Comprehensive Agrarian Reform Law

Social Legislation are those body of laws that the purpose of which is to CURE social illness.

I. Philippine Constitutions and CARL’s Antecedents

History of Agrarian Reform in the Philippines

Pre-Spanish Period

“This land is Ours God gave this land to us”

Before the Spaniards came to the Philippines, Filipinos lived in villages or barangays ruled by chiefs or datus. The datus comprised the nobility. Then came the maharlikas (freemen), followed by the aliping mamamahay (serfs) and aliping saguiguilid (slaves).

However, despite the existence of different classes in the social structure, practically everyone had access to the fruits of the soil. Money was unknown, and rice served as the medium of exchange............................................................................................................................................................. Spanish Period

“United we stand, divided we fall”

When the Spaniards came to the Philippines, the concept of encomienda (Royal Land Grants) was introduced. This system grants that Encomienderos must defend his encomienda from external attack, maintain peace and order within, and support the missionaries. In turn, the encomiendero acquired the right to collect tribute from the indios (native).

The system, however, degenerated into abuse of power by the encomienderos The tribute soon became land rents to a few powerful landlords. And the natives who once cultivated the lands in freedom were transformed into mere share tenants.............................................................................................................................................................

1st Philippine Republic

“The yoke has finally broken”

When the First Philippine Republic was established in 1899, Gen. Emilio Aguinaldo declared in the Malolos Constitution his intention to confiscate large estates, especially the so-called Friar lands.

However, as the Republic was short-lived, Aguinaldo’s plan was never implemented.............................................................................................................................................................

American Period

“Long live America”

Significant legislation enacted during the American Period:

Philippine Bill of 1902 – Set the ceilings on the hectare of private individuals and corporations may acquire: 16 has. for private individuals and 1,024 has. for corporations.

Land Registration Act of 1902 (Act No. 496) – Provided for a comprehensive registration of land titles under the Torrens system.

Public Land Act of 1903 – introduced the homestead system in the Philippines.

Tenancy Act of 1933 (Act No. 4054 and 4113) – regulated relationships between landowners and tenants of rice (50-50 sharing) and sugar cane lands.

The Torrens system, which the Americans instituted for the registration of lands, did not solve the problem completely. Either they were not aware of the law or if they did, they could not pay the survey cost and other fees required in applying for a Torrens title. ............................................................................................................................................................

Commonwealth Period

“Government for the Filipinos”

President Manuel L. Quezon espoused the "Social Justice" program to arrest the increasing social unrest in Central Luzon.

Significant legislation enacted during Commonwealth Period:

1935 Constitution – "The promotion of social justice to ensure the well-being and economic security of all people should be the concern of the State" 

Commonwealth Act No. 178 (An Amendment to Rice Tenancy Act No. 4045), Nov. 13, 1936 – Provided for certain controls in the landlord-tenant relationships

Commonwealth Act. No. 461, 1937 – Specified reasons for the dismissal of tenants and only with the approval of the Tenancy Division of the Department of Justice.

Rural Program Administration, created March 2, 1939 – Provided the purchase and lease of haciendas and their sale and lease to the tenants.

Commonwealth Act No. 441 enacted on June 3, 1939 – Created the National Settlement Administration with a capital stock of P20,000,000.

............................................................................................................................................................ Japanese Occupation

“The Era of Hukbalahap”

The Second World War II started in Europe in 1939 and in the Pacific in 1941.

Hukbalahap controlled whole areas of Central Luzon; landlords who supported the Japanese lost their lands to peasants while those who supported the Huks earned fixed rentals in favor of the tenants.

Unfortunately, the end of war also signaled the end of gains acquired by the peasants.

Upon the arrival of the Japanese in the Philippines in 1942, peasants and workers organizations grew strength. Many peasants took up arms and identified themselves with the anti-Japanese group, the HUKBALAHAP (Hukbo ng Bayan Laban sa Hapon).............................................................................................................................................................

Philippine Republic

“The New Republic”

After the establishment of the Philippine Independence in 1946, the problems of land tenure remained. These became worst in certain areas. Thus the Congress of the Philippines revised the tenancy law.

Republic Act No. 34 -- Established the 70-30 sharing arrangements and regulating share-tenancy contracts.:

Republic Act No. 1199 (Agricultural Tenancy Act of 1954) -- governed the relationship between landowners and tenant farmers by organizing share-tenancy and leasehold system. The law provided the security of tenure of tenants. It also created the Court of Agrarian Relations.

Republic Act No. 1400 (Land Reform Act of 1955) -- Created the Land Tenure Administration (LTA) which was responsible for the acquisition and distribution of large tenanted rice and corn lands over 200 hectares for individuals and 600 hectares for corporations.

Republic Act No. 3844 of August 8, 1963 (Agricultural Land Reform Code) -- Abolished share tenancy, institutionalized leasehold, set retention limit at 75 hectares, invested rights of preemption and redemption for tenant farmers, provided for an administrative machinery for implementation, institutionalized a judicial system of agrarian cases, incorporated extension, marketing and supervised credit system of services of farmer beneficiaries.

The RA was hailed as one that would emancipate Filipino farmers from the bondage of tenancy.

President Ferdinand Marcos (1965-1986). Proclamation No. 1081 on September 21, 1972 ushered the Period of the New Society. Five days after the proclamation of Martial Law, the entire country was proclaimed a land reform area and simultaneously the Agrarian Reform Program was decreed.

President Marcos enacted the following laws:

Republic Act No. 6389, (Code of Agrarian Reform) and RA No. 6390 of 1971 -- Created the Department of Agrarian Reform and the Agrarian Reform Special Account Fund. It strengthen the position of farmers and expanded the scope of agrarian reform.

Presidential Decree No. 2, September 26, 1972 -- Declared the country under land reform program. It enjoined all agencies and offices of the government to extend full cooperation and assistance to the DAR. It also activated the Agrarian Reform Coordinating Council

Presidential Decree No. 27, October 21, 1972 -- Restricted land reform scope to tenanted rice and corn lands and set the retention limit at 7 hectares.

President Corazon C. Aquino (1986-1992)

The Constitution ratified by the Filipino people during the administration of President Corazon C. Aquino provides under Section 21 under Article II that “The State shall promote comprehensive rural development and agrarian reform.”

On June 10, 1988, former President Corazon C. Aquino signed into law Republic Act No. 6657 or otherwise known as the Comprehensive Agrarian Reform Law (CARL). The law became effective on June 15, 1988.

Republic Act No. 6657, June 10, 1988 (Comprehensive Agrarian Reform Law) – An act which became effective June 15, 1988 and instituted a comprehensive agrarian reform program to promote social justice and industrialization providing the mechanism for its implementation and for other purposes. This law is still the one being implemented at present.

Executive Order No. 405, June 14, 1990 – Vested in the Land Bank of the Philippines the responsibility to determine land valuation and compensation for all lands covered by CARP.

Executive Order No. 407, June 14, 1990 – Accelerated the acquisition and distribution of agricultural lands, pasture lands, fishponds, agro-forestry lands and other lands of the public domain suitable for agriculture.

President Fidel V. Ramos (1992-1998) When President Fidel V. Ramos formally took over in 1992, his administration came face to face with publics who have lost confidence in the agrarian reform program. His administration committed to the vision “Fairer, faster and more meaningful implementation of the Agrarian Reform Program.

President Fidel V. Ramos enacted the following laws: Republic Act No. 7881, 1995 – Amended certain provisions of RA 6657 and exempted fishponds and prawns from

the coverage of CARP.

*Importance of Land Reform and its Constitutionality*

Assoc. of Small Landowners vs. Hon. Secretary, 175 SCRA 343

"Land for the Landless" is a slogan that underscores the acute imbalance in the distribution of this precious resource among our people. But it is more than a slogan. Through the brooding centuries, it has become a battle-cry dramatizing the increasingly urgent demand of the dispossessed among us for a plot of earth as their place in the sun.

Recognizing this need, the Constitution in 1935 mandated the policy of social justice to "insure the well-being and economic security of all the people,” especially the less privileged. In 1973, the new Constitution affirmed this goal adding specifically that "the State shall regulate the acquisition, ownership, use, enjoyment and disposition of private property and equitably diffuse property ownership and profits." Significantly, there was also the specific injunction to "formulate and implement an agrarian reform program aimed at emancipating the tenant from the bondage of the soil."

The Constitution of 1987 was not to be outdone. Besides echoing these sentiments, it also adopted one whole and separate Article XIII on Social Justice and Human Rights, containing grandiose but undoubtedly sincere provisions for the uplift of the common people. These include a call in the following words for the adoption by the State of an agrarian reform program:

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

Earlier, in fact, R.A. No. 3844, otherwise known as the Agricultural Land Reform Code, had already been enacted by the Congress of the Philippines on August 8, 1963, in line with the above-stated principles. This was substantially superseded almost a decade later by P.D. No. 27, which was promulgated on October 21, 1972, along with martial law, to provide for the compulsory acquisition of private lands for distribution among tenant-farmers and to specify maximum retention limits for landowners.

On July 17, 1987, President Corazon C. Aquino issued E.O. No. 228, declaring full land ownership in favor of the beneficiaries of P.D. No. 27 and providing for the valuation of still unvalued lands covered by the decree as well as the manner of their payment. This was followed on July 22, 1987 by Presidential Proclamation No. 131, instituting a comprehensive agrarian reform program (CARP), and E.O. No. 229, providing the mechanics for its implementation.

Subsequently, the revived Congress of the Philippines took over legislative power from the President and started its own deliberations, including extensive public hearings, on the improvement of the interests of farmers. The result, after almost a year of spirited debate, was the enactment of R.A. No. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988, which President Aquino signed on June 10, 1988. This law, while considerably changing the earlier mentioned enactments, nevertheless gives them supplementary effect insofar as they are not inconsistent with its provisions.

The promulgation of P.D. No. 27 by President Marcos in the exercise of his powers under martial law has already been sustained in Gonzales v. Estrella. As for the power of President Aquino to promulgate Proc. No. 131 and E.O. Nos. 228 and 229, the same was authorized under Section 6 of the Transitory Provisions of the 1987 Constitution.

Difference between PD 27 (Tenants Emancipation Decree) and RA 6657 (Comprehensive Agrarian Reform Law)

PD 27 RA 6657Purpose Abolish leasehold in tenanted

lands. It made the tiller of the land the amortizing owner of the land he tills.

Main purpose is to provide land for the landless through acquiring and distribution of lands and providing support facilities and system for the benefit of the farmers.

Land Covered Private lands which are devoted to rice and corn ONLY.

Covers all public and private agricultural lands including other lands of public domain suitable for agriculture regardless of tenurial arrangement and commodity produced.

Effect in Implementing Land Reform Program

With the passage of RA 6657, it is only a suppletory law. This means, it will be applicable only to those matters not covered by RA 6657.

Main governing law of Agrarian Land Reform here in the Philippines.

Sigre vs. CA, G.R. No. 109568, August 8, 2002

The Court need not belabor the fact that R.A. 6657 or the CARP Law operates distinctly from P.D. 27. R.A. 6657 covers all public and private agricultural land including other lands of the public domain suitable for agriculture as provided for in Proclamation No. 131 and Executive Order No. 229;36 while, P.D. 27 covers rice and corn lands. On this score, E.O. 229, which provides for the mechanism of the Comprehensive Agrarian Reform Program, specifically states: "Presidential Decree No. 27, as amended, shall continue to operate with respect to rice and corn lands, covered thereunder. x x x" It cannot be gainsaid, therefore, that R.A. 6657 did not repeal or supersede, in any way, P.D. 27. And whatever provisions of P.D. 27 that are not inconsistent with R.A. 6657 shall be suppletory to the latter, and all rights acquired by the tenant-farmer under P.D. 27 are retained even with the passage of R.A. 6657.

Estolas vs. Mabalot, G.R. No. 133706, May 7, 2002

Facts:

A Certificate of Land Transfer (hereinafter referred to as CLT) was issued in favor of respondent over a 5,000 square meter lot (hereinafter referred to as subject land). Needing money for medical treatment, respondent passed on the subject land to the petitioner. According to respondent, there was only a verbal mortgage; while according to petitioner, a sale had taken place.

Respondent filed a Complaint against the petitioner before the Barangay Lupon in Pangasinan for the purpose of redeeming the subject land. When no amicable settlement was reached, the case was referred to the DAR regional office

. DAR’s District Office found that respondent merely gave the subject land to petitioner as guarantee for the payment of a loan he had incurred from the latter; and recommending that the CLT remain in the name of respondent and that the money loan be returned to petitioner.

Petitioner insisted that the subject land had been sold to him by respondent and requested the DAR to cancel the CLT in respondent’s name. Another investigation was conducted on the matter which led to the issuance of an Order issued by DAR Regional Director. In the said Order, the DAR found the act of respondent in surrendering the subject land in favor of petitioner as constituting abandonment thereof, and denied respondent’s prayer for redemption of the subject land. Respondent’s request for reinvestigation was denied in a Resolution.

Thus, respondent appealed the case to the DAR Central Office which an order was issued reversing the assailed Order of DAR Regional Director and ordering the petitioner to return the subject land to respondent. Petitioner’s Motion for Reconsideration was denied.

Issues:

A. Whether or not there is a valid abandonment made by Respondent Mabalot.

B. Whether the act of Respondent Mabalot in conveying to petitioner the right to possess and cultivate the disputed parcel of land constitutes a valid abandonment thereby rendering the property available for transfer to other bonafide farmers.

