 4.                  Direct the Regional Office to conduct a massive information campaign in the

area, regarding the following: 

a. The extent of the coverage of the sale between APT and the MSDC;b. The status of the ongoing case between MSDC and the farmers;c.                   The rights and responsibilities of the EP holders who are not covered by

the case under litigation; andd.                  Such other information that will fully apprise the farmers of their rights

and responsibilities under agrarian law. 

5.                  Intervene in the ECC process being undertaken by the DENR by preparing the following interventions:

 a. With respect to the areas which are still pending consideration by the DARAB, to

request that the issuance of the ECC be suspended until such time that matters which are still under litigation are finally resolved; and

b.                  With respect to the areas which are above 18% slope and undeveloped, to manifest officially with the DENR that such areas, although exempted from CARP, should be preserved for reforestation purposes, in order not to aggravate soil erosion and jeopardize the lowland agricultural activities.

 6.                  Urge the DOT to convene a multi-agency, multi-sectoral review committee that

will review the development plan of Fil-Estate and determine whether it conforms to the projected tourism master plan for the area, if any, and whether it conforms to agrarian and environmental laws. Such review committee should be lodged with the appropriate Cabinet Cluster.

  On the basis of the fact-finding report of Undersecretary Soliman, the DAR Secretary issued

memoranda[9] on December 18, 1996, adopting item Nos. 2, 3 and 4 of the report. Meanwhile, on December 26, 1996, the DAR Regional Director for Region IV issued an Order

granting the Petition for Exclusion filed by Fil-Estate pursuant to Administrative Order (A.O.) No. 10, Series of 1994. As a result, the subject ten parcels of land with an aggregate area of 1,219.0133 hectares were exempted from CARP coverage.

 On January 29, 1997, petitioners, aggrieved by the Order of Exclusion, filed their appeal with the

Office of the DAR Secretary. They assailed the aforementioned order on the grounds that 1) there was no due process as they were not informed of the exemption case or the proceedings thereof; 2) the cancellation of the CLOAs was based on the waivers allegedly executed by the farmer-beneficiaries; and 3) the property was agriculturally developed and, therefore, covered by CARP.

 In view of the appeal, the Office of the DAR Secretary organized a team composed of DAR and LBP

officials to perform the following: 1) segregate the contested area from the rest of the hacienda through boundary surveys; 2) determine, from the slope maps, the slope of the contested areas; 3) conduct a lot by lot determination of the areas to be placed under CARP by identifying and segregating the agriculturally developed areas, if any; 4) receive evidence to be presented by the protesting farmers and other farmers interested in the case; and 5) submit its reports on the contested lots.[10]

 On March 25, 1998, the DAR Secretary issued an Order, the pertinent portion of which reads:

The Team, after making its findings, had also recommended the coverage of the developed areas and the exclusion of the undeveloped areas. x x x On 31 December 1997, Undersecretary Bulatao, Chairperson of the Inter-Agency Task Force, submitted his recommendation, hereunder quoted x x x: 

x x x 

The main implications of these recommendations are as follow:                     farmers issued Emancipation Patents (EPs) over some 1,197

hectares of rice land maintain their ownership of these lands;                     farmers who cultivated portions of the other areas covered by

CLOAs before and up to the time the CLOAs were supposedly cancelled will have their lands covered under compulsory acquisition, subject to the three-hectare ceiling for beneficiaries and appropriate valuation and payment procedures;

                     Manila Southcoast Development Corporation will now have a

clean title to the rest of the land and can proceed with its development directly or indirectly and will be compensated for the hectarage removed from its title due to coverage under RA No. 6657.

 

It is also worthwhile to note that in all the proceedings, the affected beneficiaries were given more than sufficient opportunity to present their claims. In addition, this case has taken too long to resolve because of the different motions and petitions by all parties. 

WHEREFORE, given these different recommendations of four different Committees and Task Forces, this Order is hereby issued as follows:

 1.                  Coverage of the following agriculturally developed areas, re-documentation of

the same under CARP acquisition and awarded to individual beneficiaries found to be qualified under the CARL:

 a.                   Lot No. 5: 2.3029 hectares as farmlots and 0.0666 as homelots,

the homelots to be awarded to actual occupants thereof. Priority for the award of the farmlot will be the claimant, UNLESS there is reason to disqualify him and said award shall not result in the claimant becoming an owner of more than three (3) hectares of agricultural land;

 b.                  Lot No. 6: 12.8467 hectare farmlot. Priority for the award of

the farmlot will be the claimant, UNLESS there is reason to disqualify him and said award shall not result in the claimant becoming an owner of more than three (3) hectares of agricultural land;

 c.                   Lot. No. 11: 1,1234 hectares farmlot and 0.6388 homelots to

be awarded to actual occupants therof. Priority for the award of the farmlot will be the claimant, UNLESS there is reason to disqualify him and said award shall not result in the claimant becoming an owner of more than three (3) hectares of agricultural land;

 d.                  Lot No. 12: 13.894 hectares as farmlots. Some 2.3674 has.

and .4586 has. were deducted from the claim of Mr. Jaime Sobremonte and Mr. Leonardo Caronilla, respectively, as these already exceed the three hectares award ceiling. The area has been scraped by previous bulldozing by the applicant such that it becomes impossible for the team to determine the actual agricultural development of the area. In view of the situation, the Task Force deemed it proper to award the land to the claimants as the presumption must tilt in their favor, there being no contrary evidence presented by the applicant. The award shall not exceed three hectares per claimant UNLESS there is reason to disqualify him and said award shall not result in the claimant becoming an owner of more than three (3) hectares of agricultural land;

 e.                   Lot No. 13: 0.2251 hectare farmlot. Priority for the award of

the farmlot will be the claimant, UNLESS there is reason to disqualify him and said award shall not result in the claimant becoming an owner of more than three (3) hectares of agricultural land;

 g.                   Lot No. 15: 76.376 hectares as farmlot. However, the coverage

of the areas identified as fishponds shall be suspended until the Courts resolve the constitutionality of the law exempting fishponds from the coverage of agrarian reform. Priority for the award of the farmlot will be the claimant, UNLESS there is reason to disqualify him and said award shall not result in the claimant becoming an owner of more than three (3) hectares of agricultural land;

 h.                   Lot No. 16: 14.2026 hectares as farmlots. Priority for the

award of the farmlot will be the claimant, UNLESS there is reason

to disqualify him and said award shall not result in the claimant becoming an owner of more than three (3) hectares of agricultural land;

 i.                     Lot No. 19: 16.5695 hectares as farmlots. Priority for the

award of the farmlot will be the claimant, UNLESS there is reason to disqualify him and said award shall not result in the claimant becoming an owner of more than three (3) hectares of agricultural land;

 j.                    Approval of the distribution of homelots in Lots No. 9 and

20. As manifested, the total area of 65.38 hectares shall be distributed primarily as homelots to actual occupants. The area within Lot 20 which is agriculturally developed shall be subjected to further verification as to its CARPability and the same shall also be awarded as farmlots, covered by Certificates of Land Ownership Awards (CLOAS). Priority for the award of the farmlot will be the claimant, UNLESS there is reason to disqualify him and said award shall not result in the claimant becoming an owner of more than three (3) hectares of agricultural land.

 2.                  Maintaining the coverage of some 1,197 hectares, more or less, of lands under

Operation Land Transfer and conducting survey of the actual tillers of the land for purposes of awarding the same /re-allocating the same to its actual tillers in accordance with the land to the tiller principle.

 3.                  On the Matter of Environmental Protection. In areas that will be exempted by

virtue of Section 10, of RA 6657, any development thereon, should be consistent with the intent of the law to preserve these lands for forest cover and soil conservation. It is therefore recommended that the DENR study the development of the area with this end in view in its issuance of ECCs.

 Particularly, it is recommended that a buffer zone be established by the DENR to ensure protection of OLT and CARP lands from damage or erosion, as a result of any development to be implemented in excluded areas; 

4.                  Re-conveyance of the exempt parcels to the Asset Privatization Trust, or its successors-in-interest, after the CLOAs are properly cancelled by the proper forum;

 5.                  Nullifying the alleged sale or transfer of rights over the CLOAs as contrary to the

provisions of agrarian law; and 6.                  Directing the Regional Director to post a copy of this Order, including the maps

attached hereto in the barangay halls of Brgys. Calayo and Papaya to afford all parties the opportunity to be notified and to cause the amendments of CLOAs issued.

 SO ORDERED.[11]

  

Petitioners filed a motion for reconsideration but the same was denied by the DAR Secretary in an order dated June 15, 1998. On June 29, 1998, petitioners appealed the Orders of the DAR Secretary to the Office of the President (OP). On July 5, 2000, the OP, through Executive Secretary Ronaldo Zamora, issued a decision dismissing the appeal, and affirming the challenged orders of the DAR. Thus:

 At the outset, four (4) premises need to be underscored: 

First, while FEPI does not wholly agree with the appealed orders of the DAR, it chose to assail the same before the Court of Appeals via a petition for partial review. Hence, insofar as this Office is concerned, FEPI is theoretically presumed to be satisfied with the adjudication made by the DAR Secretary (AG&P v. Court of Appeals, 247 SCRA 606). The entrenched rule is that a party who has not himself appealed cannot secure from the appellate court/body any affirmative relief other than those granted him in the decision of the court/body below (Carrion v. CA, 260 SCRA 682).

 Second, the cancellation of the ten (10) CLOAs, i.e., CLOA Nos. 4152, 4253, 4157,

4158, 4159, 4474, 4475, 4476, 4478 and 6662, is, as the DAR declared, strictly not an issue here, the cancellation having been effected by the Regional Agrarian Reform Adjudicator (RARAD), per his decision in DARAB Case No. IV Ba 3468, dated January 8, 1986. This decision is beyond the reviewing authority of this Office for, apart from its having become final and executory, such decision is appealable to the DAR Adjudication Board whose decision in turn is appealable to the Court of Appeals (DARAB v. CA, 266 SCRA 176; Machete v. CA, 250 SCRA 176).

 Third, only a portion of Hacienda Looc the exclusion of which from CARP coverage

FEPI sought was originally involved in this case. In absolute terms, only the 1,219.09-hectare portion of the hacienda, corresponding to the ten (10) lots that the CLOAs cover but which had been cancelled, was the subject of the basic petition of FEPI for exclusion, albeit the appealed orders cover areas not contemplated in the underlying petition for exclusion.

 Fourth, the appealed orders, by excluding/exempting from CARP coverage pursuant

to Section 10 of R.A. No. 6657, the contested ten (10) lots, save for some 69.50 hectares found to be agriculturally developed, hence to be covered under CARP, virtually affirmed with modification   the order of Regional Director Remigio Tabones, dated December 26, 1996

 In all, this Office finds, as did the DAR Secretary and, before him, the Regional

Director, DAR Region IV, the exclusion from CARP coverage of the ten (10) lots subject of FEPIs petition for exclusion to be proper

 With the foregoing disquisitions, this Office deems it unnecessary to discuss the

other issues raised by appellants, e.g., the validity of the contract of sale entered into by and between the APT and MSDC concerning Hacienda LOOC, the effectivity of Proclamation Nos. 1520 and 1801, and the applicability of DOJ Opinion No. 44, s. of 1990, touching as they do on what the DAR described as collateral matters which have no decisive bearing in the resolution of this case

 WHEREFORE, premises considered, the instant appeal is hereby Dismissed. The

appealed DAR orders, Dated March 25, 1998 and June 15, 1998 are accordingly Affirmed. SO ORDERED.[12]

 Petitioners filed a petition for review under Rule 43 of the Rules of Court with the Court of Appeals (CA) assailing the decision of the Executive Secretary. The CA, in its resolution, dated September 4, 2000, denied the petition thus:

 x x x

 Contrary to Sec. 5, Rule 7 of the 1997 Rules on Civil Procedure, the verification and certification of non-forum shopping was signed by only one (Guillermo Bautista) of the petitioners. Moreover, in violation of Sec. 13, Rule 13 and Sec. 6(c) Rule 43, the petition contains no affidavit of service while the assailed decision, material portions of the record and other supporting papers are merely photocopies. 

WHEREFORE, for being insufficient in form and substance, the petition is DISMISSED.

 SO ORDERED.[13]

 Petitioners motion for reconsideration was likewise denied by the CA in its resolution dated May 8,

2001: In her Affidavit (Annex A, Motion), Ms. Maria Victoria Lirio, secretary of

petitioners counsel, explained that she failed to attach to the petition the Special Power of Attorney (Annex B,id.) executed by the other petitioners in favor of Guillermo Bautista empowering the latter to represent them in the instant petition. However, the Special Power of Attorney was acknowledged by only 10 out of the 45 petitioners. Consequently, the certificate of non-forum shopping is still defective.

 Moreover, petitioners did not correct the defects of the petition, i.e., absence of the

affidavit of service and non-submission of certified true copies of the assailed decision and other papers.

 Apropos is the Supreme Courts ruling that (h)aving failed to observe very elementary

rules of procedure which are mandatory, petitioner caused her own predicament and to exculpate her from the compulsory coverage of such rules is to undermine the stability of the judicial process, as the bench and bar will be confounded by such irritating uncertainties as when to obey and when to ignore the rules. (Tan v. Court of Appeals, 295 SCRA 755)

 WHEREFORE, for lack of merit, the motion for reconsideration is DENIED. SO ORDERED[14]

   

Hence, this petition raising these issues: 1.                  Whether the Court of Appeals committed grave abuse of discretion in dismissing

the petition for review filed under Rule 43 of the Rules of Court, notwithstanding the fact that it would result to manifest injustice;[15] and

 2.                  Whether the Court of Appeals committed grave abuse of discretion in denying

the substantial rights of the petitioners.[16]

 Petitioners argue as follows: First, the cancellation of the ten Certificates of Land Ownership Award (CLOAs) is an issue that has to be resolved because the farmers were not accorded due process. The proceedings for the exemption of the property from CARP coverage, and the cancellation of the CLOAs were improvidently done without the knowledge and participation of the affected farmers. Second, the signatures in the waivers allegedly executed by the farmers who declared that the lands they were tilling were not agriculturally viable and developed were forged as the latter had been dead at the time the waivers were supposedly executed; Third, the segregation of a portion of the hacienda which involves 1,219 hectares that private respondent applied for exemption from CARP coverage for conversion to non-agricultural use such as a golf course, will adversely affect the entire ecological balance and social order of the hacienda; Fourth, the hacienda is agricultural in character, therefore, covered by CARP. It is suitable for agriculture, that is, developed and productive, and the fact that only patches or certain portions of the disputed lots are actually planted with crops does not make them non-agricutural;

 Fifth, in the fact-finding report, DAR Undersecretary Soliman stated that the question as to whether the area

is excluded from CARP coverage because it had been reclassified as a tourism area has not been resolved yet by the DAR Secretary, who, under Administrative Order No. 6, Series of 1994, is mandated to issue certificates of

exemption under DOJ Opinion No. 44. In addition, tourist zones are not included among the categories of lands which are exempted under Section 3(c) of R.A. No. 6657. Finally, the area to be excluded has not been sufficiently delineated in order to make the exemption realistic and implementable at an operational level, unlike other municipal ordinances which are accompanied by specific land use maps of adequate scale and size; Sixth, with respect to petitioners non-compliance with Sec. 5, Rule 7 of the 1997 Rules on Civil Procedure on verification and certification of non-forum shopping as a ground cited by the CA for the dismissal of the petition, petitioners aver that the Special Power of Attorney (SPA) of Guillermo Bautista which they had executed way before constituting him as their attorney-in-fact was not attached to the petition due to the inadvertence of their counsels secretary; Seventh, on the point that petitioners violated Sec. 13, Rule 13 and Sec. 6(c), Rule 43, petitioners state that copies of the petition to the Court of Appeals were actually furnished to the DAR Secretary, the DAR Regional Director and the adverse counsel via personal service as shown by their respective signatures on the last page of the petition attesting to the receipt thereof; and, Finally, petitioners insist that they should be given a fair chance to present the merits of their case because technicalities must not be used to stay the hands of justice and frustrate the novel objectives of the agrarian law. Clearly, a resolution of the case rests upon a determination of whether the disputed ten parcels of land are exempt from CARP coverage. In relation to the instant petition, Section 10 of R.A. No 6657 states that all lands with eighteen percent (18%) slope and over, except those already developed shall be exempt from the coverage of this Act. One of the reasons why petitioners are objecting to the cancellation of their CLOAs and the exclusion of the ten parcels of land from CARP coverage is because these lots are agricultural and developed. While it is true that the DAR officials have generally found the lots to have an average slope of 18%, the contention that the same have been cultivated and are actually agriculturally developed so as to make them subject to CARP is a factual matter that must be looked into. As indicated by Undersecretary Soliman in his fact-finding report:

 [A]s a general rule, lands which are above 18% slope are exempt from CARP, but their land use should be compatible with the underlying basis for exemption, meaning reforestation and soil conservation. Therefore, as a general rule also, these areas should not be converted to uses other than agro-forestry, reforestation, or other environmentally sustainable uses. Otherwise, the very purpose of their exemption from CARP (and their shifting to the DENRs reforestation and soil conservation program) would be circumvented all the more. Having clearly stated the position, we now come to the discussion of the 1,152 hectares more or less of developed areas within the 25 titles. It could be generally conceded that the areas which are subject of the 25 CLOA titles are sloping areas, and are above 18% in slope. However, under Sec. 10 of RA 6657, if the area is developed, then they could still be covered by CARP. It is also a fact that the Task Force Hacienda Looc did not recommend the cancellation of all the titles, but only 2,829 hectares, contending that some 1,152 hectares are developed and therefore could be covered by CARP. Moreover, this recommendation has been approved by then Regional Director, Percival Dalugdug. A quick perusal of the records reveals that this very outstanding fact that some 1,152 hectares of land which are spread out over 25 titles under CLOA, was in fact recommended to be covered under CARP but somehow, this fact was lost in the process. What was primarily relied upon by the adjudicator was the waivers signed by the farmers who declared that the land they are tilling is not suitable for agriculture. We beg to disagree with the waivers signed by the farmers in this particular case, considering their uniform phraseology and format. They have obviously been prepared y persons who are interested in having the titles cancelled, and the farmers have been merely asked to sign the same. The primordial authority of the DAR, that of making an administrative determination of whether the land is suitable for agriculture or not, has been supplanted in this case by a determination of the farmers whether the land is suitable or not for agriculture[17]

Based on the foregoing, and upon a review of the records, the Court agrees with petitioners that there are factual matters that should be re-examined to properly resolve this case. This Court is not a trier of facts. The CA, having the appellate jurisdiction to rule on the controversy, must re-evaluate the factual aspects of the case in order to prevent a miscarriage of justice. 

While, generally, petitioners failure to comply with the procedural requirements prescribed under the Rules of Court would warrant the dismissal of the petition,[18]fundamental considerations of substantial justice persuade the Court to have the present case decided on the merits rather than dismissed on a technicality. [19] It is settled that the rules of procedure are not to be applied in a very strict and technical sense. These are used only to help secure rather than override substantial justice. The stringent application of the rules must yield to the demands of substantial justice.[20]

 WHEREFORE, the petition is GRANTED. The Resolutions of the Court of Appeals, dated November 23, 2000 and May 8, 2001, in CA-G.R. SP No. 60203 areREVERSED and SET ASIDE. The case is hereby REMANDED to the Court of Appeals for it to render a decision on the merits with DISPATCH, giving this Court a report on the progress thereon every three months.No costs. SO ORDERED. 

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

 

G.R. No. 127876 December 17, 1999

ROXAS & CO., INC., petitioner, vs.THE HONORABLE COURT OF APPEALS, DEPARTMENT OF AGRARIAN REFORM, SECRETARY OF AGRARIAN REFORM, DAR REGIONAL DIRECTOR FOR REGION IV, MUNICIPAL AGRARIAN REFORM OFFICER OF NASUGBU, BATANGAS and DEPARTMENT OF AGRARIAN REFORM ADJUDICATION BOARD,respondents.

 

PUNO, J.:

This case involves three (3) haciendas in Nasugbu, Batangas owned by petitioner and the validity of the acquisition of these haciendas by the government under Republic Act No. 6657, the Comprehensive Agrarian Reform Law of 1988.

Petitioner Roxas & Co. is a domestic corporation and is the registered owner of three haciendas, namely, Haciendas Palico, Banilad and Caylaway, all located in the Municipality of Nasugbu, Batangas. Hacienda Palico is 1,024 hectares in area and is registered under Transfer Certificate of Title (TCT) No. 985. This land is covered by Tax Declaration Nos. 0465, 0466, 0468, 0470, 0234 and 0354. Hacienda Banilad is 1,050 hectares in area, registered under TCT No. 924 and covered by Tax Declaration Nos. 0236, 0237 and 0390. Hacienda Caylaway is 867.4571 hectares in area and is registered under TCT Nos. T-44662, T-44663, T-44664 and T-44665.

The events of this case occurred during the incumbency of then President Corazon C. Aquino. In February 1986, President Aquino issued Proclamation No. 3 promulgating a Provisional Constitution. As head of the provisional government, the President exercised legislative power "until a legislature is elected and convened under a new Constitution." 1 In the exercise of this legislative power, the President signed on July 22, 1987, Proclamation No. 131 instituting a Comprehensive Agrarian Reform Program and Executive Order No. 229 providing the mechanisms necessary to initially implement the program.

On July 27, 1987, the Congress of the Philippines formally convened and took over legislative power from the President. 2 This Congress passed Republic Act No. 6657, the Comprehensive Agrarian Reform Law (CARL) of 1988. The Act was signed by the President on June 10, 1988 and took effect on June 15, 1988.

Before the law's effectivity, on May 6, 1988, petitioner filed with respondent DAR a voluntary offer to sell Hacienda Caylaway pursuant to the provisions of E.O. No. 229. Haciendas Palico and Banilad were later placed under compulsory acquisition by respondent DAR in accordance with the CARL.

Hacienda Palico

On September 29, 1989, respondent DAR, through respondent Municipal Agrarian Reform Officer (MARO) of Nasugbu, Batangas, sent a notice entitled "Invitation to

Parties" to petitioner. The Invitation was addressed to "Jaime Pimentel, Hda. Administrator, Hda. Palico." 3 Therein, the MARO invited petitioner to a conference on October 6, 1989 at the DAR office in Nasugbu to discuss the results of the DAR investigation of Hacienda Palico, which was "scheduled for compulsory acquisition this year under the Comprehensive Agrarian Reform Program." 4

On October 25, 1989, the MARO completed three (3) Investigation Reports after investigation and ocular inspection of the Hacienda. In the first Report, the MARO found that 270 hectares under Tax Declaration Nos. 465, 466, 468 and 470 were "flat to undulating (0-8% slope)" and actually occupied and cultivated by 34 tillers of sugarcane. 5 In the second Report, the MARO identified as "flat to undulating" approximately 339 hectares under Tax Declaration No. 0234 which also had several actual occupants and tillers of sugarcane; 6 while in the third Report, the MARO found approximately 75 hectare under Tax Declaration No. 0354 as "flat to undulating" with 33 actual occupants and tillers also of sugarcane. 7

On October 27, 1989, a "Summary Investigation Report" was submitted and signed jointly by the MARO, representatives of the Barangay Agrarian Reform Committee (BARC) and Land Bank of the Philippines (LBP), and by the Provincial Agrarian Reform Officer (PARO). The Report recommended that 333.0800 hectares of Hacienda Palico be subject to compulsory acquisition at a value of P6,807,622.20. 8 The following day, October 28, 1989, two (2) more Summary Investigation Reports were submitted by the same officers and representatives. They recommended that 270.0876 hectares and 75.3800 hectares be placed under compulsory acquisition at a compensation of P8,109,739.00 and P2,188,195.47, respectively. 9

On December 12, 1989, respondent DAR through then Department Secretary Miriam D. Santiago sent a "Notice of Acquisition" to petitioner. The Notice was addressed as follows:

Roxas y Cia, Limited

Soriano Bldg., Plaza Cervantes

Manila, Metro Manila. 10

Petitioner was informed that 1,023.999 hectares of its land in Hacienda Palico were subject to immediate acquisition and distribution by the government under the CARL; that based on the DAR's valuation criteria, the government was offering compensation of P3.4 million for 333.0800 hectares; that whether this offer was to be accepted or rejected, petitioner was to inform the Bureau of Land Acquisition and Distribution (BLAD) of the DAR; that in case of petitioner's rejection or failure to reply within thirty days, respondent DAR shall conduct summary administrative proceedings with notice to petitioner to determine just compensation for the land; that if petitioner accepts respondent DAR's offer, or upon deposit of the compensation with an accessible bank if it rejects the same, the DAR shall take immediate possession of the land. 11

Almost two years later, on September 26, 1991, the DAR Regional Director sent to the LBP Land Valuation Manager three (3) separate Memoranda entitled "Request to Open Trust Account." Each Memoranda requested that a trust account representing the valuation of three portions of Hacienda Palico be opened in favor of the petitioner in view of the latter's rejection of its offered value. 12

Meanwhile in a letter dated May 4, 1993, petitioner applied with the DAR for conversion of Haciendas Palico and Banilad from agricultural to non-agricultural lands under the

provisions of the CARL. 13 On July 14, 1993, petitioner sent a letter to the DAR Regional Director reiterating its request for conversion of the two haciendas. 14

Despite petitioner's application for conversion, respondent DAR proceeded with the acquisition of the two Haciendas. The LBP trust accounts as compensation for Hacienda Palico were replaced by respondent DAR with cash and LBP bonds. 15 On October 22, 1993, from the mother title of TCT No. 985 of the Hacienda, respondent DAR registered Certificate of Land Ownership Award (CLOA) No. 6654. On October 30, 1993, CLOA's were distributed to farmer beneficiaries. 16

Hacienda Banilad

On August 23, 1989, respondent DAR, through respondent MARO of Nasugbu, Batangas, sent a notice to petitioner addressed as follows:

Mr. Jaime Pimentel

Hacienda Administrator

Hacienda Banilad

Nasugbu, Batangas 17

The MARO informed Pimentel that Hacienda Banilad was subject to compulsory acquisition under the CARL; that should petitioner wish to avail of the other schemes such as Voluntary Offer to Sell or Voluntary Land Transfer, respondent DAR was willing to provide assistance thereto. 18

On September 18, 1989, the MARO sent an "Invitation to Parties" again to Pimentel inviting the latter to attend a conference on September 21, 1989 at the MARO Office in Nasugbu to discuss the results of the MARO's investigation over Hacienda Banilad. 19

On September 21, 1989, the same day the conference was held, the MARO submitted two (2) Reports. In his first Report, he found that approximately 709 hectares of land under Tax Declaration Nos. 0237 and 0236 were "flat to undulating (0-8% slope)." On this area were discovered 162 actual occupants and tillers of sugarcane. 20 In the second Report, it was found that approximately 235 hectares under Tax Declaration No. 0390 were "flat to undulating," on which were 92 actual occupants and tillers of sugarcane. 21

The results of these Reports were discussed at the conference. Present in the conference were representatives of the prospective farmer beneficiaries, the BARC, the LBP, and Jaime Pimentel on behalf of the landowner. 22After the meeting, on the same day, September 21, 1989, a Summary Investigation Report was submitted jointly by the MARO, representatives of the BARC, LBP, and the PARO. They recommended that after ocular inspection of the property, 234.6498 hectares under Tax Declaration No. 0390 be subject to compulsory acquisition and distribution by CLOA. 23 The following day, September 22, 1989, a second Summary Investigation was submitted by the same officers. They recommended that 737.2590 hectares under Tax Declaration Nos. 0236 and 0237 be likewise placed under compulsory acquisition for distribution. 24

On December 12, 1989, respondent DAR, through the Department Secretary, sent to petitioner two (2) separate "Notices of Acquisition" over Hacienda Banilad. These Notices were sent on the same day as the Notice of Acquisition over Hacienda Palico.