C. Whether the issuance of an emancipation patent and thereafter a transfer certificate of title in the name of petitioner has validated and legitimized possession and ownership over the disputed property."

Held:

Main Issue:Abandonment

The subject property was awarded to respondent by virtue of PD 27. A CLT was issued in his favor. PD 27 specifically provides that when private agricultural land -- whether classified as landed estate or not – is primarily devoted to rice and corn under a system of sharecrop or lease tenancy, the tenant farmers thereof shall be deemed owners of a portion constituting a family-size farm of five (5) hectares if not irrigated, and three (3) hectares if irrigated.

Petitioner avers that respondent neither protested when the former had the subject land surveyed and planted with 40 mango trees, nor attempted to return the money he had borrowed from petitioner in 1976. Because the lot has been abandoned by respondent, the beneficiary, and because PD 27 does not prohibit the transfer of properties acquired under it, petitioner theorizes that the Department of Agrarian Reform (DAR) may award the land to another qualified farmer-grantee.

Non-transferability of Land Awarded Under PD 27

We do not agree. PD 27 specifically provides that title to land acquired pursuant to its mandate or to that of the Land Reform Program of the government shall not be transferable except to the grantee’s heirs by hereditary succession, or back to the government by other legal means. The law is clear and leaves no room for interpretation.

Upon the promulgation of PD 27, their emancipation gave them the rights to possess, cultivate and enjoy the landholding for themselves. These rights were granted by the government to them as the tillers and to no other. Thus, to insure their continuous possession and enjoyment of the property, they could not, under the law, effect any transfer except back to the government or, by hereditary succession, to their successors.11

Furthermore, this Court has always ruled that agrarian laws must be interpreted liberally in favor of the grantees in order to give full force and effect to the clear intent of such laws: "to achieve a dignified existence for the small farmers"; and to make them "more independent, self-reliant and responsible citizens, and a source of genuine strength in our democratic society."12

Neither are we convinced that an award under PD 27 may be transferred to another in case the grantee abandons it. The law is explicit.

No Abandonment

For abandonment to exist, the following requisites must be proven: (a) a clear and absolute intention to renounce a right or claim or to desert a right or property and (b) an external act by which that intention is expressed or carried into effect. There must be an actual, not merely a projected, relinquishment; otherwise, the right or claim is not vacated or waived and, thus, susceptible of being appropriated by another. In the present case, no such "willful failure" has been demonstrated. Quite the contrary, respondent has continued to claim dominion over the land.

No Valid Reallocation

Furthermore, even if respondent did indeed abandon his right to possess and cultivate the subject land, any transfer of the property may only be made in favor of the government. In Corpuz v. Grospe,19 the Court held that there was a valid transfer of the land after the farmer-grantee had signed his concurrence to the Samahang Nayon Resolution surrendering his possession of the landholding. This voluntary surrender to the Samahang Nayon constituted a surrender or transfer to the government itself.

In the present case, there was no valid transfer in favor of the government. It was petitioner himself who requested the DAR to cancel respondent’s CLT and to issue another one in his favor.21 Unlike in the above-cited case, respondent’s land was not turned over to the government or to any entity authorized by the government to reallocate the farmholdings of tenant-farmers who refuse to become beneficiaries of PD 27. Petitioner cannot, by himself, take over a farmer-beneficiary’s landholding, allegedly on the ground that it was abandoned. The proper procedure for reallocation must be followed to ensure that there was indeed abandonment, and that the subsequent beneficiary is a qualified farmer-tenant as provided by law.

WHEREFORE, the Petition is hereby DENIED

Land Bank of the Phil. vs. Heirs of Eleuterio Cruz, G.R. No. 175175, September 29, 2008

Facts:

Case is regarding the valuation to the land of the respondents of which the area was placed by the government under the coverage of the operation land transfer program under PD 27.

The LBP, petitioners herein, valued the land in accordance with the guidelines set forth under PD 27 and EO No. 228 and pegged the value of the land amounting to P106,935.76 per hectare. Respondents rejected petitioner’s valuation and insist on claiming that the said land is worth between P150,00 to P200,000 per hectare.

The Cagayan Provincial Agrarian Reform Adjudicator (PARAD) however valued the land at P80,000 following the factors set under RA 6557 (CARL) and of which such value, as just compensation to the respondent, was approve by the lower court (RTC) setting as Special Agrarian Court (SAC).

Issue:

Whether or not PD 27 or RA 6557 is the applicable law in determining the value of the land which was taken under PD 27 or before RA 6557 was enacted.

Held:

The Court laid down in Paris v. Alfeche the applicability of P.D. No. 27 and E.O. No. 228 in relation to R.A. No. 6657 in the matter of the payment of just compensation. There the Court explained that while under P.D. No. 27 tenant farmers are already deemed owners of the land they till, they are still required to pay the cost of the land before the title is transferred to them and that pending the payment of just compensation, actual title to the tenanted land remains with the landowner.

In Paris, the application of the process of agrarian reform was still incomplete thus, the Court held therein that with the passage of R.A. No. 6657 before its completion, the process should now be completed under R.A. No. 6657, with P.D. No. 27 and E.O. No. 228 applying only suppletorily.

It would certainly be inequitable to determine just compensation based on the guideline provided by PD No. 27 and EO 228 considering the DAR’s failure to determine the just compensation for a considerable length of time. That just compensation should be determined in accordance with RA 6657, and not PD 27 or EO 228, is especially imperative considering that just compensation should be the full and fair equivalent of the property taken from its owner by the expropriator, the equivalent being real, substantial, full and ample.

The land therefore should be valued under RA 6657 following the guidelines set in DAR AO no. 5, series of 1998 and not under PD 27.

Constitutional Provisions regarding Land Reform

ARTICLE IIDECLARATION OF PRINCIPLES AND STATE POLICIES

Section 9. The State shall promote a just and dynamic social order that will ensure the prosperity and independence of the nation and free the people from poverty through policies that provide adequate social services, promote full employment, a rising standard of living, and an improved quality of life for all.

Section 10. The State shall promote social justice in all phases of national development.

Section 21. The State shall promote comprehensive rural development and agrarian reform.

ARTICLE XIINATIONAL ECONOMY AND PATRIMONY

Section 1. The goals of the national economy are a more equitable distribution of opportunities, income, and wealth; a sustained increase in the amount of goods and services produced by the nation for the benefit of the people; and an expanding productivity as the key to raising the quality of life for all, especially the under-privileged.

The State shall promote industrialization and full employment based on sound agricultural development and agrarian reform, through industries that make full and efficient use of human and natural resources, and which are competitive in both domestic and foreign markets. However, the State shall protect Filipino enterprises against unfair foreign competition and trade practices.

In the pursuit of these goals, all sectors of the economy and all regions of the country shall be given optimum opportunity to develop. Private enterprises, including corporations, cooperatives, and similar collective organizations, shall be encouraged to broaden the base of their ownership.

Section 3. Lands of the public domain are classified into agricultural, forest or timber, mineral lands and national parks. Agricultural lands of the public domain may be further classified by law according to the uses to which they may be devoted. Alienable lands of the public domain shall be limited to agricultural lands. Private corporations or associations may not hold such alienable lands of the public domain except by lease, for a period not exceeding twenty-five years, renewable for not more than twenty-five years, and not to exceed one thousand hectares in area. Citizens of the Philippines may lease not more than five hundred hectares, or acquire not more than twelve hectares thereof, by purchase, homestead, or grant.

Taking into account the requirements of conservation, ecology, and development, and subject to the requirements of agrarian reform, the Congress shall determine, by law, the size of lands of the public domain which may be acquired, developed, held, or leased and the conditions therefore.

ARTICLE XIIISOCIAL JUSTICE AND HUMAN RIGHTS

Section 1. The Congress shall give highest priority to the enactment of measures that protect and enhance the right of all the people to human dignity, reduce social, economic, and political inequalities, and remove cultural inequities by equitably diffusing wealth and political power for the common good.

To this end, the State shall regulate the acquisition, ownership, use, and disposition of property and its increments.

Section 2. The promotion of social justice shall include the commitment to create economic opportunities based on freedom of initiative and self-reliance.

AGRARIAN AND NATURAL RESOURCES REFORM

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

Section 5. The State shall recognize the right of farmers, farmworkers, and landowners, as well as cooperatives, and other independent farmers' organizations to participate in the planning, organization, and management of the program, and shall provide support to agriculture through appropriate technology and research, and adequate financial, production, marketing, and other support services.

Section 6. The State shall apply the principles of agrarian reform or stewardship, whenever applicable in accordance with law, in the disposition or utilization of other natural resources, including lands of the public domain under lease or concession suitable to agriculture, subject to prior rights, homestead rights of small settlers, and the rights of indigenous communities to their ancestral lands.

The State may resettle landless farmers and farmworkers in its own agricultural estates which shall be distributed to them in the manner provided by law.

Section 7. The State shall protect the rights of subsistence fishermen, especially of local communities, to the preferential use of the communal marine and fishing resources, both inland and offshore. It shall provide support to such fishermen through appropriate technology and research, adequate financial, production, and marketing assistance, and other services. The State shall also protect, develop, and conserve such resources. The protection shall extend to offshore fishing grounds of subsistence fishermen against foreign intrusion. Fishworkers shall receive a just share from their labor in the utilization of marine and fishing resources.

Section 8. The State shall provide incentives to landowners to invest the proceeds of the agrarian reform program to promote industrialization, employment creation, and privatization of public sector enterprises. Financial instruments used as payment for their lands shall be honored as equity in enterprises of their choice.

ARTICLE XVIIITRANSITORY PROVISIONS

Section 22. At the earliest possible time, the Government shall expropriate idle or abandoned agricultural lands as may be defined by law, for distribution to the beneficiaries of the agrarian reform program.

II. RA No. 6657 or the Comprehensive Agrarian Reform Law

A. Chapter I (Preliminary Chapter)

Industrialization as Component (Section 2)

SECTION 2. Declaration of Principles and Policies. - It is the policy of the State to pursue a Comprehensive Agrarian Reform Program (CARP). The welfare of the landless farmers and farm workers will receive the highest consideration to promote social justice and to move the nation towards sound rural development and industrialization, and the establishment of owner cultivatorship of economic-sized farms as the basis of Philippine agriculture.

To this end, a more equitable distribution and ownership of land, with due regard to the rights of landowners to just compensation and to the ecological needs of the nation, shall be undertaken to provide farmers and farm workers with the opportunity to enhance their dignity and improve the quality of their lives through greater productivity of agricultural lands.

The agrarian reform program is founded on the right of farmers and regular farm workers, who are landless, to own directly or collectively the lands they till or, in the case of other farm workers, to receive a share of the fruits thereof. To this end, the State shall encourage the just distribution of all agricultural lands, subject to the priorities and retention limits set forth in this Act, having taken into account ecological, developmental, and equity considerations, and subject to the payment of just compensation. The State shall respect the right of small landowners and shall provide incentives for voluntary land-sharing.

The State shall recognize the right of farmers, farm workers and landowners, as well as cooperatives and other independent farmers' organization, to participate in the planning, organization, and management of the program, and shall provide support to agriculture through appropriate technology and research, and adequate financial, production, marketing and other support services.chan robles virtual law library

The State shall apply the principles of agrarian reform or stewardship, whenever applicable, in accordance with law, in the disposition or utilization of other natural resources, including lands of the public domain, under lease or concession, suitable to agriculture, subject to prior rights, homestead rights of small settlers and the rights of indigenous communities to their ancestral lands.

The State may resettle landless farmers and farm workers in its own agricultural estates, which shall be distributed to them in the manner provided by law.

By means of appropriate incentives, the State shall encourage the formation and maintenance of economic-sized family farms to be constituted by individual beneficiaries and small landowners.

The State shall protect the rights of subsistence fishermen, especially of local communities, to the preferential use of communal marine and fishing resources, both inland and offshore. It shall provide support to such fishermen through appropriate technology and research, adequate financial, production and marketing assistance and other services, The State shall also protect, develop and conserve such resources. The protection shall extend to offshore fishing grounds of subsistence fishermen against foreign intrusion. Fishworkers shall receive a just share from their labor in the utilization of marine and fishing resources.

The State shall be guided by the principles that land has a social function and land ownership has a social responsibility. Owners of agricultural land have the obligation to cultivate directly or through labor administration the lands they own and thereby make the land productive.

The State shall provide incentives to landowners to invest the proceeds of the agrarian reform program to promote industrialization, employment and privatization of public sector enterprises. Financial instruments used as payment for lands shall contain features that shall enhance negotiability and acceptability in the marketplace.

The State may lease undeveloped lands of the public domain to qualified entities for the development of capital-intensive farms, traditional and pioneering crops especially those for exports subject to the prior rights of the beneficiaries under this Act.

Chavez vs. PEA, et al., G.R. No. 133250, July 9, 2002

Dispositions under the 1987 Constitution

The 1987 Constitution, like the 1935 and 1973 Constitutions before it, has adopted the Regalian doctrine. The 1987 Constitution declares that all natural resources are "owned by the State," and except for alienable agricultural lands of the public domain, natural resources cannot be alienated. Sections 2 and 3, Article XII of the 1987 Constitution state that –

"Section 2. All lands of the public domain, waters, minerals, coal, petroleum and other mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are owned by the State. With the exception of agricultural lands, all other natural resources shall not be alienated. The exploration, development, and utilization of natural resources shall be under the full control and supervision of the State. x x x.