Unlike the Notice over Hacienda Palico, however, the Notices over Hacienda Banilad were addressed to:

Roxas y Cia. Limited

7th Floor, Cacho-Gonzales Bldg. 101 Aguirre St., Leg.

Makati, Metro Manila. 25

Respondent DAR offered petitioner compensation of P15,108,995.52 for 729.4190 hectares and P4,428,496.00 for 234.6498 hectares. 26

On September 26, 1991, the DAR Regional Director sent to the LBP Land Valuation Manager a "Request to Open Trust Account" in petitioner's name as compensation for 234.6493 hectares of Hacienda Banilad. 27 A second "Request to Open Trust Account" was sent on November 18, 1991 over 723.4130 hectares of said Hacienda. 28

On December 18, 1991, the LBP certified that the amounts of P4,428,496.40 and P21,234,468.78 in cash and LBP bonds had been earmarked as compensation for petitioner's land in Hacienda Banilad. 29

On May 4, 1993, petitioner applied for conversion of both Haciendas Palico and Banilad.

Hacienda Caylaway

Hacienda Caylaway was voluntarily offered for sale to the government on May 6, 1988 before the effectivity of the CARL. The Hacienda has a total area of 867.4571 hectares and is covered by four (4) titles — TCT Nos. T-44662, T-44663, T-44664 and T-44665. On January 12, 1989, respondent DAR, through the Regional Director for Region IV, sent to petitioner two (2) separate Resolutions accepting petitioner's voluntary offer to sell Hacienda Caylaway, particularly TCT Nos. T-44664 and T-44663. 30 The Resolutions were addressed to:

Roxas & Company, Inc.

7th Flr. Cacho-Gonzales Bldg.

Aguirre, Legaspi Village

Makati, M. M 31

On September 4, 1990, the DAR Regional Director issued two separate Memoranda to the LBP Regional Manager requesting for the valuation of the land under TCT Nos. T-44664 and T-44663. 32 On the same day, respondent DAR, through the Regional Director, sent to petitioner a "Notice of Acquisition" over 241.6777 hectares under TCT No. T-44664 and 533.8180 hectares under TCT No. T-44663. 33 Like the Resolutions of Acceptance, the Notice of Acquisition was addressed to petitioner at its office in Makati, Metro Manila.

Nevertheless, on August 6, 1992, petitioner, through its President, Eduardo J. Roxas, sent a letter to the Secretary of respondent DAR withdrawing its VOS of Hacienda Caylaway. The Sangguniang Bayan of Nasugbu, Batangas allegedly authorized the reclassification of Hacienda Caylaway from agricultural to non-agricultural. As a result,

petitioner informed respondent DAR that it was applying for conversion of Hacienda Caylaway from agricultural to otheruses. 34

In a letter dated September 28, 1992, respondent DAR Secretary informed petitioner that a reclassification of the land would not exempt it from agrarian reform. Respondent Secretary also denied petitioner's withdrawal of the VOS on the ground that withdrawal could only be based on specific grounds such as unsuitability of the soil for agriculture, or if the slope of the land is over 18 degrees and that the land is undeveloped. 35

Despite the denial of the VOS withdrawal of Hacienda Caylaway, on May 11, 1993, petitioner filed its application for conversion of both Haciendas Palico and Banilad. 36 On July 14, 1993, petitioner, through its President, Eduardo Roxas, reiterated its request to withdraw the VOS over Hacienda Caylaway in light of the following:

1) Certification issued by Conrado I. Gonzales, Officer-in-Charge, Department of Agriculture, Region 4, 4th Floor, ATI (BA) Bldg., Diliman, Quezon City dated March 1, 1993 stating that the lands subject of referenced titles "are not feasible and economically sound for further agricultural development.

2) Resolution No. 19 of the Sangguniang Bayan of Nasugbu, Batangas approving the Zoning Ordinance reclassifying areas covered by the referenced titles to non-agricultural which was enacted after extensive consultation with government agencies, including [the Department of Agrarian Reform], and the requisite public hearings.

3) Resolution No. 106 of the Sangguniang Panlalawigan of Batangas dated March 8, 1993 approving the Zoning Ordinance enacted by the Municipality of Nasugbu.

4) Letter dated December 15, 1992 issued by Reynaldo U. Garcia of the Municipal Planning & Development, Coordinator and Deputized Zoning Administrator addressed to Mrs. Alicia P. Logarta advising that the Municipality of Nasugbu, Batangas has no objection to the conversion of the lands subject of referenced titles to non-agricultural. 37

On August 24, 1993 petitioner instituted Case No. N-0017-96-46 (BA) with respondent DAR Adjudication Board (DARAB) praying for the cancellation of the CLOA's issued by respondent DAR in the name of several persons. Petitioner alleged that the Municipality of Nasugbu, where the haciendas are located, had been declared a tourist zone, that the land is not suitable for agricultural production, and that the Sangguniang Bayan of Nasugbu had reclassified the land to non-agricultural.

In a Resolution dated October 14, 1993, respondent DARAB held that the case involved the prejudicial question of whether the property was subject to agrarian reform, hence, this question should be submitted to the Office of the Secretary of Agrarian Reform for determination. 38

On October 29, 1993, petitioner filed with the Court of Appeals CA-G.R. SP No. 32484. It questioned the expropriation of its properties under the CARL and the denial of due process in the acquisition of its landholdings.

Meanwhile, the petition for conversion of the three haciendas was denied by the MARO on November 8, 1993.

Petitioner's petition was dismissed by the Court of Appeals on April 28, 1994. 39 Petitioner moved for reconsideration but the motion was denied on January 17, 1997 by respondent court. 40

Hence, this recourse. Petitioner assigns the following errors:

A. RESPONDENT COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT PETITIONER'S CAUSE OF ACTION IS PREMATURE FOR FAILURE TO EXHAUST ADMINISTRATIVE REMEDIES IN VIEW OF THE PATENT ILLEGALITY OF THE RESPONDENTS' ACTS, THE IRREPARABLE DAMAGE CAUSED BY SAID ILLEGAL ACTS, AND THE ABSENCE OF A PLAIN, SPEEDY AND ADEQUATE REMEDY IN THE ORDINARY COURSE OF LAW — ALL OF WHICH ARE EXCEPTIONS TO THE SAID DOCTRINE.

B. RESPONDENT COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT PETITIONER'S LANDHOLDINGS ARE SUBJECT TO COVERAGE UNDER THE COMPREHENSIVE AGRARIAN REFORM LAW, IN VIEW OF THE UNDISPUTED FACT THAT PETITIONER'S LANDHOLDINGS HAVE BEEN CONVERTED TO NON-AGRICULTURAL USES BY PRESIDENTIAL PROCLAMATION NO. 1520 WHICH DECLARED THE MUNICIPALITY NASUGBU, BATANGAS AS A TOURIST ZONE, AND THE ZONING ORDINANCE OF THE MUNICIPALITY OF NASUGBU RE-CLASSIFYING CERTAIN PORTIONS OF PETITIONER'S LANDHOLDINGS AS NON-AGRICULTURAL, BOTH OF WHICH PLACE SAID LANDHOLDINGS OUTSIDE THE SCOPE OF AGRARIAN REFORM, OR AT THE VERY LEAST ENTITLE PETITIONER TO APPLY FOR CONVERSION AS CONCEDED BY RESPONDENT DAR.

C. RESPONDENT COURT OF APPEALS GRAVELY ERRED WHEN IT FAILED TO DECLARE THE PROCEEDINGS BEFORE RESPONDENT DAR VOID FOR FAILURE TO OBSERVE DUE PROCESS, CONSIDERING THAT RESPONDENTS BLATANTLY DISREGARDED THE PROCEDURE FOR THE ACQUISITION OF PRIVATE LANDS UNDER R.A. 6657, MORE PARTICULARLY, IN FAILING TO GIVE DUE NOTICE TO THE PETITIONER AND TO PROPERLY IDENTIFY THE SPECIFIC AREAS SOUGHT TO BE ACQUIRED.

D. RESPONDENT COURT OF APPEALS GRAVELY ERRED WHEN IT FAILED TO RECOGNIZE THAT PETITIONER WAS BRAZENLY AND ILLEGALLY DEPRIVED OF ITS PROPERTY WITHOUT JUST COMPENSATION, CONSIDERING THAT PETITIONER WAS NOT PAID JUST COMPENSATION BEFORE IT WAS UNCEREMONIOUSLY STRIPPED OF ITS LANDHOLDINGS THROUGH THE ISSUANCE OF CLOA'S TO ALLEGED FARMER BENEFICIARIES, IN VIOLATION OF R.A. 6657. 41

The assigned errors involve three (3) principal issues: (1) whether this Court can take cognizance of this petition despite petitioner's failure to exhaust administrative remedies;

(2) whether the acquisition proceedings over the three haciendas were valid and in accordance with law; and (3) assuming the haciendas may be reclassified from agricultural to non-agricultural, whether this court has the power to rule on this issue.

I. Exhaustion of Administrative Remedies.

In its first assigned error, petitioner claims that respondent Court of Appeals gravely erred in finding that petitioner failed to exhaust administrative remedies. As a general rule, before a party may be allowed to invoke the jurisdiction of the courts of justice, he is expected to have exhausted all means of administrative redress. This is not absolute, however. There are instances when judicial action may be resorted to immediately. Among these exceptions are: (1) when the question raised is purely legal; (2) when the administrative body is in estoppel; (3) when the act complained of is patently illegal; (4) when there is urgent need for judicial intervention; (5) when the respondent acted in disregard of due process; (6) when the respondent is a department secretary whose acts, as an alter ego of the President, bear the implied or assumed approval of the latter; (7) when irreparable damage will be suffered; (8) when there is no other plain, speedy and adequate remedy; (9) when strong public interest is involved; (10) when the subject of the controversy is private land; and (11) in quo warranto proceedings. 42

Petitioner rightly sought immediate redress in the courts. There was a violation of its rights and to require it to exhaust administrative remedies before the DAR itself was not a plain, speedy and adequate remedy.

Respondent DAR issued Certificates of Land Ownership Award (CLOA's) to farmer beneficiaries over portions of petitioner's land without just compensation to petitioner. A Certificate of Land Ownership Award (CLOA) is evidence of ownership of land by a beneficiary under R.A. 6657, the Comprehensive Agrarian Reform Law of 1988. 43 Before this may be awarded to a farmer beneficiary, the land must first be acquired by the State from the landowner and ownership transferred to the former. The transfer of possession and ownership of the land to the government are conditioned upon the receipt by the landowner of the corresponding payment or deposit by the DAR of the compensation with an accessible bank. Until then, title remains with the landowner. 44 There was no receipt by petitioner of any compensation for any of the lands acquired by the government.

The kind of compensation to be paid the landowner is also specific. The law provides that the deposit must be made only in "cash" or "LBP bonds." 45 Respondent DAR's opening of trust account deposits in petitioner' s name with the Land Bank of the Philippines does not constitute payment under the law. Trust account deposits are not cash or LBP bonds. The replacement of the trust account with cash or LBP bonds did not ipso facto cure the lack of compensation; for essentially, the determination of this compensation was marred by lack of due process. In fact, in the entire acquisition proceedings, respondent DAR disregarded the basic requirements of administrative due process. Under these circumstances, the issuance of the CLOA's to farmer beneficiaries necessitated immediate judicial action on the part of the petitioner.

II. The Validity of the Acquisition Proceedings Over the Haciendas.

Petitioner's allegation of lack of due process goes into the validity of the acquisition proceedings themselves. Before we rule on this matter, however, there is need to lay down the procedure in the acquisition of private lands under the provisions of the law.

A. Modes of Acquisition of Land under R. A. 6657

Republic Act No. 6657, the Comprehensive Agrarian Reform Law of 1988 (CARL), provides for two (2) modes of acquisition of private land: compulsory and voluntary. The procedure for the compulsory acquisition of private lands is set forth in Section 16 of R.A. 6657, viz:

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

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

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

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

d) In case of rejection or failure to reply, the DAR shall conduct summary administrative proceedings to determine the compensation for the land requiring the landowner, the LBP and other interested parties to submit evidence as to the just compensation for the land, within fifteen (15) days from receipt of the notice. After the expiration of the above period, the matter is deemed submitted for decision. The DAR shall decide the case within thirty (30) days after it is submitted for decision.

e) Upon receipt by the landowner of the corresponding payment, or, in case of rejection or no response from the landowner, upon the deposit with an accessible bank designated by the DAR of the compensation in cash or in LBP bonds in accordance with this Act, the DAR shall take immediate possession of the land and shall request the proper Register of Deeds to issue a Transfer Certificate of Title (TCT) in the name of the Republic of the Philippines. The DAR shall thereafter proceed with the redistribution of the land to the qualified beneficiaries.

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

In the compulsory acquisition of private lands, the landholding, the landowners and the farmer beneficiaries must first be identified. After identification, the DAR shall send a Notice of Acquisition to the landowner, by personal delivery or registered mail, and post it in a conspicuous place in the municipal building and barangay hall of the place where the property is located. Within thirty days from receipt of the Notice of Acquisition, the landowner, his administrator or representative shall inform the DAR of his acceptance or rejection of the offer. If the landowner accepts, he executes and delivers a deed of transfer in favor of the government and surrenders the certificate of title. Within thirty days from the execution of the deed of transfer, the Land Bank of the Philippines (LBP) pays the owner the purchase price. If the landowner rejects the DAR's offer or fails to make a reply, the DAR conducts summary administrative proceedings to determine just compensation for the land. The landowner, the LBP representative and other interested parties may submit evidence on just compensation within fifteen days from notice. Within thirty days from submission, the DAR shall decide the case and inform the owner of its decision and the amount of just compensation. Upon receipt by the owner of the corresponding payment, or, in case of rejection or lack of response from the latter, the DAR shall deposit the compensation in cash or in LBP bonds with an accessible bank. The DAR shall immediately take possession of the land and cause the issuance of a transfer certificate of title in the name of the Republic of the Philippines. The land shall then be redistributed to the farmer beneficiaries. Any party may question the decision of the DAR in the regular courts for final determination of just compensation.

The DAR has made compulsory acquisition the priority mode of the land acquisition to hasten the implementation of the Comprehensive Agrarian Reform Program (CARP). 46 Under Section 16 of the CARL, the first step in compulsory acquisition is the identification of the land, the landowners and the beneficiaries. However, the law is silent on how the identification process must be made. To fill in this gap, the DAR issued on July 26, 1989 Administrative Order No.12, Series or 1989, which set the operating procedure in the identification of such lands. The procedure is as follows:

II. OPERATING PROCEDURE

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

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

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

a) CARP CA Form 1 — MARO Investigation Report

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

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

d) CARP CA Form 4 — Beneficiaries Undertaking

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

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

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

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

B. The PARO shall:

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

2. Immediately upon receipt of a case folder, compute the valuation of the land in accordance with A.O. No. 6, Series of 1988. 47 The valuation worksheet and the related CACF valuation forms shall be duly certified correct by the PARO and all the personnel who participated in the accomplishment of these forms.

3. In all cases, the PARO may validate the report of the MARO through ocular inspection and verification of the property. This ocular inspection and verification shall be

mandatory when the computed value exceeds = 500,000 per estate.

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

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

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

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

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

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

Administrative Order No. 12, Series of 1989 requires that the Municipal Agrarian Reform Officer (MARO) keep an updated master list of all agricultural lands under the CARP in his area of responsibility containing all the required information. The MARO prepares a

Compulsory Acquisition Case Folder (CACF) for each title covered by CARP. The MARO then sends the landowner a "Notice of Coverage" and a "letter of invitation" to a "conference/meeting" over the land covered by the CACF. He also sends invitations to the prospective farmer-beneficiaries the representatives of the Barangay Agrarian Reform Committee (BARC), the Land Bank of the Philippines (LBP) and other interested parties to discuss the inputs to the valuation of the property and solicit views, suggestions, objections or agreements of the parties. At the meeting, the landowner is asked to indicate his retention area.

The MARO shall make a report of the case to the Provincial Agrarian Reform Officer (PARO) who shall complete the valuation of the land. Ocular inspection and verification of the property by the PARO shall be mandatory when the computed value of the estate exceeds P500,000.00. Upon determination of the valuation, the PARO shall forward all papers together with his recommendation to the Central Office of the DAR. The DAR Central Office, specifically, the Bureau of Land Acquisition and Distribution (BLAD), shall review, evaluate and determine the final land valuation of the property. The BLAD shall prepare, on the signature of the Secretary or his duly authorized representative, a Notice of Acquisition for the subject property. 48 From this point, the provisions of Section 16 of R.A. 6657 then apply. 49

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

The importance of the first notice, i.e., the Notice of Coverage and the letter of invitation to the conference, and its actual conduct cannot be understated. They are steps designed to comply with the requirements of administrative due process. The implementation of the CARL is an exercise of the State's police power and the power of eminent domain. To the extent that the CARL prescribes retention limits to the landowners, there is an exercise of police power for the regulation of private property in accordance with the Constitution. 50 But where, to carry out such regulation, the owners are deprived of lands they own in excess of the maximum area allowed, there is also a taking under the power of eminent domain. The taking contemplated is not a mere limitation of the use of the land. What is required is the surrender of the title to and physical possession of the said excess and all beneficial rights accruing to the owner in favor of the farmer beneficiary. 51 The Bill of Rights provides that "[n]o person shall be deprived of life, liberty or property without due process of law." 52 The CARL was not intended to take away property without due process of law. 53 The exercise of the power of eminent domain requires that due process be observed in the taking of private property.

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

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

B. MARO

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

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

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

4. MARO/LAND BANK FIELD OFFICE/BARC

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

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

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

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

5. MARO

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

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

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

Result of Field Investigation

Inputs to valuation

Issues raised

Comments/recommendations by all parties concerned.

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

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

xxx xxx xxx

DAR A.O. No. 9, Series of 1990 lays down the rules on both Voluntary Offer to Sell (VOS) and Compulsory Acquisition (CA) transactions involving lands enumerated under Section 7 of the CARL. 54 In both VOS and CA. transactions, the MARO prepares the Voluntary Offer to Sell Case Folder (VOCF) and the Compulsory Acquisition Case Folder (CACF), as the case may be, over a particular landholding. The MARO notifies the landowner as well as representatives of the LBP, BARC and prospective beneficiaries of the date of the ocular inspection of the property at least one week before the scheduled date and invites them to attend the same. The MARO, LBP or BARC conducts the ocular inspection and investigation by identifying the land and landowner, determining the suitability of the land for agriculture and productivity, interviewing and screening prospective farmer beneficiaries. Based on its investigation, the MARO, LBP or BARC prepares the Field Investigation Report which shall be signed by all parties concerned. In addition to the field investigation, a boundary or subdivision survey of the land may also be conducted by a Survey Party of the Department of Environment and Natural Resources (DENR) to be assisted by the MARO. 55 This survey shall delineate the areas covered by Operation Land Transfer (OLT), areas retained by the landowner, areas with infrastructure, and the areas subject to VOS and CA. After the survey and field investigation, the MARO sends a "Notice of Coverage" to the landowner or his duly authorized representative inviting him to a conference or public hearing with the farmer beneficiaries, representatives of the BARC, LBP, DENR, Department of Agriculture (DA), non-government organizations, farmer's organizations and other interested parties. At the public hearing, the parties shall discuss the results of the field investigation, issues that may be raised in relation thereto, inputs to the valuation of the subject landholding, and other comments and recommendations by all parties concerned. The Minutes of the conference/public hearing shall form part of the VOCF or CACF which files shall be forwarded by the MARO to the PARO. The PARO reviews, evaluates and validates the Field Investigation Report and other documents in the VOCF/CACF. He then forwards the records to the RARO for another review.

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

IV. OPERATING PROCEDURES:

Steps Responsible Activity Forms/

Agency/Unit Document

(requirements)

A. Identification and

Documentation

xxx xxx xxx

5 DARMO Issue Notice of Coverage CARP

to LO by personal delivery Form No. 2

with proof of service, or

registered mail with return

card, informing him that his

property is now under CARP

coverage and for LO to select

his retention area, if he desires

to avail of his right of retention;

and at the same time invites him

to join the field investigation to

be conducted on his property

which should be scheduled at

least two weeks in advance of

said notice.

A copy of said Notice shall CARP

be posted for at least one Form No. 17

week on the bulletin board of

the municipal and barangay

halls where the property is

located. LGU office concerned

notifies DAR about compliance

with posting requirements thru

return indorsement on CARP

Form No. 17.

6 DARMO Send notice to the LBP, CARP

BARC, DENR representatives Form No. 3

and prospective ARBs of the schedule of the field investigation

to be conducted on the subject

property.

7 DARMO With the participation of CARP

BARC the LO, representatives of Form No. 4

LBP the LBP, BARC, DENR Land Use

DENR and prospective ARBs, Map

Local Office conducts the investigation on

subject property to identify

the landholding, determines

its suitability and productivity;

and jointly prepares the Field

Investigation Report (FIR)

and Land Use Map. However,

the field investigation shall

proceed even if the LO, the

representatives of the DENR and

prospective ARBs are not available

provided, they were given due

notice of the time and date of

investigation to be conducted.

Similarly, if the LBP representative

is not available or could not come

on the scheduled date, the field

investigation shall also be conducted,

after which the duly accomplished

Part I of CARP Form No. 4 shall

be forwarded to the LBP

representative for validation. If he agrees

to the ocular inspection report of DAR,

he signs the FIR (Part I) and

accomplishes Part II thereof.

In the event that there is a

difference or variance between

the findings of the DAR and the

LBP as to the propriety of

covering the land under CARP,

whether in whole or in part, on

the issue of suitability to agriculture,

degree of development or slope,

and on issues affecting idle lands,

the conflict shall be resolved by

a composite team of DAR, LBP,

DENR and DA which shall jointly

conduct further investigation

thereon. The team shall submit its

report of findings which shall be

binding to both DAR and LBP,

pursuant to Joint Memorandum

Circular of the DAR, LBP, DENR

and DA dated 27 January 1992.

8 DARMO Screen prospective ARBs

BARC and causes the signing of CARP

the Application of Purchase Form No. 5

and Farmer's Undertaking

(APFU).

9 DARMO Furnishes a copy of the CARP

duly accomplished FIR to Form No. 4

the landowner by personal

delivery with proof of

service or registered mail

will return card and posts

a copy thereof for at least

one week on the bulletin

board of the municipal

and barangay halls where

the property is located.

LGU office concerned CARP

notifies DAR about Form No. 17

compliance with posting

requirement thru return

endorsement on CARP

Form No. 17.

B. Land Survey

10 DARMO Conducts perimeter or Perimeter

And/or segregation survey or

DENR delineating areas covered Segregation

Local Office by OLT, "uncarpable Survey Plan

areas such as 18% slope

and above, unproductive/

unsuitable to agriculture,

retention, infrastructure.

In case of segregation or

subdivision survey, the

plan shall be approved

by DENR-LMS.

C. Review and Completion

of Documents

11. DARMO Forward VOCF/CACF CARP

to DARPO. Form No. 6

xxx xxx xxx.

DAR A.O. No. 1, Series of 1993, modified the identification process and increased the number of government agencies involved in the identification and delineation of the land subject to acquisition. 56 This time, the Notice of Coverage is sent to the landowner before the conduct of the field investigation and the sending must comply with specific requirements. Representatives of the DAR Municipal Office (DARMO) must send the Notice of Coverage to the landowner by "personal delivery with proof of service, or by registered mail with return card," informing him that his property is under CARP coverage and that if he desires to avail of his right of retention, he may choose which area he shall retain. The Notice of Coverage shall also invite the landowner to attend the field investigation to be scheduled at least two weeks from notice. The field investigation is for the purpose of identifying the landholding and determining its suitability for agriculture and its productivity. A copy of the Notice of Coverage shall be posted for at least one week on the bulletin board of the municipal and barangay halls where the property is located. The date of the field investigation shall also be sent by the DAR Municipal Office to representatives of the LBP, BARC, DENR and prospective farmer beneficiaries. The field investigation shall be conducted on the date set with the participation of the landowner and the various representatives. If the landowner and other representatives are absent, the field investigation shall proceed, provided they were duly notified thereof. Should there be a variance between the findings of the DAR and the LBP as to whether the land be placed under agrarian reform, the land's suitability to agriculture, the degree or development of the slope, etc., the conflict shall be resolved by a composite team of the DAR, LBP, DENR and DA which shall jointly conduct further investigation. The team's findings shall be binding on both DAR and LBP. After the field investigation, the DAR Municipal Office shall prepare the Field Investigation Report and Land Use Map, a copy of which shall be furnished the landowner "by personal delivery with proof of service or registered mail with return card." Another copy of the Report and Map shall likewise be posted for at least one week in the municipal or barangay halls where the property is located.

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

B. The Compulsory Acquisition of Haciendas Palico and Banilad

In the case at bar, respondent DAR claims that it, through MARO Leopoldo C. Lejano, sent a letter of invitation entitled "Invitation to Parties" dated September 29, 1989 to petitioner corporation, through Jaime Pimentel, the administrator of Hacienda Palico. 57 The invitation was received on the same day it was sent as indicated by a signature and the date received at the bottom left corner of said invitation. With regard to Hacienda Banilad, respondent DAR claims that Jaime Pimentel, administrator also of Hacienda Banilad, was notified and sent an invitation to the conference. Pimentel actually attended the conference on September 21, 1989 and signed the Minutes of the meeting on behalf of petitioner corporation. 58 The Minutes was also signed by the representatives of the BARC, the LBP and farmer beneficiaries. 59 No letter of invitation was sent or conference meeting held with respect to Hacienda Caylaway because it was subject to a Voluntary Offer to Sell to respondent DAR. 60

When respondent DAR, through the Municipal Agrarian Reform Officer (MARO), sent to the various parties the Notice of Coverage and invitation to the conference, DAR A.O. No. 12, Series of 1989 was already in effect more than a month earlier. The Operating Procedure in DAR Administrative Order No. 12 does not specify how notices or letters of invitation shall be sent to the landowner, the representatives of the BARC, the LBP, the farmer beneficiaries and other interested parties. The procedure in the sending of these notices is important to comply with the requisites of due process especially when the owner, as in this case, is a juridical entity. Petitioner is a domesticcorporation, 61 and therefore, has a personality separate and distinct from its shareholders, officers and employees.