Section 3. Lands of the public domain are classified into agricultural, forest or timber, mineral lands, and national parks. Agricultural lands of the public domain may be further classified by law according to the uses which they may be devoted. Alienable lands of the public domain shall be limited to agricultural lands. Private corporations or associations may not hold such alienable lands of the public domain except by lease, for a period not exceeding twenty-five years, renewable for not more than twenty-five years, and not to exceed one thousand

hectares in area. Citizens of the Philippines may lease not more than five hundred hectares, or acquire not more than twelve hectares thereof by purchase, homestead, or grant.

Taking into account the requirements of conservation, ecology, and development, and subject to the requirements of agrarian reform, the Congress shall determine, by law, the size of lands of the public domain which may be acquired, developed, held, or leased and the conditions therefor."

The 1987 Constitution continues the State policy in the 1973 Constitution banning private corporations from acquiring any kind of alienable land of the public domain. Like the 1973 Constitution, the 1987 Constitution allows private corporations to hold alienable lands of the public domain only through lease. As in the 1935 and 1973 Constitutions, the general law governing the lease to private corporations of reclaimed, foreshore and marshy alienable lands of the public domain is still CA No. 141.

The Rationale behind the Constitutional Ban

The rationale behind the constitutional ban on corporations from acquiring, except through lease, alienable lands of the public domain is not well understood. During the deliberations of the 1986 Constitutional Commission, the commissioners probed the rationale behind this ban, thus:

"FR. BERNAS: Mr. Vice-President, my questions have reference to page 3, line 5 which says:

`No private corporation or association may hold alienable lands of the public domain except by lease, not to exceed one thousand hectares in area.'

If we recall, this provision did not exist under the 1935 Constitution, but this was introduced in the 1973 Constitution. In effect, it prohibits private corporations from acquiring alienable public lands. But it has not been very clear in jurisprudence what the reason for this is. In some of the cases decided in 1982 and 1983, it was indicated that the purpose of this is to prevent large landholdings. Is that the intent of this provision?

MR. VILLEGAS: I think that is the spirit of the provision.

FR. BERNAS: In existing decisions involving the Iglesia ni Cristo, there were instances where the Iglesia ni Cristo was not allowed to acquire a mere 313-square meter land where a chapel stood because the Supreme Court said it would be in violation of this." (Emphasis supplied)

In Ayog v. Cusi,64 the Court explained the rationale behind this constitutional ban in this way:

"Indeed, one purpose of the constitutional prohibition against purchases of public agricultural lands by private corporations is to equitably diffuse land ownership or to encourage 'owner-cultivatorship and the economic family-size farm' and to prevent a recurrence of cases like the instant case. Huge landholdings by corporations or private persons had spawned social unrest."

However, if the constitutional intent is to prevent huge landholdings, the Constitution could have simply limited the size of alienable lands of the public domain that corporations could acquire. The Constitution could have followed the limitations on individuals, who could acquire not more than 24 hectares of alienable lands of the public domain under the 1973 Constitution, and not more than 12 hectares under the 1987 Constitution.

If the constitutional intent is to encourage economic family-size farms, placing the land in the name of a corporation would be more effective in preventing the break-up of farmlands. If the farmland is registered in the name of a corporation, upon the death of the owner, his heirs would inherit shares in the corporation instead of subdivided parcels of the farmland. This would prevent the continuing break-up of farmlands into smaller and smaller plots from one generation to the next.

The constitutional intent, under the 1973 and 1987 Constitutions, is to transfer ownership of only a limited area of alienable land of the public domain to a qualified individual. This constitutional intent is safeguarded by the provision prohibiting corporations from acquiring alienable lands of the public domain, since the vehicle to circumvent the constitutional intent is removed. The available alienable public lands are gradually decreasing in the face of an ever-growing population. The most effective way to insure faithful adherence to this constitutional intent is to grant or sell alienable lands of the public domain only to individuals. This, it would seem, is the practical benefit arising from the constitutional ban.

Agriculture (Section 3[b])

(b) Agriculture, Agricultural Enterprise or Agricultural Activity means 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 of juridical. (As amended by R. A. 7881)

Luz Farms vs. Honorable Secretary of DAR, 192 SCRA 51

The transcripts of the deliberation of the Constitutional Commission of 1986 on the meaning of the word “agricultural”, clearly show that it was never the intention 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 (the old land reform law), as land devoted to any growth, including but not limited to crop lands, saltbeds, fishponds, idle and abandoned land.

Agricultural Land (Section 3[c])

(c) Agricultural Land refers to land devoted to agricultural activity as defined in this Act and not classified as mineral, forest, residential, commercial or industrial land.

Natalia Realty, Inc. vs. DAR, 225 SCRA 51

Issue:

Are lands already classified for residential, commercial or industrial use, as approved by the Housing and Land Use Regulatory Board and its precursor agencies prior to 15 June 1988, covered by R.A. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988?

Held:

The Court succinctly held that lands reserved for, or converted to, non-agricultural land uses by government agencies other than the DAR, prior to the effectivity of RA No. 6657 (CARL), are not considered and treated as agricultural lands and therefore, outside the ambit of said law. It ruled that the undeveloped portions of the Antipolo Hils Subdivision cannot in any language be considered as ‘agricultural lands’. These lots were intended for residential use. They ceased to be agricultural lands upon approval of their inclusion in the Lungsod SIlangan Reservation.

NOTE:

DOJ Opinion No. 44, Series of 1990 and the case of Natalia Realty, Inc opine that with respect to the conversion of agricultural land covered by R.A. No. 6657 to non-agricultural uses, the authority of the DAR to approve such conversion may be exercised from the date of its effectivity, on June 15, 1988. Thus, all lands that are already classified as commercial, industrial or residential before June 15, 1988 no longer need any conversion clearance.

However, the reclassification of lands to non-agricultural uses shall not operate to divest tenant-farmers of their rights over lands covered by PD 27, which have been vested prior to June 15, 1988.

In order to implement the intent and purpose of the provisions of the aforecited laws, the DAR has issued guidelines through AO No. 4, Series of 2003.

(Please refer to the attached files together with this reviewer… The important provisions there are only the DISTURBANCE COMPENSATION, APPROVING AUTHORITIES, EFFECT ON PRE-EXISTING CARP COVERAGE and PROTESTS).

Roxas & Co., Inc. vs. CA, G.R. No. 127876, December 17, 1999

Facts:

This case involves three (3) haciendas in Nasugbu, Batangas owned by petitioner Roxas & Co., Inc and the validity of the acquisition of these haciendas by the government under RA No. 6657.

Petitioner is a domestic corporation and is the registered owner with TCTs and Tax Declarations of three haciendas, namely, Haciendas Palico, Banilad and Caylaway, all located in Nasugbu, Batangas.

Issue:

Whether or not the petitioner’s landholdings are subject to coverage under the CARL, 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 of Nasugbu as a tourist zone, and the zoning ordinance of the said Municipality re-classifying certain portions of the petitioner’s landholdings as non-agricultural or at the very least entitle the petitioner to apply for conversion as conceded by respondent DAR.

Held:

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 for conversion is the DAR.

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 and the applicable administrative procedure, the case is hereby remanded to the respondent DAR for proper acquisition proceedings and determination of petitioner’s application for conversion.

NHA vs. Allarde, G.R. No. 106593, November 16, 1999

Facts:

Lots 836 and 839, registered in the of the Republic of the Philippines, and covered by the TCT No. 34624 and No. 34627, respectively, were acquired by the Republic on April 2, 1938 from Philippine Trust Company. They form part of the Tala Estate in Bagong Silang, Kalookan City, which, on April 26, 1971, was reserved by Proclamation No. 843 for, among others, the housing programs of the National housing Authority.

According to private respondent Rufino Mateo, he had lived in the disputed lots since his birth in 1928. In 1959, he started farming and working on six-hectare portion of said lots, after the death of his father who had cultivated a 13 hectare portion of the same lots.

In 1989, Mateo filed with the DAR the petition for the award to them of subject disputed lots under CARP.

On March 18, 1992, the respondent spouses Mateo, relying on their claim that the subject lots are agricultural land within the coverage of the CARP, brought before the respondent RTC a complaint for damages with a prayer for a writ of preliminary injunction, to enjoin the NHA from bulldozing further and making constructions on the lots under controversy.

RTC Judge Allarde issued the injunction against NHA.

Held:

As early as April 26, 1971, the Tala Estate (included the disputed lots) was resrved, inter alia, under Presidential Proclamation No. 843, for the housing program of the NHA, the same has been categorized as not being devoted to the agricultural activity contemplated by Sec. 3(c) of RA 6657, and is, therefore, outside the coverage of the CARL. Verily, the assailed Orders of the respondent Court declaring the lots under controversy as “agricultural land” and restraining the petitioner NHA from involving the same in its housing project thereon, are evidently bereft of any sustainable basis.

Also, PD 1818 prohibits the Courts of the land from issuing injunctive writs against the implementation or execution of government infrastructure projects such as the housing and resettlement projects of NHA.

The Orders of the RTC of Kalookan City are hereby SET ASIDE.

NOTE:

The decision of this case was based on the decision of the court in Natalia Realty, Inc. case.

Advincula-Velasquez vs. CA,et al., G.R. No. 111387, June 8,2004

The petitioners were the agricultural lessees of a Riceland located in Parañaque Metro Manila.

In 1978, Sps. Nery and the Lorenzo sold the property to the Delta Motor’s Corporation (DMC). Petitioner Velasquez, in his capacity as leaseholder agricultural tenant, filed an action for the redemption of the said property before the Court of Agrarian Relation. The CAR dismiss the petition for lack on the part of the petitioner to redeem the property in its acquisition price in the amount of 2,319,210 pesos but directing the defendant to maintain the petitioner as agricultural lessee to the land in question.

Petitioner Velasquez and the defendants appealed the decision of the CAR to the Intermediate Appellate Court who affirmed the decision of the CAR. Petitioner Velasquez filed a petition for review to the Supreme Court who issued a temporary restraining order enjoining the CAR’s decision pending the out come of the petition.

In 1981, the land in question was reclassified as residential zone under the ordinance issued by the city of Manila. Later, the land in question was mortgage by the DMC to the PNB as a security for its obligation who later foreclose it because of the failure of the DMC to pay its account. The PNB in 1986 executed a deed of sale of the said land in favor of the Remman Enterprise Inc. who decided to develop it in to a residential subdivision.

Meanwhile, the Supreme Court issue a decision on the petition for review filed by the petitioner Velasquez affirming the decision of the IAC stating that the case had become moot and academic with regards the claim of the petitioner against the DMC considering that the property had been foreclose by the PNB declaring however that the petitioner may redeem the property from the PNB and its transferee. The record was remanded to the PARAD or the Provincial Agrarian Adjudication for the petitioner to exercise there right of redemption but since the case had become moot and academic, the PARAD denied the action of the petitioner to recover the property against the DMC since the land in question is now a residential land. The right of the petitioner as an agricultural lessee was terminated and the property was now in the possession of the Remman Enterprise, Inc. The petitioner filed a motion before the DARAB or the Department of Agrarian Adjudication Board who reverses the decision of the PARAD stating that the land in question is an agricultural land and uphold the right of the petitioner as an agricultural lessee to recover the said land .The Remman Enterprise filed an appeal before the CA who reverses the decision of the DARAB because the land in question was already reclassified as residential land as early as 1981 converting it from agricultural land in to non-agricultural land. The petitioner filed a motion to the Supreme Court.

Issue:

Whether or not the land was an agricultural land or a residential land.

Held:

According to the Supreme Court, agricultural land was defined under RA. 6657 as those land devoted to agricultural activities and not classified as forest, minerals, residential and industrial land.

The records show that as early as 1981, the landholding was reclassified as a low density zone under Metro Manila Zoning Ordinance No. 81-01, Series of 1981 before Rep. Act No. 6657 took effect on June 15, 1998. It has been considered as early as that time for residential purposes thus not within the ambit of CAR.

Indeed, lands not devoted to agricultural activity are outside the coverage of CARL. These include lands previously converted to non-agricultural uses prior to the effectivity of CARL by government agencies other than respondent DAR. Thus, denying this petition.

Agrarian Dispute (Section 3[d])

(d) Agrarian Dispute refers to 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.

It includes any controversy relating to compensation of lands acquired under this Act and other terms and conditions of transfer of ownership from landowners to farm workers, tenants and other agrarian reform beneficiaries, whether the disputants stand in the proximate relation of farm operator and beneficiary, landowner and tenant, or lessor and lessee.

Agricultural tenancy – “the physical possession by a person of a land devoted to agriculture, belonging to, or legally possessed by, another for purpose of production through the labor of the former and of the members of his immediate farm household, in consideration of the former agrees to share the harvest with the latter, or to pay a price certain or ascertainable, either in produce or in money, or both.”

Requisites of tenancy relationship

1.) The parties are the land owner and the tenant2.) The subject is an agricultural land3.) There is consent from the parties4.) The purpose is agricultural production5.) There is personal cultivation of the tenant6.) There is sharing of harvest by the parties

All these must concur to establish the juridical relationship of tenancy. Absence of one does not make one a tenant. Burden of proof in agrarian dispute lies on the tenant.

CASES:

Isidro vs. CA, 228 SCRA 503

Fact:

This is a petition for review on certiorari of the decision ** of the respondent Court of Appeals dated 27 February 1992 in CA-G.R. SP No. 26671 ordering petitioner to vacate the land in question and surrender possession thereof to the private respondent; and its 21 May 1992 resolution denying petitioner's motion for reconsideration for lack of merit.