The Notice of Acquisition in Section 16 of the CARL is required to be sent to the landowner by "personal delivery or registered mail." Whether the landowner be a natural or juridical person to whose address the Notice may be sent by personal delivery or registered mail, the law does not distinguish. The DAR Administrative Orders also do not distinguish. 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 DAR Adjudication Board (DARAB). Service of pleadings before the DARAB is governed by Section 6, Rule V of the DARAB Revised Rules of Procedure. Notices and pleadings are served on private domestic corporations or partnerships in the following manner:

Sec. 6. Service upon Private Domestic Corporation or Partnership. — If the defendant is a corporation organized under the laws of the Philippines or a partnership duly registered, service may be made on the president, manager, secretary, cashier, agent, or any of its directors or partners.

Similarly, the Revised Rules of Court of the Philippines, in Section 13, Rule 14 provides:

Sec. 13. Service upon private domestic corporation or partnership. — If the defendant is a corporation organized under the laws of the Philippines or a partnership duly registered, service may be made on the president, manager, secretary, cashier, agent, or any of its directors.

Summonses, pleadings and notices in cases against a private domestic corporation before the DARAB and the regular courts are served on the president, manager, secretary, cashier, agent or any of its directors. These persons are those through whom the private domestic corporation or partnership is capable of action. 62

Jaime Pimentel is not the president, manager, secretary, cashier or director of petitioner corporation. Is he, as administrator of the two Haciendas, considered an agent of the corporation?

The purpose of all rules for service of process on a corporation is to make it reasonably certain that the corporation will receive prompt and proper notice in an action against it. 63 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, 64 and bring home to the corporation notice of the filing of the action. 65Petitioner's evidence does not show the official duties of Jaime Pimentel as administrator of petitioner's haciendas. The evidence does not indicate whether Pimentel'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. At the time the notices were sent and the preliminary conference conducted, petitioner's principal place of business was listed in respondent DAR's records as "Soriano Bldg., Plaza Cervantes, Manila," 66 and "7th Flr. Cacho-Gonzales Bldg., 101 Aguirre St., Makati, Metro Manila."67 Pimentel did not hold office at the principal place of business of petitioner. Neither did he exercise his functions in Plaza Cervantes, Manila nor in Cacho-Gonzales Bldg., Makati, Metro Manila. He performed his official functions and actually resided in the haciendas in Nasugbu, Batangas, a place over two hundred kilometers away from Metro Manila.

Curiously, respondent DAR had information of the address of petitioner's principal place of business. The Notices of Acquisition over Haciendas Palico and Banilad were addressed to petitioner at its offices in Manila and Makati. These Notices were sent barely three to four months after Pimentel was notified of the preliminary conference. 68Why respondent DAR chose to notify Pimentel instead of the officers of the corporation was not explained by the said respondent.

Nevertheless, assuming that Pimentel was an agent of petitioner corporation, and the notices and letters of invitation were validly served on petitioner through him, there is no showing that Pimentel himself was duly authorized to attend the conference meeting with the MARO, BARC and LBP representatives and farmer beneficiaries for purposes of compulsory acquisition of petitioner's landholdings. Even respondent DAR's evidence does not indicate this authority. On the contrary, petitioner claims that it had no knowledge of the letter-invitation, hence, could not have given Pimentel the authority to bind it to whatever matters were discussed or agreed upon by the parties at the preliminary conference or public hearing. Notably, one year after Pimentel was informed of the preliminary conference, DAR A.O. No. 9, Series of 1990 was issued and this required that the Notice of Coverage must be sent "to the landowner concerned or his duly authorized representative." 69

Assuming further that petitioner was duly notified of the CARP coverage of its haciendas, the areas found actually subject to CARP were not properly identified before they were taken over by respondent DAR. Respondents insist that the lands were identified because they are all registered property and the technical description in their respective titles specifies their metes and bounds. Respondents admit at the same time, however, that not all areas in the haciendas were placed under the comprehensive agrarian reform program invariably by reason of elevation or character or use of the land. 70

The acquisition of the landholdings did not cover the entire expanse of the two haciendas, but only portions thereof. Hacienda Palico has an area of 1,024 hectares and only 688.7576 hectares were targetted for acquisition. Hacienda Banilad has an area of 1,050 hectares but only 964.0688 hectares were subject to CARP. The haciendas are not entirely agricultural lands. In fact, the various tax declarations over the haciendas

describe the landholdings as "sugarland," and "forest, sugarland, pasture land, horticulture and woodland." 71

Under Section 16 of the CARL, the sending of the Notice of Acquisition specifically requires that the land subject to land reform be first identified. The two haciendas in the instant case cover vast tracts of land. Before Notices of Acquisition were sent to petitioner, however, the exact areas of the landholdings were not properly segregated and delineated. Upon receipt of this notice, therefore, petitioner corporation had no idea which portions of its estate were subject to compulsory acquisition, which portions it could rightfully retain, whether these retained portions were compact or contiguous, and which portions were excluded from CARP coverage. Even respondent DAR's evidence does not show that petitioner, through its duly authorized representative, was notified of any ocular inspection and investigation that was to be conducted by respondent DAR. Neither is there proof that petitioner was given the opportunity to at least choose and identify its retention area in those portions to be acquired compulsorily. The right of retention and how this right is exercised, is guaranteed in Section 6 of the CARL, viz:

Sec. 6. Retention Limits. — . . . .

The right to choose the area to be retained, which shall be compact or contiguous, shall pertain to the landowner; Provided, however, That in case the area selected for retention by the landowner is tenanted, the tenant shall have the option to choose whether to remain therein or be a beneficiary in the same or another agricultural land with similar or comparable features. In case the tenant chooses to remain in the retained area, he shall be considered a leaseholder and shall lose his right to be a beneficiary under this Act. In case the tenant chooses to be a beneficiary in another agricultural land, he loses his right as a leaseholder to the land retained by the landowner. The tenant must exercise this option within a period of one (1) year from the time the landowner manifests his choice of the area for retention.

Under the law, a landowner may retain not more than five hectares out of the total area of his agricultural land subject to CARP. The right to choose the area to be retained, which shall be compact or contiguous, pertains to the landowner. If the area chosen for retention is tenanted, the tenant shall have the option to choose whether to remain on the portion or be a beneficiary in the same or another agricultural land with similar or comparable features.

C. The Voluntary Acquisition of Hacienda Caylaway

Petitioner was also left in the dark with respect to Hacienda Caylaway, which was the subject of a Voluntary Offer to Sell (VOS). The VOS in the instant case was made on May 6, 1988, 72 before the effectivity of R.A. 6657 on June 15, 1988. VOS transactions were first governed by DAR Administrative Order No. 19, series of 1989, 73 and under this order, all VOS filed before June 15, 1988 shall be heard and processed in accordance with the procedure provided for in Executive Order No. 229, thus:

III. All VOS transactions which are now pending before the DAR and for which no payment has been made shall be subject to the notice and hearing requirements provided in Administrative Order No. 12, Series of 1989, dated 26 July 1989, Section II, Subsection A, paragraph 3.

All VOS filed before 15 June 1988, the date of effectivity of the CARL, shall be heard and processed in accordance with the procedure provided for in Executive Order No. 229.

xxx xxx xxx.

Sec. 9 of E.O. 229 provides:

Sec. 9. Voluntary Offer to Sell. — The government shall purchase all agricultural lands it deems productive and suitable to farmer cultivation voluntarily offered for sale to it at a valuation determined in accordance with Section 6. Such transaction shall be exempt from the payment of capital gains tax and other taxes and fees.

Executive Order 229 does not contain the procedure for the identification of private land as set forth in DAR A.O. No. 12, Series of 1989. Section 5 of E.O. 229 merely reiterates the procedure of acquisition in Section 16, R.A. 6657. In other words, the E.O. is silent as to the procedure for the identification of the land, the notice of coverage and the preliminary conference with the landowner, representatives of the BARC, the LBP and farmer beneficiaries. Does this mean that these requirements may be dispensed with regard to VOS filed before June 15, 1988? The answer is no.

First of all, the same E.O. 229, like Section 16 of the CARL, requires that the land, landowner and beneficiaries of the land subject to agrarian reform be identified before the notice of acquisition should be issued. 74 Hacienda Caylaway was voluntarily offered for sale in 1989. The Hacienda has a total area of 867.4571 hectares and is covered by four (4) titles. In two separate Resolutions both dated January 12, 1989, respondent DAR, through the Regional Director, formally accepted the VOS over the two of these fourtitles. 75 The land covered by two titles has an area of 855.5257 hectares, but only 648.8544 hectares thereof fell within the coverage of R.A. 6657. 76 Petitioner claims it does not know where these portions are located.

Respondent DAR, on the other hand, avers that surveys on the land covered by the four titles were conducted in 1989, and that petitioner, as landowner, was not denied participation therein, The results of the survey and the land valuation summary report, however, do not indicate whether notices to attend the same were actually sent to and received by petitioner or its duly authorized representative. 77 To reiterate, Executive Order No. 229 does not lay down the operating procedure, much less the notice requirements, before the VOS is accepted by respondent DAR. Notice to the landowner, however, cannot be dispensed with. It is part of administrative due process and is an essential requisite to enable the landowner himself to exercise, at the very least, his right of retention guaranteed under the CARL.

III. The Conversion of the three Haciendas.

It is petitioner's claim that the three haciendas are not subject to agrarian reform because they have been declared for tourism, not agriculturalpurposes. 78 In 1975, then President Marcos issued Proclamation No. 1520 declaring the municipality of Nasugbu, Batangas a tourist zone. Lands in Nasugbu, including the subject haciendas, were allegedly reclassified as non-agricultural 13 years before the effectivity of R. A. No. 6657. 79 In 1993, the Regional Director for Region IV of the Department of Agriculture certified that the haciendas are not feasible and sound for agricultural development. 80 On March 20, 1992, pursuant to Proclamation No. 1520, the Sangguniang Bayan of Nasugbu, Batangas adopted Resolution No. 19 reclassifying certain areas of Nasugbu as non-agricultural. 81 This Resolution approved Municipal Ordinance No. 19, Series of 1992, the Revised Zoning Ordinance of Nasugbu 82 which zoning

ordinance was based on a Land Use Plan for Planning Areas for New Development allegedly prepared by the University of the Philippines. 83 Resolution No. 19 of the Sangguniang Bayan was approved by the Sangguniang Panlalawigan of Batangas on March 8, 1993. 84

Petitioner claims that proclamation No. 1520 was also upheld by respondent DAR in 1991 when it approved conversion of 1,827 hectares in Nasugbu into a tourist area known as the Batulao Resort Complex, and 13.52 hectares in Barangay Caylaway as within the potential tourist belt. 85 Petitioner present evidence before us that these areas are adjacent to the haciendas subject of this petition, hence, the haciendas should likewise be converted. Petitioner urges this Court to take cognizance of the conversion proceedings and rule accordingly. 6

We do not agree. 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. The agency charged with the mandate of approving or disapproving applications for conversion is the DAR.

At the time petitioner filed its application for conversion, the Rules of Procedure governing the processing and approval of applications for land use conversion was the DAR A.O. No. 2, Series of 1990. Under this A.O., the application for conversion is filed with the MARO where the property is located. The MARO reviews the application and its supporting documents and conducts field investigation and ocular inspection of the property. The findings of the MARO are subject to review and evaluation by the Provincial Agrarian Reform Officer (PARO). The PARO may conduct further field investigation and submit a supplemental report together with his recommendation to the Regional Agrarian Reform Officer (RARO) who shall review the same. For lands less than five hectares, the RARO shall approve or disapprove applications for conversion. For lands exceeding five hectares, the RARO shall evaluate the PARO Report and forward the records and his report to the Undersecretary for Legal Affairs. Applications over areas exceeding fifty hectares are approved or disapproved by the Secretary of Agrarian Reform.

The DAR's mandate over applications for conversion was first laid down in Section 4 (j) and Section 5 (l) of Executive Order No. 129-A, Series of 1987 and reiterated in the CARL and Memorandum Circular No. 54, Series of 1993 of the Office of the President. The DAR's jurisdiction over applications for conversion is provided as follows:

A. The Department of Agrarian Reform (DAR) is mandated to "approve or disapprove applications for conversion, restructuring or readjustment of agricultural lands into non-agricultural uses," pursuant to Section 4 (j) of Executive Order No. 129-A, Series of 1987.

B. Sec. 5 (l) of E.O. 129-A, Series of 1987, vests in the DAR, exclusive authority to approve or disapprove applications for conversion of agricultural lands for residential, commercial, industrial and other land uses.

C. Sec. 65 of R.A. No. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988, likewise empowers the DAR to authorize under certain conditions, the conversion of agricultural lands.