Private respondent Natividad Gutierrez is the owner of a parcel of land with an area of 4.5 hectares located in Barrio Sta. Cruz, Gapan, Nueva Ecija. In 1985, Aniceta Garcia, sister of private respondent and also the overseer of the latter, allowed petitioner Remigio Isidro to occupy the swampy portion of the abovementioned land, consisting of one (1) hectare, in order to augment his (petitioner's) income to meet his family's needs. The occupancy of a portion of said land was subject to the condition that petitioner would vacate the land upon demand. Petitioner occupied the land without paying any rental and converted the same into a fishpond.

In 1990, private respondent through her overseer demanded from petitioner the return of the land, but the latter refused to vacate and return possession of said land, claiming that he had spent effort and invested capital in converting the same into a fishpond

A complaint for unlawful detainer was filed by private respondent against petitioner before the Municipal Trial Court (MTC) of Gapan, Nueva Ecija.

Issue:

"WHETHER OR NOT THE SUBJECT IS A FISHPOND AND UNDER THE LAW AND JURISPRUDENCE FISHPONDS ARE CLASSIFIED AS AGRICULTURAL LANDS THAT BEING AN AGRICULTURAL LAND THE SAME IS GOVERNED BY OUR TENANCY LAWS WHERE RULE 70 OF THE RULES OF COURT CANNOT BE SIMPLY APPLIED AND THAT UNDER THE RULES OF THE DEPARTMENT OF AGRARIAN REFORM ADJUDICATION BOARD, THE DETERMINATION OF WHETHER A PERSON WORKING ON A FISHPOND IS A TENANT OR NOT IS CLEARLY WITHIN THE EXCLUSIVE JURISDICTION OF THE DARAB.”

Held:

A case involving an agricultural land does not automatically make such case an agrarian dispute upon which the DARAB has jurisdiction. The mere fact that the land is agricultural does not ipso facto make the possessor an agricultural lessee or tenant.

The law provides for conditions or requisites before he can qualify as one and the land being agricultural is only one of them. The law states that an agrarian dispute must be a controversy relating to a tenurial arrangement over lands devoted to agriculture. And as previously mentioned, such arrangement may be leasehold, tenancy or stewardship.

Tenancy is not a purely factual relationship dependent on what the alleged tenant does upon the land. It is also a legal relationship. The intent of the parties, the understanding when the farmer is installed, and their written agreements, provided these are complied with and are not contrary to law, are even more important.

The essential requisites of a tenancy relationship are: (1) the parties are the landowner and the tenant: (2) the subject matter is agricultural land; (3) there is consent; (4) the purpose is agricultural production; (5) there is personal cultivation by the tenant; and (6) there is a sharing of harvests between the parties. All these requisites must concur in order to create a tenancy relationship between the parties. The absence of one does not make an occupant of a parcel of land, or a cultivator thereof, or a planter thereon, a de jure tenant. Unless a person establishes his status as a de jure tenant, he is not entitled to security of tenure nor is he covered by the Land Reform Program of the government under existing tenancy laws.

Whether or not private respondent knew of the conversion by petitioner of the idle, swampy land into a fishpond is immaterial in this case. The fact remains that the existence of all the requisites of a tenancy relationship was not proven by the petitioner. And in the absence of a tenancy relationship, the complaint for unlawful detainer is properly within the jurisdiction of the Municipal Trial Court, as provided in Sec. 33 of Batas Pambansa Blg. 129.

The petition is DENIED.

Suplico, et al. vs. CA, et al., G.R. No. 103103, June 17,1996 (requisites present)

Fact:

Isabel Tupas was the registered owner of a parcel of rice land, designated Lot No. 901-B-1, with an area of 120,000 square meters (12 hectares), in Taloc, Bago City. On 24 February 1977, she leased her landholding, excluding the 33,438-square-meter portion already tenanted by one Jose Jacinto, for the amount of P10,000.00 to petitioner Enrique P. Suplico, her brother-in-law, under a contract that was set to expire on 31 May 1982.

Some time in 1979, Armada started tilling an area of 32,945 square meters, identified to be Lot No. 901-B-1-D, of the farmland under an agreement with Enrique Suplico. Armada undertook to till the land while Suplico agreed to provide the farm implements and work animals. Suplico was to receive from Armada 62 cavans from the palay harvest per crop yield by way of rental for the use not only of the land but also of the work animals and a hand tractor. Private respondent resided with his family in a farmhouse on the land.

When, years later, Suplico threatened to eject Armada from the property, Armada initiated, on 03 May 1982, an action for damages and injunction against Suplico in the Court of Agrarian Relations ("CAR") in Bacolod City.

The trial court rendered its decision declaring private respondent a bona fide agricultural lessee. On appeal, the Court of Appeals, affirmed the decision of the court a quo and considered Armada to be a share tenant.

Issue:

Whether or not private respondent Armada should be held a tenant farmer entitled to security of tenure or a mere hired farm laborer.

Ruling:

The Court sees no reason to disturb the findings of both courts below. The facts found by the appellate court, sustaining the court a quo, readily converge towards one conclusion, and it is that tenancy did exist between the parties.

Firstly, private respondent was in actual possession of the land, and he there resided, with his family, in a farmhouse just like what a farm tenant normally would.

Secondly, private respondent and his wife were personally doing the farm work of plowing, planting, weeding and harvesting the area. The occasional and temporary hiring of persons outside of the immediate household, so long as the tenant himself had control in the farmwork, was not essentially opposed to the status of tenancy.

Thirdly, the management of the farm was left entirely to private respondent who defrayed the cultivation expenses.

Fourthly, private respondent shared the harvest of the land, depositing or delivering to petitioner Enrique Suplico the agreed 62 cavans of palay per crop yield. Jesus Mesias, the licensed ricemiller of Taloc, attested to Suplico's having received from private respondent the cash value of the rental payments from "the first crop of 1979 and each crop thereafter up to the first crop of 1983, inclusive." The rental payments made thereafter were received by petitioner Lolita Suplico, court appointed police officers, or the barangay captain.

Petition for review on certiorari is DENIED.

Monsanto vs. Zerna (tenancy rel established) Sc: there is agrarian dspute

Bejasa, et al. vs. CA, et al., G.R. No. 108941, July 6, 2000 (tenancy not established)

Fact:

This case involves two (2) parcels of land covered by TCT No. T-581917 [Exhibit "16", Regional Trial Court Record.] and TCT No. T-59172,8 [Exhibit "17", Regional Trial Court Record.] measuring 16 hectares and 6 hectares more or less, situated in Barangay Del Pilar, Naujan, Oriental Mindoro. The parcels of land are indisputably owned by Isabel Candelaria.

On October 20, 1974, Candelaria entered into a three-year lease agreement over the land with Pio Malabanan (hereinafter referred to as "Malabanan"). In the contract, Malabanan agreed among other things: "to clear, clean and cultivate the land, to purchase or procure calamansi, citrus and rambutan seeds or seedlings, to attend and care for whatever plants are thereon existing, to make the necessary harvest of fruits, etc."

Sometime in 1973, Malabanan hired the Bejasas to plant on the land and to clear it. The Bejasas claim that they planted citrus, calamansi, rambutan and banana trees on the land and shouldered all expenses of production.

On May 3, 1977, Candelaria gave Malabanan a six-year usufruct over the land, modifying their first agreement. As per the agreement, Malabanan was under no obligation to share the harvests with Candelaria. Sometime in 1983, Malabanan died.

On September 21, 1984, Candelaria constituted respondent Jaime Dinglasan (hereinafter referred to as "Jaime) as her attorney-in-fact, having powers of administration over the disputed land.

On October 26, 1984, Candelaria entered into a new lease contract over the land with Victoria Dinglasan, Jaime’s wife (hereinafter referred to as "Victoria"). The contract had a term of one year.

On December 30, 1984, the Bejasas agreed to pay Victoria rent of P15,000.00 in consideration of an "aryenduhan" or "pakyaw na bunga"13 [Under this system, for a stipulated consideration, the lessee acquires the right over any fruits produced and harvested from the land, using any system of production he sees fit agreement, with a term of one year.

During the first week of December 1984, the Bejasas paid Victoria P7,000.00 as agreed. The balance of P8,000.00 was not fully paid. Only the amount of P4,000.00 was paid on January 11, 1985.

After the aryenduhan expired, despite Victoria’s demand to vacate the land, the Bejasas continued to stay on the land and did not give any consideration for its use, be it in the form of rent or a shared harvest.

On April 7, 1987, Candelaria and the Dinglasans again entered into a three-year lease agreement over the land.17 [Exhibit "8", Regional Trial Court Record.] The special power of attorney in favor of Jaime was also renewed by Candelaria on the same date.18 [Exhibit "9", Regional Trial Court Record.]

On April 30, 1987, Jaime filed a complaint before the Commission on the Settlement of Land Problems ("COSLAP"), Calapan, Oriental Mindoro seeking ejectment of the Bejasas. On May 26, 1987, COSLAP dismissed the complaint.

Sometime in June 1987, Jaime filed a complaint with the Regional Trial Court, Calapan Oriental, Mindoro19 [Docketed as Civil Case No. R-3826.] against the Bejasas for "Recovery of possession with preliminary mandatory injunction and damages." The case was referred to the Department of Agrarian Reform ("DAR").

On December 28, 1987, the DAR certified that the case was not proper for trial before the civil courts.20

The trial court dismissed Jaime’s complaint, including the Bejasas’ counterclaim for leasehold, home lot and damages.

On February 15, 1988, the Bejasas filed with the Regional Trial Court of Calapan, Oriental Mindoro a complaint for "confirmation of leasehold and home lot with recovery of damages."21 [Docketed as Civil Case No. R-3868.] against Isabel Candelaria and Jaime Dinglasan.

On February 20, 1991, after trial, the trial court ruled in favor of the Bejasas.

Respondents filed their notice of appeal, the Court of Appeals promulgated a decision reversing the trial court’s ruling.

Issue:

Whether there is a tenancy relationship in favor of the Bejasas.

Ruling:

The elements of a tenancy relationship are:

(1) the parties are the landowner and the tenant;

(2) the subject is agricultural land;

(3) there is consent;

(4) the purpose is agricultural production;

(5) there is personal cultivation; and

(6) there is sharing of harvests.

There is no tenancy relationship between the parties.

True, Malabanan (as Candelaria’s usufructuary) allowed the Bejasas to stay on and cultivate the land. However, even if we assume that he had the authority to give consent to the creation of a tenancy relation, still, no such relation existed. There was no proof that they shared the harvests.

Reynaldo Bejasa testified that as consideration for the possession of the land, he agreed to deliver the landowner’s share (1/5 of the harvest) to Malabanan. Only Reynaldo Bejasa’s word was presented to prove this. Even this is cast into suspicion. At one time Reynaldo categorically stated that 25% of the harvest went to him, that 25% was for Malabanan and 50% went to the landowner, Candelaria. Later on he stated that the landowner’s share was merely one fifth. [Reynaldo attributes his "mistake" to the fact that during his testimony under oath "he was not feeling well" and answered all the questions in order to be "discharged immediately from the witness stand. Candelaria and the Bejasas. Between them, there is no tenancy relationship. Candelaria as landowner never gave her consent.

The Bejasas admit that prior to 1984, they had no contact with Candelaria. They acknowledge that Candelaria could argue that she did not know of Malabanan’s arrangement with them. True enough Candelaria disavowed any knowledge that the Bejasas during Malabanan’s lease possessed the land. However, the Bejasas claim that this defect was cured when Candelaria agreed to lease the land to the Bejasas for P20,000.00 per annum, when Malabanan died in 1983. We do not agree. In a tenancy agreement, consideration should be in the form of harvest sharing. Even assuming that Candelaria agreed to lease it out to the Bejasas for P20,000 per year, such agreement did not create a tenancy relationship, but a mere civil law lease.

Dinglasan and the Bejasas. Even assuming that the Dinglasans had the authority as civil law lessees of the land to bind it in a tenancy agreement, there is no proof that they did.

Again, there was no agreement as to harvest sharing. The only agreement between them is the "aryenduhan" which states in no uncertain terms the monetary consideration to be paid, and the term of the contract.

Not all the elements of tenancy being met, we deny the petition.

WHEREFORE, we AFFIRM the decision of the Court of Appeals.

Valencia vs. CA et al., G.R. No. 122363, April 29, 2003 (tenancy not established)

Fact:

On 7 May 1957 Victor G. Valencia acquired the first parcel covered by TCT No. H-T-137 from a certain Bonifacio Supnet. On 22 October 1962 Valencia entered into a ten (10)-year civil law lease agreement over his two (2) parcels of land with a certain Glicerio Henson. Before the ten (10)-year lease expired, apparently without objection from Henson, Valencia leased the property for five (5) years to Fr. Andres Flores under a civil law lease concept beginning 21 August 1970 or until 30 June 1975

During the lease of Fr. Andres Flores, he designated Francisco Obang (as overseer), Rogelio Tamayo, Federico Jare, Feliciano Lobresco, Melchor Moncada, Rosendo Lobresco, Victoriano Montefalcon, Santos Gargaya, Catalino Mantac, Herodita Semillano, Ernesto Lobresco, Natividad Lobresco and Alfredo Demerin, along with Crescenciano and Marciano Frias, to cultivate the land. These farmhands shared their produce with Fr. Flores. Subsequently, Francisco Obang, Santos Gargaya, Crescenciano Frias, Federico Jare, Rosendo Lobresco, Juliano Magdayao, Ernesto Lobresco, Feliciano Lobresco, Catalino Mantac, Victoriano Montefalcon, Ambrosio Semillano, Rogelio Tamayo and Edilberto Lobresco, became recipients of CLTs and are collectively referred to herein as private respondents.

When the lease agreement between Valencia and Fr. Flores expired on 30 June 1975, Valencia demanded that private respondents vacate the premises. Instead of complying with the demand, they refused and continued cultivating the land despite the demand for them to vacate.

In his initial step in his long and agonizing journey, Valencia filed a letter of protest with the Minister of Agrarian Reform to take back the actual possession of his property that was subject of the civil law lease agreement. On 20 March 1976 his letter was referred to the DAR Regional Office in Cebu City. On 24 August 1989 the DAR Regional Office in Cebu City, notwithstanding the Investigation Report and Recommendations of its DAR Team Office, dismissed Valencia's protest.

This setback of Valencia prompted him to appeal to the Office of the President, on 8 October 1993 Executive Secretary Teofisto Guingona, Jr., by authority of the President, affirmed the order of the DAR. Valencia then brought his case to the Court of Appeals. The Court of Appeals dismissed the case on a technical ground, i.e., that his appeal was filed out of time. Valencia filed this Petition for Review on Certiorari under Rule 45 of the Rules of Court to the SC seeking to reverse and set aside the Decision of the Court of Appeals.

Issue:

WON a civil law lessee of a landholding is automatically authorized to install a tenant thereon.

Ruling:

Contrary to the impression of private respondents, Sec. 6 of R. A. No. 3844, as amended, does not automatically authorize a civil law lessee to employ a tenant without the consent of the landowner. The lessee must be so specifically authorized. For the right to hire a tenant is basically a personal right of a landowner, except as may be provided by law. But certainly nowhere in Sec. 6 does it say that a civil law lessee of a landholding is automatically authorized to install a tenant thereon. A different interpretation would create a perverse and absurd situation where a person who wants to be a tenant, and taking advantage of this perceived ambiguity in the law, asks a third person to become a civil law lessee of the landowner. Incredibly, this tenant would technically have a better right over the property than the landowner himself. This tenant would then gain security of tenure, and eventually become owner of the land by operation of law. This is most unfair to the hapless and unsuspecting landowner who entered into a civil law lease agreement in good faith only to realize later on that he can no longer regain possession of his property due to the installation of a tenant by the civil law lessee.

On the other hand, under the express provision of Art. 1649 of the Civil Code, the lessee cannot assign the lease without the consent of the lessor, unless there is a stipulation to the contrary. In the case before us, not only is there no stipulation to the contrary; the lessee is expressly prohibited from subleasing or encumbering the land, which includes installing a leasehold tenant thereon since the right to do so is an attribute of ownership. Plainly stated therefore, a contract of civil law lease can prohibit a civil law lessee from employing a tenant on the land subject matter of the lease agreement. An extensive and correct discussion of the statutory interpretation of Sec. 6 of R. A. No. 3844, as amended, is provided by the minority view in Bernas v. Court of Appeals.

When Sec. 6 provides that the agricultural leasehold relations shall be limited to the person who furnishes the landholding, either as owner, civil law lessee, usufructuary, or legal possessor, and the person who personally cultivates the same, it assumes that there is already an existing agricultural leasehold relation, i.e., a tenant or agricultural lessee already works the land. The epigraph of Sec. 6 merely states who are "Parties to Agricultural Leasehold Relations," which assumes that there is already a leasehold tenant on the land; not until then. This is precisely what we are still asked to determine in the instant proceedings.

In the present case, the Decision of the Secretary of Agrarian Reform, as modified by the Office of the President through the Executive Secretary, held that private respondents were deemed leasehold tenants. They anchored their proposition on Sec. 6 of R. A. No. 3844, as amended, otherwise known as The Agricultural Land Reform Code, which states that since the civil law lessees had a valid contract with Valencia, the sublessees were automatically deemed his tenants by operation of law.

This conclusion espoused by the Secretary of Agrarian Reform is arbitrary and unfounded. The following essential requisites must concur in order to establish a tenancy relationship: (a) the parties being landowner and tenant; (b) the subject matter is agricultural land; (c) there is consent by the landowner; (d) the purpose is agricultural production; (e) there is personal cultivation by the tenant; and, (f) there is sharing of harvests between the parties. An allegation that an agricultural tenant tilled the land in question does not make the case an agrarian dispute.] Claims that one is a tenant do not automatically give rise to security of tenure. The elements of tenancy must first be proved in order to entitle the claimant to security of tenure.

A tenancy relationship cannot be presumed. There must be evidence to prove this allegation. Hence, a perusal of the records and documents is in order to determine whether there is substantial evidence to prove the allegation that a tenancy relationship does exist between petitioner and private respondents.

The principal factor in determining whether a tenancy relationship exists is intent. Tenancy is not a purely factual relationship dependent on what the alleged tenant does upon the land. It is also a legal relationship. The intent of the parties, the understanding when the farmer is installed, and their written agreements, provided these are complied with and are not contrary to law, are even more important.

With respect to the retention limits of land ownership by Valencia and his "direct descendants," the Comprehensive Agrarian Reform Law allows landowners whose lands have been covered by Pres. Decree No. 27 to keep the area originally retained by them provided the original homestead grantees who still own the original homestead at the time of the approval of Rep. Act No. 6657 shall retain the same areas as long as they continue to cultivate the homestead. The right to choose the area to be retained, which shall be compact or contiguous, shall pertain to the landowner, as a general rule. However, the factual determination of whether Valencia and his "direct descendants" have complied with Sec. 6 of Rep. Act No. 6657 should be addressed by the Department of Agrarian Reform. Ascertaining if petitioner and his "direct descendants" are within the seven (7)-hectare retention limit provided by Pres. Decree No. 27 requires the technical expertise of the administrative agency concerned.

The petition is GRANTED.

Almuete et al., vs. CA, et al., G.R. No. 122276, November 20, 2001 (about on ownership)

Fact:

The subject of this controversy is a parcel of agricultural land identified as Lot 8449 Pls-967, located at San Vicente, Angadanan, Isabela, measuring approximately 72,587 square meters. Way back on March 25, 1957, this parcel was awarded by the then National Resettlement and Rehabilitation Administration (NARRA) to petitioner Rodrigo Almuete. Since then, Rodrigo Almuete exercised exclusive possession of the property, cultivating it and planting thereon narra, fruit trees, rice, corn and legumes. For some twenty-two (22) years, Rodrigo Almuete and his family farmed the subject property peacefully and exclusively.

However, unknown to Rodrigo Almuete, on August 17, 1979, an Agrarian Reform Technologist by the name of Leticia Gragasin filed a field investigation and inspection report stating, among others, that the whereabouts of the original awardee of the subject property, Rodrigo Almuete, was unknown and that he had “waived all his rights as a NARRA settler due to his poor health beyond his control and financial hardship.” Gragasin also stated therein that “the actual occupant of the land is Marcelo Andres since April 1967 to date.” She recommended to the Director of the Ministry of Agrarian Reform (MAR) in Tuguegarao, Cagayan that the award in favor of Rodrigo Almuete be cancelled and that the land be awarded to respondent Marcelo Andres. Consequently, Marcelo Andres was allowed to file his homestead application.

On the strength of the MAR Regional Director’s recommendation and Marcelo Andres’ representations, the latter was granted and issued a homestead patent.

Shortly thereafter, Marcelo Andres, accompanied by ten (10) other persons armed with bolos and other bladed implements, entered the subject property, claiming exclusive right of ownership and possession. Rodrigo Almuete wasted no time in complaining to the DAR authorities of Marcelo Andres’ encroachment into and occupation of the subject property. It was only then that he learned that the subject property had been titled in the name of Marcelo Andres and that the award in his favor had been cancelled because he had allegedly abandoned the subject property. Rodrigo Almuete and his daughter, Ana

Almuete, filed an action for reconveyance and recovery of possession against Marcelo Andres with the Regional Trial Court of Cauayan, Isabela which rendered decision in favor of the plaintiffs and against the defendant Marcelo Andres.

Marcelo Andres filed a petition for certiorari before the Court of Appeals which granted the petition. Petitioner file a petition to the SC.

Issue:

WON this case is an “Agrarian Dispute,” and if not, it does not fall within the exclusive jurisdiction of the Department of Agrarian Reform Adjudication Board, but to the Regional Trial Court.

Ruling:

“Rule II, Section 1 of the Revised Rules of Procedure of the DARAB, provides Section 1. Primary, Original and Appellate Jurisdiction. --- The Agrarian Reform Adjudication Board shall have primary jurisdiction, both original and appellate, to determine and adjudicate all agrarian disputes, cases, controversies, and matters or incidents involving the implementation of the Comprehensive Agrarian Reform Program under Republic Act No. 6657, Executive Order Nos. 229, 228 and 129-A, Republic Act No. 3844 as amended by Republic Act No. 6389, P.D. No. 27 and other agrarian laws and their implementing rules and regulations.

“Agrarian dispute” is defined under Section 3(d) of Republic Act No. 6657, as:

(d) Agrarian Dispute refers to any controversy relating to tenurial arrangements, whether leasehold, tenancy, stewardship or otherwise, over lands devoted to agriculture, including disputes concerning farmworkers associations or representation of persons in negotiating, fixing, maintaining, changing or seeking to arrange terms or conditions of such tenurial arrangements.

It includes any controversy relating to compensation of lands acquired under this Act and other terms and conditions of transfer of ownership from landowners to farmworkers, tenants and other agrarian reform beneficiaries, whether the disputants stand in the proximate relation of farm operator and beneficiary, landowner and tenant, or lessor and lessee.”

From the foregoing, it is clear that the jurisdiction of the DARAB is limited to cases involving a tenancy relationship between the parties. The following elements are indispensable to establish a tenancy relationship:

(1) The parties are the landowner and the tenant or agricultural lessee;

(2) The subject matter of the relationship is an agricultural land;

(3) There is consent between the parties to the relationship;

(4) The purpose of the relationship is to bring about agricultural production;

(5) There is personal cultivation on the part of the tenant or agricultural lessee; and

(6) The harvest is shared between the landowner and the tenant or agricultural lessee.

The Court of Appeals, therefore, gravely erred when it granted the petition for certiorari and held that the trial court had no jurisdiction over the subject matter of the action between petitioners and respondent. The action filed by petitioners was cognizable by the regular courts. Consequently, the Regional Trial Court of Cauayan, Isabela was competent to try and decide Civil Case No. 20-530. Its decision was, thus, valid and can no longer be disturbed, after having attained finality. Nothing more can be done with the decision except to enforce it.

Monsanto vs. Zerna, 371 SCRA 664

Facts:

Spouses Jesus and Teresita Zerna (herein private respondents) were charged with qualified theft in Criminal Case No. 5896, filed before the Regional Trial Court (RTC) of Lanao del Norte, Branch 6. This case was later re-raffled and transferred to Branch 4 of the same judicial region. The Information against private respondents was amended on June 8, 1995. It is reproduced hereunder:

"That on or about February 25, 1995, the said accused, conspiring and confederating together and mutually helping each other, being then the overseers of some banana plants on the land owned by one Leonarda Monsanto and principally devoted to coconut trees, and having access to said land as such, with grave abuse of confidence reposed [i]n them by the said owner, with intent to gain, did then and there willfully, unlawfully and feloniously take, steal, harvest and carry away coconuts from the premises of the said plantation, which the said accused then processed into copra

After trial on the merits, the RTC acquitted them of the charge. Respondent appeal to theca which set aside and declared null and void" the September 6, 1996 RTC Order.

Then this petition to the SC.

Issue:

WON the Regional Trial Court automatically divested of jurisdiction over a criminal case where an agrarian issue is argued as a defense, no matter how flimsy.

Held:

The resolution of the issue of who is entitled to the P1,100 falls squarely within the jurisdiction of the DARAB. EO 22918 vested the Department of Agrarian Reform (DAR) with quasi-judicial powers to determine and adjudicate agrarian reform matters, as well as to exercise exclusive original jurisdiction over all matters involving the implementation of agrarian reform, except those falling under the exclusive original jurisdiction of the Department of Environment and Natural Resources (DENR) and the Department of Agriculture (DA).

After a careful review of the records of this case, we hold that an agrarian dispute existed between the parties.

First, the subject of the dispute between them was the taking of coconuts from the property owned by petitioner.

Second, private respondents were the overseers of the property at the time of the taking of the coconuts.

Third, petitioner allowed private respondents to plant coconut, coffee, jackfruit and cacao as shown by the said Agreement.

Finally, a tenurial arrangement exists among herein parties as regards the harvesting of the agricultural products, as shown by the several remittances made by private respondents to petitioner. These are substantiated by receipts.24

A tenancy relationship may be established either verbally or in writing, expressly or impliedly.25 In the present case, undisputed by petitioner is the existence of the Kasabutan, which contradicts her contention that private respondents were mere overseers. In any event, their "being overseers does not foreclose their being also tenants," as held in Rupa v. Court of Appeals.26 Evidently, the resolution of the agrarian dispute between the parties is a matter beyond the legal competence of regular courts.

To repeat, petitioner is claiming the questioned amount of P1,100 as the balance of the proceeds from the copra sale, which the RTC awarded her. Private respondents contend that this P1,100 is their compensation, pursuant to their tenurial arrangement with her. Since this amount is inextricably intertwined with the resolution of the agrarian dispute between them, we believe that the Court of Appeals did not commit any reversible error in holding that it was DARAB that had jurisdiction to pass upon this civil matter.