D. Sec. 4 of Memorandum Circular No. 54, Series of 1993 of the Office of the President, provides that "action on applications for land use conversion on individual landholdings shall remain as the responsibility of the DAR, which shall utilize as its primary reference, documents on the comprehensive land use plans and accompanying ordinances passed upon and approved by the local government units concerned, together with the National Land Use Policy, pursuant to R.A. No. 6657 and E.O. No. 129-A. 87

Applications for conversion were initially governed by DAR A.O. No. 1, Series of 1990 entitled "Revised Rules and Regulations Governing Conversion of Private Agricultural Lands and Non-Agricultural Uses," and DAR A.O. No. 2, Series of 1990 entitled "Rules of Procedure Governing the Processing and Approval of Applications for Land Use Conversion." These A.O.'s and other implementing guidelines, including Presidential issuances and national policies related to land use conversion have been consolidated in DAR A.O. No. 07, Series of 1997. Under this recent issuance, the guiding principle in land use conversion is:

to preserve prime agricultural lands for food production while, at the same time, recognizing the need of the other sectors of society (housing, industry and commerce) for land, when coinciding with the objectives of the Comprehensive Agrarian Reform Law to promote social justice, industrialization and the optimum use of land as a national resource for public welfare. 88

"Land Use" refers to the manner of utilization of land, including its allocation, development and management. "Land Use Conversion" refers to the act or process of changing the current use of a piece of agricultural land into some other use as approved by the DAR. 89 The conversion of agricultural land to uses other than agricultural requires field investigation and conferences with the occupants of the land. They involve factual findings and highly technical matters within the special training and expertise of the DAR. DAR A.O. No. 7, Series of 1997 lays down with specificity how the DAR must go about its task. This time, the field investigation is not conducted by the MARO but by a special task force, known as the Center for Land Use Policy Planning and Implementation (CLUPPI-DAR Central Office). The procedure is that once an application for conversion is filed, the CLUPPI prepares the Notice of Posting. The MARO only posts the notice and thereafter issues a certificate to the fact of posting. The CLUPPI conducts the field investigation and dialogues with the applicants and the farmer beneficiaries to ascertain the information necessary for the processing of the application. The Chairman of the CLUPPI deliberates on the merits of the investigation report and recommends the appropriate action. This recommendation is transmitted to the Regional Director, thru the Undersecretary, or Secretary of Agrarian Reform. Applications involving more than fifty hectares are approved or disapproved by the Secretary. The procedure does not end with the Secretary, however. The Order provides that the decision of the Secretary may be appealed to the Office of the President or the Court of Appeals, as the case may be, viz:

Appeal from the decision of the Undersecretary shall be made to the Secretary, and from the Secretary to the Office of the President or the Court of Appeals as the case may be. The mode of appeal/motion for reconsideration, and the appeal fee, from Undersecretary to the Office of the Secretary shall be the same as that of the Regional Director to the Office of the Secretary. 90

Indeed, the doctrine of primary jurisdiction does not warrant a court to arrogate unto itself authority to resolve a controversy the jurisdiction over which is initially lodged with an administrative body of special competence. 91Respondent DAR is in a better position to resolve petitioner's application for conversion, being primarily the agency possessing the necessary expertise on the matter. The power to determine whether Haciendas Palico, Banilad and Caylaway are non-agricultural, hence, exempt from the coverage of the CARL lies with the DAR, not with this Court.

Finally, we stress that the failure of respondent DAR to comply with the requisites of due process in the acquisition proceedings does not give this Court the power to nullify the CLOA's already issued to the farmer beneficiaries. To assume the power is to short-circuit the administrative process, which has yet to run its regular course. Respondent DAR must be given the chance to correct its procedural lapses in the acquisition proceedings. In Hacienda Palico alone, CLOA's were issued to 177 farmer beneficiaries in 1993. 92 Since then until the present, these farmers have been cultivating their lands. 93 It goes against the basic precepts of justice, fairness and equity to deprive these people, through no fault of their own, of the land they till. Anyhow, the farmer beneficiaries hold the property in trust for the rightful owner of the land.

IN VIEW WHEREOF, the petition is granted in part and the acquisition proceedings over the three haciendas are nullified for respondent DAR's failure to observe due process therein. In accordance with the guidelines set forth in this decision and the applicable administrative procedure, the case is hereby remanded to respondent DAR for proper acquisition proceedings and determination of petitioner's application for conversion.

SO ORDERED.

Davide, Jr., C.J., Bellosillo, Vitug, Mendoza, Panganiban, Purisima, Buena, Gonzaga-Reyes and De Leon, Jr., JJ., concur.

Melo, J., please see concurring and dissenting opinion.

Ynares-Santiago, J., concurring and dissenting opinion.

Kapunan, J., I join in the concurring and dissenting opinion of Justice C. Y. Santiago.

Quisumbing, J., I join the in the concurring and dissenting opinion of J. Santiago.

Pardo, J., I join the concurring and dissenting opinion of J. Santiago.

Separate Opinions

MELO, J., concurring and dissenting opinion;

I concur in the ponencia of Justice Ynares-Santiago, broad and exhaustive as it is in its treatment of the issues. However, I would like to call attention to two or three points which I believe are deserving of special emphasis.

The apparent incongruity or shortcoming in the petition is DAR's disregard of a law which settled the non-agricultural nature of the property as early as 1975. Related to this are the inexplicable contradictions between DAR's own official issuances and its challenged actuations in this particular case.

Presidential Proclamation No. 1520 has the force and effect of law unless repealed. This law declared Nasugbu, Batangas as a tourist zone.

Considering the new and pioneering stage of the tourist industry in 1975, it can safely be assumed that Proclamation 1520 was the result of empirical study and careful determination, not political or extraneous pressures. It cannot be disregarded by DAR or any other department of Government.

In Province of Camarines Sur, et al. vs. Court of Appeals, et al. (222 SCRA 173, 182 [1993]), we ruled that local governments need not obtain the approval of DAR to reclassify lands from agricultural to non-agricultural use. In the present case, more than the exercise of that power, the local governments were merely putting into effect a law when they enacted the zoning ordinances in question.

Any doubts as to the factual correctness of the zoning reclassifications are answered by the February 2, 1993 certification of the Department of Agriculture that the subject landed estates are not feasible and economically viable for agriculture, based on the examination of their slope, terrain, depth, irrigability, fertility, acidity, and erosion considerations.

I agree with the ponencia's rejection of respondent's argument that agriculture is not incompatible and may be enforced in an area declared by law as a tourist zone. Agriculture may contribute to the scenic views and variety of countryside profiles but the issue in this case is not the beauty of ricefields, cornfields, or coconut groves. May land found to be non-agricultural and declared as a tourist zone by law, be withheld from the owner's efforts to develop it as such? There are also plots of land within Clark Field and other commercial-industrial zones capable of cultivation but this does not subject them to compulsory land reform. It is the best use of the land for tourist purposes, free trade zones, export processing or the function to which it is dedicated that is the determining factor. Any cultivation is temporary and voluntary.

The other point I wish to emphasize is DAR's failure to follow its own administrative orders and regulations in this case.

The contradictions between DAR administrative orders and its actions in the present case may be summarized:

1. DAR Administrative Order No. 6, Series of 1994, subscribes to Department of Justice Opinion No. 44, Series of 1990 that lands classified as non-agricultural prior to June 15, 1988 when the CARP Law was passed are exempt from its coverage. By what right can DAR now ignore its own Guidelines in this case of land declared as forming a tourism zone since 1975?

2. DAR Order dated January 22, 1991 granted the conversion of the adjacent and contiguous property of Group Developers and Financiers, Inc. (GDFI) into the Batulao Tourist Resort. Why should DAR have a contradictory stance in the adjoining property of Roxas and Co., Inc. found to be similar in nature and declared as such?

3. DAR Exemption Order, Case No. H-9999-050-97 dated May 17, 1999 only recently exempted 13.5 hectares of petitioner's property also found in Caylaway together, and similarly situated, with the bigger parcel (Hacienda Caylaway) subject of this petition

from CARL coverage. To that extent, it admits that its earlier blanket objections are unfounded.

4. DAR Administrative Order No. 3, Series of 1996 identifies the land outside of CARP coverage as:

(a) Land found by DAR as no longer suitable for agriculture and which cannot be given appropriate valuation by the Land Bank;

(b) Land where DAR has already issued a conversion order;

(c) Land determined as exempt under DOJ Opinions Nos. 44 and 181; or

(d) Land declared for non-agricultural use by Presidential Proclamation.

It is readily apparent that the land in this case falls under all the above categories except the second one. DAR is acting contrary to its own rules and regulations.

I should add that DAR has affirmed in a Rejoinder (August 20, 1999) the issuance and effectivity of the above administrative orders.

DAR Administrative Order No. 3, Series of 1996, Paragraph 2 of Part II, Part III and Part IV outlines the procedure for reconveyance of land where CLOAs have been improperly issued. The procedure is administrative, detailed, simple, and speedy. Reconveyance is implemented by DAR which treats the procedure as "enshrined . . . in Section 50 of Republic Act No. 6657" (Respondent's Rejoinder). Administrative Order No. 3, Series of 1996 shows there are no impediments to administrative or judicial cancellations of CLOA's improperly issued over exempt property. Petitioner further submits, and this respondent does not refute, that 25 CLOAs covering 3,338 hectares of land owned by the Manila Southcoast Development Corporation also found in Nasugbu, Batangas, have been cancelled on similar grounds as those in the case at bar.

The CLOAs in the instant case were issued over land declared as non-agricultural by a presidential proclamation and confirmed as such by actions of the Department of Agriculture and the local government units concerned. The CLOAs were issued over adjoining lands similarly situated and of like nature as those declared by DAR as exempt from CARP coverage. The CLOAs were surprisingly issued over property which were the subject of pending cases still undecided by DAR. There should be no question over the CLOAs having been improperly issued, for which reason, their cancellation is warranted.

 

YNARES-SANTIAGO, J., concurring and dissenting opinion;

I concur in the basic premises of the majority opinion. However, I dissent in its final conclusions and the dispositive portion.

With all due respect, the majority opinion centers on procedure but unfortunately ignores the substantive merits which this procedure should unavoidably sustain.

The assailed decision of the Court of Appeals had only one basic reason for its denial of the petition, i.e., the application of the doctrine of non-exhaustion of administrative remedies. This Court's majority ponencia correctly reverses the Court of Appeals on this issue. The ponencia now states that the issuance of CLOA's to farmer beneficiaries deprived petitioner Roxas & Co. of its property without just compensation. It rules that the acts of the Department of Agrarian Reform are patently illegal. It concludes that petitioner's rights were violated, and thus to require it to exhaust administrative remedies before DAR was not a plain, speedy, and adequate remedy. Correctly, petitioner sought immediate redress from the Court of Appeals to this Court.

However, I respectfully dissent from the judgment which remands the case to the DAR. If the acts of DAR are patently illegal and the rights of Roxas & Co. violated, the wrong decisions of DAR should be reversed and set aside. It follows that the fruits of the wrongful acts, in this case the illegally issued CLOAs, must be declared null and void.

Petitioner Roxas & Co. Inc. is the registered owner of three (3) haciendas located in Nasugbu, Batangas, namely: Hacienda Palico comprising of an area of 1,024 hectares more or less, covered by Transfer Certificate of Title No. 985 (Petition, Annex "G"; Rollo, p. 203); Hacienda Banilad comprising an area of 1,050 hectares and covered by TCT No. 924 (Petition, Annex "I"; Rollo, p. 205); and Hacienda Caylaway comprising an area of 867.4571 hectares and covered by TCT Nos. T-44655 (Petition, Annex "O"; Rollo, p. 216), T-44662 (Petition, Annex "P";Rollo, p. 217), T-44663 (Petition, Annex "Q"; Rollo, p. 210) and T-44664 (Petition, Annex "R"; Rollo, p. 221).

Sometime in 1992 and 1993, petitioner filed applications for conversion with DAR. Instead of either denying or approving the applications, DAR ignored and sat on them for seven (7) years. In the meantime and in acts of deceptive lip-service, DAR excluded some small and scattered lots in Palico and Caylaway from CARP coverage. The majority of the properties were parceled out to alleged farmer-beneficiaries, one at a time, even as petitioner's applications were pending and unacted upon.

The majority ponencia cites Section 16 of Republic Act No. 6657 on the procedure for acquisition of private lands.

The ponencia cites the detailed procedures found in DAR Administrative Order No. 12, Series of 1989 for the identification of the land to be acquired. DAR did not follow its own prescribed procedures. There was no valid issuance of a Notice of Coverage and a Notice of Acquisition.

The procedure on the evaluation and determination of land valuation, the duties of the Municipal Agrarian Reform Officer (MARO), the Barangay Agrarian Reform Committee (BARC), Provincial Agrarian Reform Officer (PARO) and the Bureau of Land Acquisition and Distribution (BLAD), the documentation and reports on the step-by-step process, the screening of prospective Agrarian Reform Beneficiaries (ARBs), the land survey and segregation survey plan, and other mandatory procedures were not followed. The landowner was not properly informed of anything going on.

Equally important, there was no payment of just compensation. I agree with the ponencia that due process was not observed in the taking of petitioner's properties.

Since the DAR did not validly acquire ownership over the lands, there was no acquired property to validly convey to any beneficiary. The CLOAs were null and void from the start.

Petitioner states that the notices of acquisition were sent by respondents by ordinary mail only, thereby disregarding the procedural requirement that notices be served personally or by registered mail. This is not disputed by respondents, but they allege that petitioner changed its address without notifying the DAR. Notably, the procedure prescribed speaks of only two modes of service of notices of acquisition — personal service and service by registered mail. The non-inclusion of other modes of service can only mean that the legislature intentionally omitted them. In other words, service of a notice of acquisition other than personally or by registered mail is not valid. Casus omissus pro omisso habendus est. The reason is obvious. Personal service and service by registered mail are methods that ensure the receipt by the addressee, whereas service by ordinary mail affords no reliable proof of receipt.

Since it governs the extraordinary method of expropriating private property, the CARL should be strictly construed. Consequently, faithful compliance with its provisions, especially those which relate to the procedure for acquisition of expropriated lands, should be observed. Therefore, the service by respondent DAR of the notices of acquisition to petitioner by ordinary mail, not being in conformity with the mandate of R.A. 6657, is invalid and ineffective.

With more reason, the compulsory acquisition of portions of Hacienda Palico, for which no notices of acquisition were issued by the DAR, should be declared invalid.