Pasong Bayabas Farmers Association, Inc. vs. CA, G.R. No. 142359, May 25, 2004 (tenancy not established)

Facts:

Sometime in 1964, Lakeview Development Corporation (LDC, for brevity) bought a parcel of land with an area of 753,610 square meters (75.3610 hectares) located at Barrio Kabilang-Baybay, Carmona, Cavite. Meanwhile, the LDC/CAI undertook to develop its 75-hectare property into a residential and industrial estate, where industrial sites and a low cost housing project inceptually called the Tamanli Housing Project would be established. The CAI embarked on the development of the housing project into three phases: First Phase, the Hakone Subdivision; Second Phase, the Sunshine Village & Casa de Monteverde; and, Third Phase, the Mandarin Homes.

The PBFAI-KASAMA, representing the farmers-tenants, filed a complaint for Maintenance of Peaceful Possession and Cultivation with Damages with Prayer for the Issuance of a Temporary Restraining Order and Preliminary Injunction before the Department of Agrarian Reform Adjudication Board (DARAB), Region IV, Trece Martirez City, Cavite, against the CAI. TRO have been granted but was lifted upon appeal by CAI to the PARAD.Aggrieved, the plaintiffs interposed an appeal to the Department of Agrarian Reform Adjudication Board. The DARAB rendered a Decision on September 2, 1997 reversing the decision of PARAD.

Aggrieved, the CAI filed a petition for review in the Court of Appeals, CA ruled that the DARAB erred in ruling that the land in suit was still covered by Rep. Act No. 6657. Consequently, since the subject land is not agricultural and not covered by the CARL, the PBFAI members could not be considered tillers/beneficiaries thereof.

Aggrieved, the PBFAI filed a petition for review under Rule 45 of the Rules of Court to the SC.

Issue:

Whether the property subject of the suit is covered by Rep. Act No. 6657, the Agrarian Reform Law (CARL).

Ruling:

The contention of the petitioners has no merit. Under Section 3(c) of Rep. Act No. 6657, agricultural lands refer to lands devoted to agriculture as conferred in the said law and not classified as industrial land. Agricultural lands are only those lands which are arable or suitable lands that do not include commercial, industrial and residential lands] Section 4(e) of the law provides that it covers all private lands devoted to or suitable for agriculture regardless of the agricultural products raised or that can be raised thereon.

Indeed, lands not devoted to agricultural activity are outside the coverage of CARL. These include lands previously converted to non-agricultural uses prior to the effectivity of CARL by government agencies other than respondent DAR. In its Revised Rules and Regulations Governing Conversion of Private Agricultural Lands to Non-Agricultural Uses, DAR itself defined "agricultural land" thus "

x x x Agricultural land refers to those devoted to agricultural activity as defined in R.A. 6657 and not classified as mineral or forest by the Department of Environment and Natural Resources (DENR) and its predecessor agencies, and not classified in town plans and zoning ordinances as approved by the Housing and Land Use Regulatory Board (HLURB) and its preceding competent authorities prior to 15 June 1988 for residential, commercial or industrial use.

In Monsanto v. Zerna, we held that for the DARAB to have jurisdiction over a case, there must exist a tenancy relationship between the parties. In order for a tenancy agreement to take hold over a dispute, it is essential to establish all the indispensable elements, to wit:

(1) The parties are the landowner and the tenant or agricultural lessee;

(2) The subject matter of the relationship is an agricultural land;

(3) There is consent between the parties to the relationship;

(4) The purpose of the relationship is to bring about agricultural production;

(5) There is personal cultivation on the part of the tenant or agricultural lessee; and

(6) The harvest is shared between the landowner and the tenant or agricultural lessee.

Moreover, their waiver of rights constitutes abandonment of their rights of possession and cultivation which may yet be borne out of a legitimate tenancy relationship. Their re-entry or continuous possession and cultivation of the land in question without the landowner’s knowledge and/or consent negates the existence of tenancy relationship. Since security of tenure is a right to which only a bona fide tenant farmer is entitled their lack of such tenurial status denies them of its exercise and enjoyment.

The petitions are DENIED.

Escariz vs. Revilleza, G.R. No. 155544, August 24, 2007 (tenancy not established)

Facts:

This controversy involves a fruit orchard situated in San Isidro, Calauan, Laguna. Genaro D. Revilleza, respondent herein, is a retired employee of the University of the Philippines in Los Baos, Laguna. With his retirement money, he bought the orchard from Jose Velasco. On December 17, 1993, Marino Escariz, petitioner, filed with the Office of the Regional Agrarian Reform Adjudicator, Region IV a complaint for Recognition of Security of Tenure with Damages and Prayer for Accounting and Depositing of Tenants Share Pending Litigation against respondent. Petitioner alleged that he has been a long time tenant on the property, planting and tending rambutan and citrus trees thereon; that he shared the harvests with respondent on a 9:10 basis; and that respondent asked him to vacate the property after he demanded his share from the harvests. He then prayed that he be recognized as a tenant and be awarded damages.

 In his answer, respondent denied any tenancy relationship with petitioner, claiming that the latter is actually a tenant of the owner of a neighboring riceland. He would occasionally hire petitioner to work on his orchard on a piecework basis. Petitioner illegally entered the property by erecting a shack where he lives. Respondent then prayed for the dismissal of the complaint.

Issue:

Whether or not there is tenancy relationship.

Held:

There is NO tenancy relationship.

A tenancy relationship cannot be presumed. There must be evidence to support and prove the allegation that a tenancy relationship exists between petitioner and respondent. In Pasong Bayabas Farmers Association, Inc. v. Court of Appeals, we held that the elements of a tenancy relationship are:  

(1)   The parties are the landowner and the tenant or agricultural lessee;(2)   The subject matter of the relationship is an agricultural land;(3)   There is consent between the parties to the relationship;(4)   The purpose of the relationship is to bring about agricultural production;(5)   There is personal cultivation on the part of the tenant or agricultural lessee; and(6)   The harvest is shared between the landowner and the tenant or agricultural lessee.

In Caballes v. Department of Agrarian Reform, we ruled that all the above elements must concur for a tenancy relationship to exist. Differently stated, the absence of a single requisite does not make an occupant or a cultivator of an agricultural land a de jure tenant. Absent such status as a de jure tenant, a person is neither entitled to security of tenure nor to coverage under the agrarian reform programs of the government. 

In the present case, we agree with the Court of Appeals that there is no evidence on record to prove the existence of the following elements: (a) the consent of the parties and (b) the sharing of harvests.  

It bears emphasis that tenancy is a legal relationship. The principal factor in determining its existence is the intent of the parties. Courts give prime importance to the intent of the parties, the understanding when the tenant is installed and the written agreements of the parties. Here, other than the self-serving statement of petitioner that he is a tenant, there is no concrete evidence to show that the parties agreed to establish such a relationship.  

Anent the sharing of harvests, again there is no evidence to prove this element. In Bejasa v. Court of Appeals, we laid the rule that to prove sharing of harvests, a receipt or any other similar evidence must be presented, self-serving statements are inadequate.  cralawWHEREFORE, we DENY the petition and AFFIRM the challenged Decision of the Court of Appeals

Heirs of Nicolas Jugalbot vs. CA, G.R. No. 170346, March 12, 2007

Facts:

On September 28, 1997, an Emancipation Patent (EP) was issued to Nicolas Jugalbot based on the latter’s claim that he was the tenant of Lot 2180-C of the Subdivision plan, subject property of the case at bar, with an area of 6,229 square meters, located at Barangay Lapasan, Cagayan de Oro City. The subject property was registered in the name of Virginia A. Roa under Transfer Certificate of Title , the same being issued on April 1, 1970 in the name of “Virginia A. Roa married to Pedro N. Roa.” The property was originally registered in the name of Marcelino Cabili from whom Virginia A. Roa purchased the same sometime in 1966.

Nicolas Jugalbot alleged that he was a tenant of the property continuously since the 1950s. On a Certification dated January 8, 1988 and issued by Department of Agrarian Reform (DAR) Team Leader Eduardo Maandig, the subject property was declared to be tenanted as of October 21, 1972 and primarily devoted to rice and corn. On March 1, 1988, the Emancipation Patent was registered with the Register of Deeds and Nicolas Jugalbot was issued TCT No. E-103.

On August 10, 1998, the heirs of Virginia A. Roa, herein private respondents, filed before the DARAB Provincial Office of Misamis Oriental a Complaint for Cancellation of Title Recovery of Possession and Damages against Nicolas Jugalbot. The

DARAB Provincial Adjudicator dismissing private respondents’ complaint and upholding the validity of the Emancipation Patent. On appeal, the DARAB Central Office affirmed the Provincial Adjudicator’s decision. They filed a petition for review before the Court of Appeals which was granted. Then this petition to the SC.

Issue:

whether a tenancy relationship exists between petitioners Heirs of Nicolas Jugalbot, and private respondents.

Ruling:

As clearly laid down in Qua v. Court of Appeals and subsequently in Benavidez v. Court of Appeals, the doctrine is

well-settled that the allegation that an agricultural tenant tilled the land in question does not automatically make the case an agrarian dispute. It is necessary to first establish the existence of a tenancy relationship between the party litigants. The following essential requisites must concur in order to establish a tenancy relationship: (a) the parties are the landowner and the tenant; (b) the subject matter is agricultural land; (c) there is consent; (d) the purpose is agricultural production; (e) there is personal cultivation by the tenant; and (f) there is a sharing of harvests between the parties.

Valencia v. Court of Appeals further affirms the doctrine that a tenancy relationship cannot be presumed. Claims that one is a tenant do not automatically give rise to security of tenure. The elements of tenancy must first be proved in order to entitle the claimant to security of tenure. There must be evidence to prove the allegation that an agricultural tenant tilled the land in question. Hence, a perusal of the records and documents is in order to determine whether there is substantial evidence to prove the allegation that a tenancy relationship does exist between petitioner and private respondents. The principal factor in determining whether a tenancy relationship exists is intent.

Tenancy is not a purely factual relationship dependent on what the alleged tenant does upon the land. It is also a legal relationship, as ruled in Isidro v. Court of Appeals. The intent of the parties, the understanding when the farmer is installed, and their written agreements, provided these are complied with and are not contrary to law, are even more important.In Caballes v. Department of Agrarian Reform, we restated the well-settled rule that all the requisites must concur in order to create a tenancy relationship between the parties and the absence of one or more requisites does not make the alleged tenant a de facto tenant as contradistinguished from a de jure tenant. This is so because unless a person has established his status as a de jure tenant he is not entitled to security of tenure nor is he covered by the Land Reform Program of the Government under existing tenancy laws. The security of tenure guaranteed by our tenancy laws may be invoked only by tenants de jure, not by those who are not true and lawful tenants.

In Gonzales v. Court of Appeals,[43] we held that an agricultural leasehold cannot be established on land which has ceased to be devoted to cultivation or farming because of its conversion into a residential subdivision. Petitioners were not agricultural lessees or tenants of the land before its conversion into a residential subdivision in 1955. Not having been dispossessed by the conversion of the land into a residential subdivision, they may not claim a right to reinstatement.The petition is DENIED.

B. Chapter II (Coverage)

SEC. 4. Scope. - The Comprehensive Agrarian Reform Law of 1988 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 to 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; andchan robles virtual law library d) All private lands devoted to or suitable for agriculture regardless of the agricultural products raised or that can be raised thereon.

SEC. 5. Schedule of Implementation. - The distribution of all lands covered by this Act shall be implemented immediately and completed within ten (10) years from the effectivity thereof.

SEC. 6. Retention Limits. - Except as otherwise provided in this Act, no person may own or retain, directly, any public or private agricultural land, the size of which shall vary according to factors governing a viable family-sized farm, such as commodity produced, terrain, infrastructure, and soil fertility as determined by the Presidential Agrarian Reform Council (PARC) created hereunder, but in no case shall the retention by the landowner exceed five (5) hectares. Three (3) hectares may be awarded to each child of the landowner, subject to the following qualifications: (1) that he is at least fifteen (15) years of age; and (2) that he is actually tilling the land or directly managing the farm: Provided, That landowners whose lands have been covered by Presidential Decree No. 27 shall be allowed to keep the area originally retained by them thereunder; Provided, further, That original homestead grantees or direct compulsory heirs who still own the original homestead at the time of the approval of this Act shall retain the same areas as long as they continue to cultivate said homestead.

The right to choose the area to be retained, which shall be compact or contiguous, shall pertain, to the landowner: Provided, however, That in case the area selected for retention by the landowner is tenanted, the tenant shall have the option to choose whether to remain therein or be a beneficiary in the same or another agricultural land with similar or comparable features. In case the tenant chooses to remain in the retained area, he shall be considered a leaseholder and shall lose his right to be a beneficiary under this Act.  In case the tenant chooses to be a beneficiary in another agricultural land, he loses his right as a 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.

In all cases, the security of tenure of the farmers or farm workers on the land prior to the approval of this Act shall be respected.

Upon the effectivity of this Act, any sale, disposition, lease, management contract or transfer of possession of private lands executed by the original landowner in violation of this Act shall be null and void: Provided, however, That those executed prior to this Act shall be valid only when registered with the Register of Deeds within a period of three (3) months after the effectivity of this Act . Thereafter, all Registers of Deeds shall inform the DAR within thirty (30) days of any transaction involving agricultural lands in excess of five (5) hectares.

Homestead Grantees (Section 6)

Alita vs. CA, 170 SCRA 706

Facts:

Two parcels of land in Tungawan, Zamboanga del Norte wer acquired by private respondents’ predecessors-in-interest through homestead patent under the provisions C.A. No. 141.

Private respondents/owners Enrique Reyes, et al. herein are desirous of personally cultivating these lands, but petitioners/tenants Gabino Alita refuse to vacate, relying n the provisions of PD 27 and PD 316 and appurtenant regulations issued by the Ministry of Agrarian Reform.

Held:

We agree with the petitioners in saying that PD 27 decreeing the emancipation of tenants from the bondage of the soil and transferring to them ownership of the land they till is a sweeping social legislation, a remedial measure promulgated pursuant to the social justice precepts of the Constitution. However, such contention cannot be invoked to defeat the very purpose of the enactment of the Public Land Act or CA No. 141. Thus,

“The Homestead Act has been enacted for the welfare and protection of the poor. The law gives a needy citizen a piece of land where he may build a modest house for himself and family and plant what is necessary for subsistence and for the satisfaction of life’s other needs.xxx”

Both the Philippine constitution and the CARL respect the superiority of the homesteaders right over the right of the tenants guaranteed by the Agrarian Reform Statute.

In this regard, the Philippine Constitution likewise respects the superiority of the homesteaders' rights over the rights of the tenants guaranteed by the Agrarian Reform statute. In point is Section 6 of Article XIII of the 1987 Philippine Constitution which provides:

“The State shall apply the principles of agrarian reform or stewardship, whenever applicable in accordance with law, in the disposition or utilization of other natural resources, including lands of public domain under lease or concession suitable to agriculture, subject to prior rights, homestead rights of small settlers, and the rights of indigenous communities to their ancestral lands.”

Additionally, it is worthy of note that the newly promulgated Comprehensive Agrarian Reform Law of 1988 or Republic Act No. 6657 likewise contains a proviso supporting the inapplicability of P.D. 27 to lands covered by homestead patents like those of the property in question, reading,

Section 6. Retention Limits. “xxxx... Provided further, That original homestead grantees or their direct compulsory heirs who still own the original homestead at the time of the approval of this Act shall retain the same areas as long as they continue to cultivate said homestead.”

Paris vs. Alfeche, 364 SCRA 110

Facts:

Petitioner Florencia Paris is the owner of 10.6146 hectare of land in Paitan,Bukidnon. The said parcels are fully tenanted by private respondents Dionisio Alfeche, et al. who are recipients of Emancipation Patents in their names pursuant to Operation Land Transfer (OLT) under PD 27 notwitstanding the fact that neither the tenants nor the Land Bank [has] paid a single centavo for the said land.

Petitioner contends that since she is entitled to a retention of 7 hectares under PD 27 and/or 5 hectares and 3 hectares each for her children under CARL., the tenants are not supposed to acquire the subject land and the Emancipation Patents precipitately issued to them are null and void for being contrary to law. Petitioner further alleged that she owns the subject property as original homestead grantee who still owned the same when RA 6657 was approved, thus she is entitled to retain the area to the exclusion of her tenants.

As regards to the land, petitioner has applied for retention of 7 hectares contending that the lands subject of the instant petition are covered by Homestead Patents, and as decided by the Supreme Court in Patricio vs. Bayug and Alita vs. CA, the homesteaders and their heirs have the right to cultivate their homesteads personally, which is a superior right over that of tenant-farmers.

Held:

Petitioner’s contention is without legal basis. PD 27, under which the EP sought to be canceled here were issued to respondents, applies to all tenanted private agricultural lands primarily devoted to rice and corn under a system of share-crop or lease-tenancy, whether classified as landed estate or not. The law makes no exceptions whatsoever in its coverage. Nowhere therein does it appear that the lots obtained by homestead patents are exempt from it operation.

Petitioner’s claimed entitlement to retain 7 hectares is also untenable. PD 27, which provides the retention limit, states:

“In all cases, the landowner may retain an area of not more than 7 hectares if such landowner is cultivating such area or will now cultivate it.”

Clearly, the right to retain an area of 7 hectares is not absolute. It is premised on the condition that the landowner is cultivating the area sought to be retained or will actually cultivate it upon effectivity of the law.

In the case at bar, neither of the conditions for retention is present. As admitted by petitioner herself, the subject parcels are fully tenanted; thus, she is clearly not cultivating them, not will she personally cultivate any part thereof. Undoubtedly, therefore, she has no right to retain any portion of her landholdings.

Even under the current primary law on agrarian reform, Republic Act (RA) No. 6657, to which the application of PD 27 is suppletory, petitioner's lands are subject to land reform. The said Act lays down the rights of homestead grantees under Sec. 6 thereof.

Indisputably, homestead grantees or their direct compulsory heirs can own and retain the original homesteads, only for "as long as they continue to cultivate" them. That parcels of land are covered by homestead patents will not automatically exempt them from the operation of land reform. It is the fact of continued cultivation by the original grantees or their direct compulsory heirs that shall exempt their lands from land reform coverage.

Neither petitioner nor her heirs are personally cultivating the subject homesteads. The DAR and the CA found that respondents were the ones who had been cultivating their respective portions of the disputed properties.

However, petitioner can retain five (5) hectares in accordance with Section 6 of RA 6657, which requires no qualifying condition for the landowner to be entitled to retain such area.

Petitioner's heirs, however, are not entitled to awards of three (3) hectares each, since they are not actually tilling the parcels or directly managing the farm.

Retention Rights (Section 6)

This right only pertains to the landowner of the land.

RETENTION LIMITS

(1) General rule – The size of any public or private agricultural land which a person may own or retain directly or indirectly shall vary according to factors governing a viable family-sized farm, such as commodity produced, terrain, infrastructure, and soil fertility as determined by the Presidential Agrarian Reform Council (PARC).

The CARL recognizes that different crops require different inputs and yield different returns; hence, the retention limits have to be flexible.

In no case, however, shall retention by the landowner exceed five hectares. (each spouse may retain 5 hectares each provided there is a judicial separation of property; if none, only 5 hectares for both of them).

3 hectares may be awarded to each child of the landowner, subject to the following conditions:(a) That he is at least 15 years of age;(b) That he is actually tilling the land or directly managing the farm.

(2) Exceptions:

(a) Landowners whose lands have been covered by PD 27 shall be allowed to keep the area originally retained by them thereunder; and(b) Original homestead grantees or their direct compulsory heirs who still own the original homestead at the time of the approval of the law shall retain the same areas as long as they continue to cultivate said homestead.

Daez vs. CA, 325 SCRA 110

Landowners who have not yet exercise their retention right under PD 27 are entitled to the new retention right under RA 6657. If the landowner file his application for retention after August 27, 1985 but he has previously filed a sworn statements required by LOI is still entitled to the retention limit of 7 hectares under PD 27. Otherwise he is entitled to retain 5 hectares under RA 6657

Requisites for the exercise by the landowner of his right of retention.

1. The land must be devoted to rice and corn crops

2. There must be a system of share-crop or lease tenancy obtaining therein3. The size of the landholdings must not exceed 24 hectares, or it may be more than 24

hectares provided that at least 7 hectares thereof are covered lands and more than 7 hectares of it consists of “other agricultural lands”

Exemptions from Coverage (Section 10)

SEC. 10. Exemptions and Exclusions.-

(a) Lands actually, directly and exclusively used for parks, wildlife, forest reserves, reforestation, fish sanctuaries and breeding grounds, watersheds and mangroves shall be exempt from the coverage of this Act.

(b) Private lands actually, directly and exclusively used for prawn farms and fishponds shall be exempt from the coverage of this Act: Provided, That said prawn farms and fishponds have not been distributed and Certificate of Land Ownership Award (CLOA) issued under the Agrarian Reform Program.

In cases where the fishponds or prawn farms have been subjected to the Comprehensive Agrarian Reform Law, by voluntary offer to sell, or commercial farms deferment or notices of compulsory acquisition, a simple and absolute majority of the actual regular workers or tenants must consent to the exemption within one (1) year from the effectivity of this Act.  When the workers or tenants do not agree to this exemption, the fishponds or prawn farms shall be distributed collectively to the worker-beneficiaries or tenants who shall form cooperative or association to manage the same.

In cases where the fishponds or prawn farms have not been subjected to the Comprehensive Agrarian Reform Law, the consent of the farmworkers shall no longer be necessary; however, the provision of Section 32-A hereof on incentives shall apply.

(c) Lands actually, directly and exclusively used and found to be necessary for national defense, school sites and campuses, including experimental farm stations operated by public or private schools for educational purposes, seeds and seedlings research and pilot production center, church sites and convents appurtenant thereto, mosque sites and Islamic centers appurtenant thereto, communal burial grounds and cemeteries, penal colonies and penal farms actually worked by the inmates, government and private research and quarantine centers and all lands with eighteen percent (18%) slope and over, except those already developed, shall be exempt from the coverage of this Act.(As amended by R. A. 7881)

Central Mindanao University (CMU) vs. DARAB, G.R. No. 100091, October 22, 1992

The court held that the 400-hectare land owned by the CMU for school site and campus, including experimental farm stations for educational purposes, is exempt from CARP coverage because –

(a) It is not alienable and disposable land of public domain;(b) The CMU land reservation is not excess of specific limits as determined by Congress;(c) It is private land registered and titled in the name of its lawful owner, the CMU;(d) It is exempt from coverage under Section 10 of RA 6657 because the lands are actually, directly and

exclusively used and found to be necessary for school site and campus, and for establishing seed and seedling research and pilot production centers.

The Court further held that the determination of when and what lands are found to be necessary for use by the CMU, the school is in the best position to resolve and answer the question and pass upon the problem of its needs in relation to its avowed objectives for which the land was given to it by the State.

Atlas Fertilizer Corp. vs. Secretary of DAR, 274 SCRA 30

Facts:

Petitioners are engaged in the aquaculture industry utilizing fishponds and prawn farms. They question Sections 3[b], 11, 13, 6[d], 17 and 32 of RA 6657 as unconstitutional because they extend the agrarian reform to aquaculture lands even as Sec. 4, Art. 13 of the Constitution limits agrarian reform only to agricultural lands.

Held:

The Court ruled that provisions of RA 7881 expressly states that fishpond and prawn farms are excluded from the coverage of CARL. Thus, petition to question the constitutionality of some portion of the Comprehensive Agrarian Reform Law is moot and academic with the passage of RA 7881.

Republic vs. CA, 342 SCRA 189

Facts:

Parcels of land in Jala-Jala, Rizal was covered and has a tax declaration classifying the said land as agricultural. The DAR then issued a Notice of Coverage of the subject parcels of land under compulsory acquisition pursuant to Section 7, Chapter II of RA 6657.

Private respondent corporation filed with the DAR office an application for exemption of the land from agrarian reform but the same was denied.

The CA reversed the DAR orders declaring those portions of the land of the petitioner which are mountainous and residential to be exempt from the CARP.

DAR then appealed to SC contending and claiming that the subject properties have already been classified as agricultural based on the tax declaration and therefore is covered by CARL.

Held:

RA 6657 (CARL) covers all private and agricultural land. Agricultural lands are “land devoted for agricultural activity and not classified as minerals, forest, residential commercial or industrial”

No law or jurisprudence holds that the land classification embodied in the tax declarations is conclusive and final nor would proscribe any further inquiry. The DAR administrative order no.6 lists the other documents, aside from tax declaration, that must be submitted when applying for exception from CARP. The classification made by the Land Regulatory Board outweighed the classification stated in the tax declaration.

Sta. Rosa Realty Dev’t Corp. vs. CA, 367 SCRA 175

Facts:

Petitioner Sta. Rosa Realty Development Corporation was the registered owner of two parcels of land at Cabuyao, Laguna. According to the petitioner, the parcels of land are watersheds, which provide clean potable water to the Canlubang community, and thet 90% light industries are now located in the area. Thus, praying for the exemption of the said parcels of land for the compulsory acquisition under CARP.

Held:

The disputed land is classified as PARK and subsequent studies and survey showed that the parcel of land in question forms a vital part of a watershed. Article 10 of RA 6657 expressly states that “Lands actually, directly and exclusively used for parks, wildlife, forest reserves, reforestation, fish sanctuaries and breeding grounds, watersheds and mangroves shall be exempt from the coverage of this Act.

Another factor that needs to be mentioned is the fact that during the DARAB hearing, petitioner presented proof that the Casile property has slopes of 18% and over, which exempted the land from the coverage of CARL. R. A. No. 6657, Section 10, provides:

"Section 10. Exemptions and Exclusions. – “xxx..and all lands with eighteen percent (18%) slope and over, except those already developed shall be exempt from coverage of this Act."

Hence, during the hearing at DARAB, there was proof showing that the disputed parcels of land may be excluded from the compulsory acquisition coverage of CARP because of its very high slopes.

Agricultural Lands (Section 11)

SEC. 11. Commercial Farming. - Commercial farms which are private agricultural lands devoted to salt beds, fruit farms, orchards, vegetable and cut-flower farms, and cacao, coffee and rubber plantations, shall be subject to immediate compulsory acquisition and distribution after ten (10) years from the effectivity of this Act.   In the case of new farms, the ten-year period shall begin from the first year of commercial production and operation, as determined by the DAR. During the ten-year period, the Government shall initiate steps necessary to acquire these lands, upon payment of just compensation for the land and the improvements thereon, preferably in favor of organized cooperatives or associations, which shall thereafter manage the said lands for the workers-beneficiaries.(As amended by R. A. 7881)

Luz Farms vs. Honorable Secretary of DAR, 192 SCRA 51

The SC held that lands devoted to the raising of livestock, poultry and swine are excluded from the coverage of RA 6657(Comprehensive Agrarian Reform Law of 1988.). Section 3 of RA 7881 amends section 11 of RA 6657 by excluding, among others, commercial livestock, poultry and swine raising from the classification of commercial farms due for CARP coverage after the 10 year deferment period.