The entire ponencia, save for the last six (6) pages, deals with the mandatory procedures promulgated by law and DAR and how they have not been complied with. There can be no debate over the procedures and their violation. However, I respectfully dissent in the conclusions reached in the last six pages. Inspite of all the violations, the deprivation of petitioner's rights, the non-payment of just compensation, and the consequent nullity of the CLOAs, the Court is remanding the case to the DAR for it to act on the petitioner's pending applications for conversion which have been unacted upon for seven (7) years.

Petitioner had applications for conversion pending with DAR. Instead of deciding them one way or the other, DAR sat on the applications for seven (7) years. At that same time it rendered the applications inutile by distributing CLOAs to alleged tenants. This action is even worse than a denial of the applications because DAR had effectively denied the application against the applicant without rendering a formal decision. This kind of action preempted any other kind of decision except denial. Formal denial was even unnecessary. In the case of Hacienda Palico, the application was in fact denied on November 8, 1993.

There are indisputable and established factors which call for a more definite and clearer judgment.

The basic issue in this case is whether or not the disputed property is agricultural in nature and covered by CARP. That petitioner's lands are non-agricultural in character is clearly shown by the evidence presented by petitioner, all of which were not disputed by respondents. The disputed property is definitely not subject to CARP.

The nature of the land as non-agricultural has been resolved by the agencies with primary jurisdiction and competence to decide the issue, namely — (1) a Presidential Proclamation in 1975; (2) Certifications from the Department of Agriculture; (3) a Zoning Ordinance of the Municipality of Nasugbu, approved by the Province of Batangas; and (4) by clear inference and admissions, Administrative Orders and Guidelines promulgated by DAR itself.

The records show that on November 20, 1975 even before the enactment of the CARP law, the Municipality of Nasugbu, Batangas was declared a "tourist zone" in the exercise of lawmaking power by then President Ferdinand E. Marcos under Proclamation No. 1520 (Rollo, pp. 122-123). This Presidential Proclamation is indubitably part of the law of the land.

On 20 March 1992 the Sangguniang Bayan of Nasugbu promulgated its Resolution No. 19, a zonification ordinance (Rollo, pp. 124-200), pursuant to its powers under Republic Act No. 7160, i.e., the Local Government Code of 1991. The municipal ordinance was approved by the Sangguniang Panlalawigan of Batangas (Rollo, p. 201). Under this enactment, portions of the petitioner's properties within the municipality were re-zonified as intended and appropriate for non-agricultural uses. These two issuances, together with Proclamation 1520, should be sufficient to determine the nature of the land as non-agricultural. But there is more.

The records also contain a certification dated March 1, 1993 from the Director of Region IV of the Department of Agriculture that the disputed lands are no longer economically feasible and sound for agricultural purposes (Rollo, p. 213).

DAR itself impliedly accepted and determined that the municipality of Nasugbu is non-agricultural when it affirmed the force and effect of Presidential Proclamation 1520. In an Order dated January 22, 1991, DAR granted the conversion of the adjoining and contiguous landholdings owned by Group Developer and Financiers, Inc. in Nasugbu pursuant to the Presidential Proclamation. The property alongside the disputed properties is now known as "Batulao Resort Complex". As will be shown later, the conversion of various other properties in Nasugbu has been ordered by DAR, including a property disputed in this petition, Hacienda Caylaway.

Inspite of all the above, the Court of Appeals concluded that the lands comprising petitioner's haciendas are agricultural, citing, among other things, petitioner's acts of voluntarily offering Hacienda Caylaway for sale and applying for conversion its lands from agricultural to non-agricultural.

Respondents, on the other hand, did not only ignore the administrative and executive decisions. It also contended that the subject land should be deemed agricultural because it is neither residential, commercial, industrial or timber. The character of a parcel of land, however, is not determined merely by a process of elimination. The actual use which the land is capable of should be the primordial factor.

RA 6657 explicitly limits its coverage thus:

The Comprehensive Agrarian Reform Law of 1998 shall cover, regardless of tenurial arrangement and commodity produced, all public and private agricultural lands as provided in Proclamation No. 131 and Executive

Order No. 229, including other lands of the public domain suitable for agriculture.

More specifically, the following lands are covered by the Comprehensive Agrarian Reform Program:

(a) All alienable and disposable lands of the public domain devoted to or suitable for agriculture. No reclassification of forest or mineral lands to agricultural lands shall be undertaken after the approval of this Act until Congress, taking into account, ecological, developmental and equity considerations, shall have determined by law, the specific limits of the public domain;

(b) All lands of the public domain in excess of the specific limits as determined by Congress in the preceding paragraph;

(c) All other lands owned by the Government devoted to or suitable for agriculture; and

(d) All private lands devoted to or suitable for a agriculture regardless of the agricultural products raised or that can be raised thereon." (RA 6657, Sec. 4; emphasis provided)

In Luz Farms v. Secretary of the Department of Agrarian Reform and Natalia Realty, Inc. v. Department of Agrarian Reform, this Court had occasion to rule that agricultural lands are only those which are arable and suitable.

It is at once noticeable that the common factor that classifies land use as agricultural, whether it be public or private land, is its suitability for agriculture. In this connection, RA 6657 defines "agriculture" as follows:

Agriculture, Agricultural Enterprises or Agricultural Activity means the cultivation of the soil, planting of crops, growing of fruit trees, raising of livestock, poultry or fish, including the harvesting of such farm products, and other farm activities, and practices performed by a farmer in conjunction with such farming operations done by persons whether natural or juridical. (RA 6657, sec. 3[b])

In the case at bar, petitioner has presented certifications issued by the Department of Agriculture to the effect that Haciendas Palico, Banilad and Caylaway are not feasible and economically viable for agricultural development due to marginal productivity of the soil, based on an examination of their slope, terrain, depth, irrigability, fertility, acidity, and erosion factors (Petition, Annex "L", Rollo, p. 213; Annex "U", Rollo, p. 228). This finding should be accorded respect considering that it came from competent authority, said Department being the agency possessed with the necessary expertise to determine suitability of lands to agriculture. The DAR Order dated January 22, 1991 issued by respondent itself stated that the adjacent land now known as the Batulao Resort Complex is hilly, mountainous, and with long and narrow ridges and deep gorges. No permanent sites are planted. Cultivation is by kaingin method. This confirms the findings of the Department of Agriculture.

Parenthetically, the foregoing finding of the Department of Agriculture also explains the validity of the reclassification of petitioner's lands by the Sangguniang Bayan of Nasugbu, Batangas, pursuant to Section 20 of the Local Government Code of 1991. It shows that the condition imposed by respondent Secretary of Agrarian Reform on petitioner for withdrawing its voluntary offer to sell Hacienda Caylaway, i.e., that the soil be unsuitable for agriculture, has been adequately met. In fact, the DAR in its Order in Case No. A-9999-050-97, involving a piece of land also owned by petitioner and likewise located in Caylaway, exempted it from the coverage of CARL (Order dated May 17, 1999; Annex "D" of Petitioner's Manifestation), on these grounds.

Furthermore, and perhaps more importantly, the subject lands are within an area declared in 1975 by Presidential Proclamation No. 1520 to be part of a tourist zone. This determination was made when the tourism prospects of the area were still for the future. The studies which led to the land classification were relatively freer from pressures and, therefore, more objective and open-minded. Respondent, however, contends that agriculture is not incompatible with the lands' being part of a tourist zone since "agricultural production, by itself, is a natural asset and, if properly set, can command tremendous aesthetic value in the form of scenic views and variety of countryside profiles." (Comment, Rollo, 579).

The contention is untenable. Tourist attractions are not limited to scenic landscapes and lush greeneries. Verily, tourism is enhanced by structures and facilities such as hotels, resorts, rest houses, sports clubs and golf courses, all of which bind the land and render it unavailable for cultivation. As aptly described by petitioner:

The development of resorts, golf courses, and commercial centers is inconsistent with agricultural development. True, there can be limited agricultural production within the context of tourism development. However, such small scale farming activities will be dictated by, and subordinate to the needs or tourism development. In fact, agricultural use of land within Nasugbu may cease entirely if deemed necessary by the Department of Tourism (Reply, Rollo, p. 400).

The lands subject hereof, therefore, are non-agricultural. Hence, the voluntary offer to sell Hacienda Caylaway should not be deemed an admission that the land is agricultural. Rather, the offer was made by petitioner in good faith, believing at the time that the land could still be developed for agricultural production. Notably, the offer to sell was made as early as May 6, 1988, before the soil thereon was found by the Department of Agriculture to be unsuitable for agricultural development (the Certifications were issued on 2 February 1993 and 1 March 1993). Petitioner's withdrawal of its voluntary offer to sell, therefore, was not borne out of a whimsical or capricious change of heart. Quite simply, the land turned out to be outside of the coverage of the CARL, which by express provision of RA 6657, Section 4, affects only public and private agricultural lands. As earlier stated, only on May 17, 1999, DAR Secretary Horacio Morales, Jr. approved the application for a lot in Caylaway, also owned by petitioner, and confirmed the seven (7) documentary evidences proving the Caylaway area to be non-agricultural (DAR Order dated 17 May 1999, in Case No. A-9999-050-97, Annex "D" Manifestation).

The DAR itself has issued administrative circulars governing lands which are outside of CARP and may not be subjected to land reform. Administrative Order No. 3, Series of 1996 declares in its policy statement what landholdings are outside the coverage of

CARP. The AO is explicit in providing that such non-covered properties shall be reconveyed to the original transferors or owners.

These non-covered lands are:

a. Land, or portions thereof, found to be no longer suitable for agriculture and, therefore, could not be given appropriate valuation by the Land Bank of the Philippines (LBP);

b. Those were a Conversion Order has already been issued by the DAR allowing the use of the landholding other than for agricultural purposes in accordance with Section 65 of R.A. No. 6657 and Administrative Order No. 12, Series of 1994;

c. Property determined to be exempted from CARP coverage pursuant to Department of Justice Opinion Nos. 44 and 181; or

d. Where a Presidential Proclamation has been issued declaring the subject property for certain uses other than agricultural. (Annex "F", Manifestation dated July 23, 1999)

The properties subject of this Petition are covered by the first, third, and fourth categories of the Administrative Order. The DAR has disregarded its own issuances which implement the law.

To make the picture clearer, I would like to summarize the law, regulations, ordinances, and official acts which show beyond question that the disputed property is non-agricultural, namely:

(a) The Law. Proclamation 1520 dated November 20, 1975 is part of the law of the land. It declares the area in and around Nasugbu, Batangas, as a Tourist Zone. It has not been repealed, and has in fact been used by DAR to justify conversion of other contiguous and nearby properties of other parties.

(b) Ordinances of Local Governments. Zoning ordinance of the Sangguniang Bayan of Nasugbu, affirmed by the Sangguniang Panlalawigan of Batangas, expressly defines the property as tourist, not agricultural. The power to classify its territory is given by law to the local governments.

(c) Certification of the Department of Agriculture that the property is not suitable and viable for agriculture. The factual nature of the land, its marginal productivity and non-economic feasibility for cultivation, are described in detail.

(d) Acts of DAR itself which approved conversion of contiguous or adjacent land into the Batulao Resorts Complex. DAR described at length the non-agricultural nature of Batulao and of portion of the disputed property, particularly Hacienda Caylaway.

(e) DAR Circulars and Regulations. DAR Administrative Order No. 6, Series of 1994 subscribes to the Department of Justice opinion that the lands classified as non-agricultural before the CARP Law, June 15, 1988, are exempt from CARP. DAR Order dated January 22, 1991 led to the Batulao Tourist Area. DAR Order in Case No. H-9999-050-97, May 17, 1999, exempted 13.5 hectares of Caylaway, similarly situated and of the same nature as Batulao, from coverage. DAR Administrative Order No. 3, Series of 1996, if followed, would clearly exclude subject property from coverage.

As earlier shown, DAR has, in this case, violated its own circulars, rules and regulations.

In addition to the DAR circulars and orders which DAR itself has not observed, the petitioner has submitted a municipal map of Nasugbu, Batangas (Annex "E", Manifestation dated July 23, 1999). The geographical location of Palico, Banilad, and Caylaway in relation to the GDFI property, now Batulao Tourist Resort, shows that the properties subject of this case are equally, if not more so, appropriate for conversion as the GDFI resort.

Petitioner's application for the conversion of its lands from agricultural to non-agricultural was meant to stop the DAR from proceeding with the compulsory acquisition of the lands and to seek a clear and authoritative declaration that said lands are outside of the coverage of the CARL and can not be subjected to agrarian reform.

Petitioner assails respondent's refusal to convert its lands to non-agricultural use and to recognize Presidential Proclamation No. 1520, stating that respondent DAR has not been consistent in its treatment of applications of this nature. It points out that in the other case involving adjoining lands in Nasugbu, Batangas, respondent DAR ordered the conversion of the lands upon application of Group Developers and Financiers, Inc. Respondent DAR, in that case, issued an Order dated January 22, 1991 denying the motion for reconsideration filed by the farmers thereon and finding that:

In fine, on November 27, 1975, or before the movants filed their instant motion for reconsideration, then President Ferdinand E. Marcos issued Proclamation No. 1520, declaring the municipalities of Maragondon and Ternate in the province of Cavite and the municipality of Nasugbu in the province of Batangas as tourist zone. Precisely, the landholdings in question are included in such proclamation. Up to now, this office is not aware that said issuance has been repealed or amended (Petition, Annex "W"; Rollo, p. 238).

The DAR Orders submitted by petitioner, and admitted by DAR in its Rejoinder (Rejoinder of DAR dated August 20, 1999), show that DAR has been inconsistent to the extent of being arbitrary.

Apart from the DAR Orders approving the conversion of the adjoining property now called Batulao Resort Complex and the DAR Order declaring parcels of the Caylaway property as not covered by CARL, a major Administrative Order of DAR may also be mentioned.

The Department of Justice in DOJ Opinion No. 44 dated March 16, 1990 (Annex "A" of Petitioner's Manifestation) stated that DAR was given authority to approve land

conversions only after June 15, 1988 when RA 6657, the CARP Law, became effective. Following the DOJ Opinion, DAR issued its AO No. 06, Series of 1994 providing for the Guidelines on Exemption Orders (Annex "B", Id.). The DAR Guidelines state that lands already classified as non-agricultural before the enactment of CARL are exempt from its coverage. Significantly, the disputed properties in this case were classified as tourist zone by no less than a Presidential Proclamation as early as 1975, long before 1988.

The above, petitioner maintains, constitute unequal protection of the laws. Indeed, the Constitution guarantees that "(n)o person shall be deprived of life, liberty or property without due process of law, nor shall any person be denied the equal protection of the laws" (Constitution, Art. III, Sec. 1). Respondent DAR, therefore, has no alternative but to abide by the declaration in Presidential Proclamation 1520, just as it did in the case of Group Developers and Financiers, Inc., and to treat petitioners' properties in the same way it did the lands of Group Developers, i.e., as part of a tourist zone not suitable for agriculture.

On the issue of non-payment of just compensation which results in a taking of property in violation of the Constitution, petitioner argues that the opening of a trust account in its favor did not operate as payment of the compensation within the meaning of Section 16 (e) of RA 6657. In Land Bank of the Philippines v. Court of Appeals (249 SCRA 149, at 157 [1995]), this Court struck down as null and void DAR Administrative Circular No. 9, Series of 1990, which provides for the opening of trust accounts in lieu of the deposit in cash or in bonds contemplated in Section 16 (e) of RA 6657.

It is very explicit therefrom (Section 16 [e]) that the deposit must be made only in "cash" or in "LBP bonds." Nowhere does it appear nor can it be inferred that the deposit can be made in any other form. If it were the intention to include a "trust account" among the valid modes of deposit, that should have been made express, or at least, qualifying words ought to have appeared from which it can be fairly deduced that a "trust account" is allowed. In sum, there is no ambiguity in Section 16(e) of RA 6657 to warrant an expanded construction of the term "deposit."

xxx xxx xxx

In the present suit, the DAR clearly overstepped the limits of its powers to enact rules and regulations when it issued Administrative Circular No. 9. There is no basis in allowing the opening of a trust account in behalf of the landowner as compensation for his property because, as heretofore discussed, section 16(e) of RA 6657 is very specific that the deposit must be made only in "cash" or in "LBP bonds." In the same vein, petitioners cannot invoke LRA Circular Nos. 29, 29-A and 54 because these implementing regulations cannot outweigh the clear provision of the law. Respondent court therefore did not commit any error in striking down Administrative Circular No. 9 for being null and void.

There being no valid payment of just compensation, title to petitioner's landholdings cannot be validly transferred to the Government. A close scrutiny of the procedure laid down in Section 16 of RA 6657 shows the clear legislative intent that there must first be payment of the fair value of the land subject to agrarian reform, either directly to the affected landowner or by deposit of cash or LBP bonds in the DAR-designated bank, before the DAR can take possession of the land and request the register of deeds to

issue a transfer certificate of title in the name of the Republic of the Philippines. This is only proper inasmuch as title to private property can only be acquired by the government after payment of just compensation In Association of Small Landowners in the Philippines v. Secretary of Agrarian Reform (175 SCRA 343, 391 [1989]), this Court held:

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

Necessarily, the issuance of the CLOAs by respondent DAR on October 30, 1993 and their distribution to farmer-beneficiaries were illegal inasmuch as no valid payment of compensation for the lands was as yet effected. By law, Certificates of Land Ownership Award are issued only to the beneficiaries after the DAR takes actual possession of the land (RA 6657, Sec. 24), which in turn should only be after the receipt by the landowner of payment or, in case of rejection or no response from the landowner, after the deposit of the compensation for the land in cash or in LBP bonds (RA 6657, Sec. 16[e]).

Respondents argue that the Land Bank ruling should not be made to apply to the compulsory acquisition of petitioner's landholdings in 1993, because it occurred prior to the promulgation of the said decision (October 6, 1995). This is untenable. Laws may be given retroactive effect on constitutional considerations, where the prospective application would result in a violation of a constitutional right. In the case at bar, the expropriation of petitioner's lands was effected without a valid payment of just compensation, thus violating the Constitutional mandate that "(p)rivate property shall not be taken for public use without just compensation" (Constitution, Art. III, Sec. 9). Hence, to deprive petitioner of the benefit of the Land Bank ruling on the mere expedient that it came later than the actual expropriation would be repugnant to petitioner's fundamental rights.

The controlling last two (2) pages of the ponencia state:

Finally, we stress that the failure of respondent DAR to comply with the requisites of due process in the acquisition proceedings does not give this Court the power to nullify the CLOA's already issued to the farmer beneficiaries. To assume the power is to short-circuit the administrative process, which has yet to run its regular course. Respondent DAR must be given the chance to correct its procedural lapses in the acquisition proceedings. In Hacienda Palico alone, CLOA's were issued to 177 farmer beneficiaries in 1993. Since then until the present, these farmers have been cultivating their lands. It goes against the basic precepts of justice, fairness and equity to deprive these people, through no fault of their own, of the land they till. Anyhow, the farmer beneficiaries hold the property in trust for the rightful owner of the land.

I disagree with the view that this Court cannot nullify illegally issued CLOA's but must ask the DAR to first reverse and correct itself.

Given the established facts, there was no valid transfer of petitioner's title to the Government. This being so, there was also no valid title to transfer to third persons; no basis for the issuance of CLOAs.

Equally important, CLOAs do not have the nature of Torrens Title. Administrative cancellation of title is sufficient to invalidate them.

The Court of Appeals said so in its Resolution in this case. It stated:

Contrary to the petitioner's argument that issuance of CLOAs to the beneficiaries prior to the deposit of the offered price constitutes violation of due process, it must be stressed that the mere issuance of the CLOAs does not vest in the farmer/grantee ownership of the land described therein.

At most the certificate merely 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. Thus failure on the part of the farmer/grantee to comply with his obligations is a ground for forfeiture of his certificate of transfer. Moreover, where there is a finding that the property is indeed not covered by CARP, then reversion to the landowner shall consequently be made, despite issuance of CLOAs to the beneficiaries. (Resolution dated January 17, 1997, p. 6)

DAR Administrative Order 03, Series of 1996 (issued on August 8, 1996; Annex "F" of Petitioner's Manifestation) outlines the procedure for the reconveyance to landowners of properties found to be outside the coverage of CARP. DAR itself acknowledges that they can administratively cancel CLOAs if found to be erroneous. From the detailed provisions of the Administrative Order, it is apparent that there are no impediments to the administrative cancellation of CLOAs improperly issued over exempt properties. The procedure is followed all over the country. The DAR Order spells out that CLOAs are not Torrens Titles. More so if they affect land which is not covered by the law under which they were issued. In its Rejoinder, respondent DAR states:

3.2. And, finally, on the authority of DAR/DARAB to cancel erroneously issued Emancipation Patents (EPs) or Certificate of Landownership Awards (CLOAs), same is enshrined, it is respectfully submitted, in Section 50 of Republic Act No. 6657.

In its Supplemental Manifestation, petitioner points out, and this has not been disputed by respondents, that DAR has also administratively cancelled twenty five (25) CLOAs covering Nasugbu properties owned by the Manila Southcoast Development Corporation near subject Roxas landholdings. These lands were found not suitable for agricultural purposes because of soil and topographical characteristics similar to those of the disputed properties in this case.

The former DAR Secretary, Benjamin T. Leong, issued DAR Order dated January 22, 1991 approving the development of property adjacent and contiguous to the subject properties of this case into the Batulao Tourist Resort. Petitioner points out that Secretary Leong, in this Order, has decided that the land —

1. Is, as contended by the petitioner GDFI "hilly, mountainous, and characterized by poor soil condition and nomadic method of cultivation, hence not suitable to agriculture."

2. Has as contiguous properties two haciendas of Roxas y Cia and found by Agrarian Reform Team Leader Benito Viray to be "generally rolling, hilly and mountainous and strudded (sic) with long and narrow ridges and deep gorges. Ravines are steep grade ending in low dry creeks."

3. Is found in an. area where "it is quite difficult to provide statistics on rice and corn yields because there are no permanent sites planted. Cultivation is by Kaingin Method."

4. Is contiguous to Roxas Properties in the same area where "the people entered the property surreptitiously and were difficult to stop because of the wide area of the two haciendas and that the principal crop of the area is sugar . . .." (emphasis supplied).

I agree with petitioner that under DAR AO No. 03, Series of 1996, and unlike lands covered by Torrens Titles, the properties falling under improperly issued CLOAs are cancelled by mere administrative procedure which the Supreme Court can declare in cases properly and adversarially submitted for its decision. If CLOAs can under the DAR's own order be cancelled administratively, with more reason can the courts, especially the Supreme Court, do so when the matter is clearly in issue.

With due respect, there is no factual basis for the allegation in the motion for intervention that farmers have been cultivating the disputed property.

The property has been officially certified as not fit for agriculture based on slope, terrain, depth, irrigability, fertility, acidity, and erosion. DAR, in its Order dated January 22, 1991, stated that "it is quite difficult to provide statistics on rice and corn yields (in the adjacent property) because there are no permanent sites planted. Cultivation is by kaingin method." Any allegations of cultivation, feasible and viable, are therefore falsehoods.

The DAR Order on the adjacent and contiguous GDFI property states that "(T)he people entered the property surreptitiously and were difficult to stop . . .."

The observations of Court of Appeals Justices Verzola and Magtolis in this regard, found in their dissenting opinion (Rollo, p. 116), are relevant:

2.9 The enhanced value of land in Nasugbu, Batangas, has attracted unscrupulous individuals who distort the spirit of the Agrarian Reform Program in order to turn out quick profits. Petitioner has submitted copies of CLOAs that have been issued to persons other than those who were identified in the Emancipation Patent Survey Profile as legitimate Agrarian Reform beneficiaries for particular portions of petitioner's lands. These persons to whom the CLOAs were awarded, according to petitioner, are not and have never been workers in petitioner's lands. Petitioners say they are not even from Batangas but come all the way from Tarlac. DAR itself is not unaware of the mischief in the implementation of the CARL in some areas of the country, including Nasugbu. In fact, DAR published a

"WARNING TO THE PUBLIC" which appeared in the Philippine Daily Inquirer of April 15, 1994 regarding this malpractice.

2.10 Agrarian Reform does not mean taking the agricultural property of one and giving it to another and for the latter to unduly benefit therefrom by subsequently "converting" the same property into non-agricultural purposes.

2.11 The law should not be interpreted to grant power to the State, thru the DAR, to choose who should benefit from multi-million peso deals involving lands awarded to supposed agrarian reform beneficiaries who then apply for conversion, and thereafter sell the lands as non-agricultural land.

Respondents, in trying to make light of this problem, merely emphasize that CLOAs are not titles. They state that "rampant selling of rights", should this occur, could be remedied by the cancellation or recall by DAR.

In the recent case of "Hon. Carlos O. Fortich, et. al. vs. Hon. Renato C. Corona, et. al." (G.R. No. 131457, April 24, 1998), this Court found the CLOAs given to the respondent farmers to be improperly issued and declared them invalid. Herein petitioner Roxas and Co., Inc. has presented a stronger case than petitioners in the aforementioned case. The procedural problems especially the need for referral to the Court of Appeals are not present. The instant petition questions the Court of Appeals decision which acted on the administrative decisions. The disputed properties in the present case have been declared non-agricultural not so much because of local government action but by Presidential Proclamation. They were found to be non-agricultural by the Department of Agriculture, and through unmistakable implication, by DAR itself. The zonification by the municipal government, approved by the provincial government, is not the only basis.

On a final note, it may not be amiss to stress that laws which have for their object the preservation and maintenance of social justice are not only meant to favor the poor and underprivileged. They apply with equal force to those who, notwithstanding their more comfortable position in life, are equally deserving of protection from the courts. Social justice is not a license to trample on the rights of the rich in the guise of defending the poor, where no act of injustice or abuse is being committed against them. As we held in Land Bank (supra.):

It has been declared that the duty of the court to protect the weak and the underprivileged should not be carried out to such an extent as to deny justice to the landowner whenever truth and justice happen to be on his side. As eloquently stated by Justice Isagani Cruz:

. . . social justice — or any justice for that matter — is for the deserving, whether he be a millionaire in his mansion or a pauper in his hovel. It is true that, in case of reasonable doubt, we are called upon to tilt the balance in favor of the poor simply because they are poor, to whom the Constitution fittingly extends its sympathy and compassion. But never is it justified to prefer the poor simply because they are poor, or to eject the rich simply because they are

rich, for justice must always be served, for poor and rich alike, according to the mandate of the law.

IN THE LIGHT OF THE FOREGOING, I vote to grant the petition for certiorari; and to declare Haciendas Palico, Banilad and Caylaway, all situated in Nasugbu, Batangas, to be non-agricultural and outside the scope of Republic Act No. 6657. I further vote to declare the Certificates of Land Ownership Award issued by respondent Department of Agrarian Reform null and void and to enjoin respondents from proceeding with the compulsory acquisition of the lands within the subject properties. I finally vote to DENY the motion for intervention.