DAR Adm. Order No. 1-2004

Sec 2.1 Agricultural Lands= refers to lands that are actually, exclusively, and directly used for cattle raising

Sec 3.1Private agricultural lands or portions thereof actually, exclusively, and directly used for cattle raising as of june 15, 1988 shall be excluded from the coverage of CARP.

Sec. 3.6 Only the grazing area within the farm and the portions of the property required for infrastructure necessary for cattle raising shall be considered for exclusion from CARP coverage. All other areas within the farm which are not used and necessary for grazing, pasture or other activities related to cattle raising but are suitable for agricultural crop production shall automatically revert to the category of agricultural land and shall be covered under CARP through compulsory acquisition.

DAR vs. Sutton, et al., G.R. No. 162070, October 19, 2005

DAR issued A.O. No. 9 to limit the area of livestock farm that may be retained by a landowner pursuant to its mandate to place all public and private agricultural lands under the coverage of agrarian reform. 

Issue:

The constitutionality of DAR A.O. No. 9, series of 1993.

Held:

Petitioner DAR has no power to regulate livestock farms which have been exempted by the Constitution from the coverage of agrarian reform.   It has exceeded its power in issuing the assailed A.O.

The fundamental rule in administrative law is that, to be valid, administrative rules and regulations must be issued by authority of a law and must not contravene the provisions of the Constitution. The rule-making power of an administrative agency may not be used to abridge the authority given to it by Congress or by the Constitution.  Nor can it be used to enlarge the power of the administrative agency beyond the scope intended.  Constitutional and statutory provisions control with respect to what rules and regulations may be promulgated by administrative agencies and the scope of their regulations In the case at bar, we find that the impugned A.O. is invalid as it    contravenes the Constitution.  The A.O. sought to regulate livestock farms by including them in the coverage of agrarian reform and prescribing a maximum retention limit for their ownership.    However,

the deliberations of the 1987 Constitutional Commission show a clear intent to exclude, inter alia, all lands exclusively devoted to livestock, swine and poultry- raising.  The Court clarified in the Luz Farms case that livestock, swine and poultry-raising are industrial activities and do not fall within the definition of “agriculture” or “agricultural activity.”  The raising of livestock, swine and poultry is different from crop or tree farming.  It is an industrial, not an agricultural, activity. 

DAR Adm. Order No. 7-2008

Policy Guidelines:

1. Private agricultural lands or portions therof actually, directly or exclusively used for livestock purposes other than agricultural like cattle raising as of june 15, 1988 and continuously and exclusively utilized or devoted for such purpose up until the time of inventory shall be excluded from CARP coverage.

2. Conversely, landholdings or any portions thereof not actually, directly and exclusively used for livestock raising are subject to CARP coverage if one or more of the following conditions apply:2.1 if there is agricultural activity in the area, i.e cultivation of the soil, planting of crops, growing of fruit trees,

including the harvesting of such products, and other farm activities and practices, whether done by a natural or juridical person and regardless of the final use or destination of such agricultural products

2.2 the land is suitable for agriculture and it is presently occupied and tilled by farmer/s.

5. in case of any of the conditions under items 2.1 and 2.2 are evident, the PARO shall immediately proceed with the issuance of NOTICE of COVERAGE on the subject landholding or portions thereof

8. any act of the landowner to change or convert his agricultural land for livestock raising shall not affect the coverage of his landholdings under CARP. Any diversification or change in the agricultural use of the landholdings, or shift from crop production to livestock raising shall be subject to the existing guidelines on land use conversion.

Jose Junio, et al., vs. Garilao, G.R. No. 147146, July 29 2005 (case not found)

Jose Luis Ros, et al. vs. DAR, G.R. No. 132477, August 31, 2005

Facts:

Petitioners are the owners/developers of several parcels of land located in Arpili, Balamban, Cebu. By virtue of Municipal Ordinance No. 101 passed by the Municipal Council of Balamban, Cebu, these lands were reclassified as industrial lands. On 03 April 1995, the Provincial Board of Cebu approved Balamban’s land use plan and adopted en toto Balamban’s Municipal Ordinance No. 101 with the passage of Resolution No. 836-95 and Provincial Ordinance No. 95-8, respectively. As part of their preparation for the development of the subject lands as an industrial park, petitioners secured all the necessary permits and appropriate government certifications.

Despite these permits and certifications, petitioner Matthias Mendezona received a letter from Mr. Jose Llames, Director of the Department of Agrarian Reform (DAR) Regional Office for Region 7, informing him that the DAR was disallowing the conversion of the subject lands for industrial use and directed him to cease and desist from further developments on the land to avoid the incurrence of civil and criminal liabilities.

Issue:

Whether or not the reclassification of the subject lands to industrial use by the Municipality of Balamban, Cebu pursuant to its authority under Section 20(a) of Republic Act No. 7160 or the Local Government Code of 1991 (the “LGC”) has the effect of taking such lands out of the coverage of the CARL and beyond the jurisdiction of the DARHeld:

After the passage of Republic Act No. 6657, otherwise known as Comprehensive Agrarian Reform Program, agricultural lands, though reclassified, have to go through the process of conversion, jurisdiction over which is vested in the DAR. However, agricultural lands already reclassified before the effectivity of Rep. Act No. 6657 are exempted from conversion.

The authority of the DAR to approve conversions of agricultural lands covered by Rep. Act No. 6657 to non-agricultural uses has not been pierced by the passage of the Local Government Code. The Code explicitly provides that “nothing in this section shall be construed as repealing or modifying in any manner the provisions of Rep. Act No. 6657.”

C. Chapter III (Improvement of Tenurial and Labor Relations)

DAR Adm. Order No. 2-06

RA 6389 automatically converted share tenancy throughout the country into agricultural leasehold relationship

1. abolition of share tenancy now covers all agricultural landholdings without exceptions2. the conversion of share tenancy into leasehold is mandated by law.3. All share-crop tenants were automatically converted into agricultural lessees as of june 15, 1988 whether or not a

leasehold agreement has been executed4. Leaseholders security of tenure shall be respected and guaranteed.

RA 6657 mandates Dar to determine the fix rentals within retained areas and areas not yet acquired for agrarian reform

- Farmer has a right to elect whether to become a farmer beneficiary or a leaseholder in the retention are of the landholder.

Agricultural leasehold shall be based on tenancy relationship. Essential elements of agricultural tenancy:

1.1 the parties are the landholder and the tenant1.2 the object of the relationship is an agricultural land1.3 the consent freely given either orally or in writing, express or implied1.4 the purpose of the relationship is agricultural production1.5 there is personal cultivation1.6 there is consideration given to the lessor either in a form of share of the harvest or payment of fixed amount in

money or produce to or both.Agricultural leasehold relation shall not be extinguished by mere expiration of the term of period in a leasehold

contract nor by the sale, alienation or transfer of the legal possession of the land.

D. Chapter IV (Land Registration)

SEC. 14. Registration of Landowners. - Within one hundred eighty (180) days from the effectivity of this Act, natural or juridical, including government entities, that own or claim to own agricultural lands, whether in their names or in the name of others, except those who have already registered pursuant to Executive Order No. 229, who shall be entitled to such incentives as may be provided for by PARC, shall file a sworn statement in the proper assessors office in the form to be prescribed by the DAR, stating the following information:

    (a) The description and area of the property;     (b) The average gross income from the property for at least three (3) years;     (c) The names of the tenants and farm workers therein;     (d) The crops planted in the property and the area covered by each crop as of June 1,1987;     (e) The terms of mortgages, leases, and management contracts subsisting as of June 1, 1987; and     (f) The latest declared market value of the land as determined by the city or provincial assessor.

SEC. 15. Registration of Beneficiaries. - The DAR in coordination with the Barangay Agrarian Reform Committee (BARC) as organized in this Act, shall register all agricultural lessees, tenants and farmworkers who are qualified to be beneficiaries with the assistance of the BARC and the DAR shall provide the following data:

    (a) Names and members of their immediate farm household;     (b) Location and area of the land they work;     (c) Crops planted; and     (d) Their share in the harvest or amount of rental paid or wages received.

A copy of the registry or list of all potential CARP beneficiaries in the barangay shall be posted in the barangay hall, school or other public buildings in the barangay where it shall be open to inspection by the public at all reasonable hours.

PURPOSE OF REGISTRATION:

1.) For databank purposes2.) And have a list of who really are the beneficiaries.

Fortich, et al. vs. Corona, et al., G.R. 131457, August 19, 1999

This case involves a 144-hectare land located at San Vicente, Sumilao, Bukidnon, owned by the Norberto Quisumbing, Sr. Management and Development Corporation (NQSRMDC), one of the petitioners. The property is covered by a Transfer Certificate of Title No. 14371 3 of the Registry of Deeds of the Province of Bukidnon.

In 1984, the land was leased as a pineapple plantation to the Philippine Packing Corporation, now Del Monte Philippines, Inc. (DMPI), a multinational corporation, for a period of ten (10) years under the Crop Producer and Grower's Agreement duly annotated in the certificate of title. The lease expired in April, 1994.

In October, 1991, during the existence of the lease, the Department of Agrarian Reform (DAR) placed the entire 144-hectare property under compulsory acquisition and assessed the land value at P2.38 million. 4

NQSRMDC resisted the DAR's action. In February, 1992, it sought and was granted by the DAR Adjudication Board (DARAB), through its Provincial Agrarian Reform Adjudicator (PARAD) in DARAB Case No. X-576, a writ of prohibition with preliminary injunction which ordered the DAR Region X Director, the Provincial Agrarian Reform Officer (PARO) of Bukidnon, the Municipal Agrarian Reform Office (MARO) of Sumilao, Bukidnon, the Land Bank of the Philippines (Land Bank), and their authorized representatives "to desist from pursuing any activity or activities" concerning the subject land "until further orders." 5

On November 7, 1997, the Office of the President resolved the strikers' protest by issuing the so-called "Win/Win" Resolution penned by then Deputy Executive Secretary Renato C. Corona

In seeking the nullification of the "Win-Win" Resolution, the petitioners claim that the Office of the President was prompted to issue the said resolution "after a very well-managed hunger strike led by fake farmer-beneficiary Linda Ligmon succeeded in pressuring and/or politically blackmailing the Office of the President to come up with this purely political decision to appease the 'farmers,' by reviving and modifying the Decision of 29 March 1996 which has been declared final and executory in an Order of 23 June 1997.

Now to the main issue of whether the final and executory Decision dated March 29, 1996 can still be substantially modified by the "Win-Win" Resolution.

We rule in the negative.

The rules and regulations governing appeals to the Office of the President of the Philippines are embodied in Administrative Order No. 18. Section 7 thereof provides:

Sec. 7. Decisions/resolutions/orders of the Office of the President shall, except as otherwise provided for by special laws, become final after the lapse of fifteen (15) days from receipt of a copy thereof by the parties, unless a motion for reconsideration thereof is filed within such period.

Only one motion for reconsideration by any one party shall be allowed and entertained, save in exceptionally meritorious cases. (Emphasis ours).

It is further provided for in Section 9 that "The Rules of Court shall apply in a suppletory character whenever practicable.

When the Office of the President issued the Order dated June 23, 1997 declaring the Decision of March 29, 1996 final and executory, as no one has seasonably filed a motion for reconsideration thereto, the said Office had lost its jurisdiction to re-open the case, more so modify its Decision. Having lost its jurisdiction, the Office of the President has no more authority to entertain the second motion for reconsideration filed by respondent DAR Secretary, which second motion became the basis of the assailed "Win-Win" Resolution. Section 7 of Administrative Order No. 18 and Section 4, Rule 43 of the Revised Rules of Court mandate that only one (1) motion for reconsideration is allowed to be taken from the Decision of March 29, 1996. And even if a second motion for reconsideration was permitted to be filed in "exceptionally meritorious cases," as provided in the second paragraph of Section 7 of AO 18, still the said motion should not have been entertained considering that the first motion for reconsideration was not seasonably filed, thereby allowing the Decision of March 29, 1996 to lapse into finality. Thus, the act of the Office of the President in re-opening the case and substantially modifying its March 29, 1996 Decision which had already become final and executory, was in gross disregard of the rules and basic legal precept that accord finality to administrative determinations.

E. Chapter V (Land Acquisition)

MODES OF ACQUIRING PRIVATE LANDS

1.) OPERATION LAND TRANSFER (OLT)

- is a mechanism established for the implementation of PD 27. It is a mode by which ownership of tenanted rice and corn lands is transferred to tenant beneficiaries. But for the lands to come under OLT, there must be a showing that they are tenanted lands.

2.) VOLUNTARY OFFER TO SELL (VOS)

- is a scheme whereby the landowners voluntarily offer their agricultural lands for coverage regardless of phasing. It does not, however, mean that their landholdings voluntarily offered for sale are automatically accepted by the DAR. A VOS may be rejected if the landholding is not suitable for agriculture, or has a slope of more than 18% and is undeveloped.

3.) VOLUNTARY LAND TRANSFER/DIRECT PAYMENT SCHEME (VLT/DPS)

- is a mode of acquisition whereby the landowner and the beneficiary enter into a voluntary arrangement for the direct transfer of the lands to the latter. Not all private agricultural lands may be the subject for of voluntary transfer. For instance, lands mortgaged with banking and/or financial institution cannot be subject to this scheme.

4.) COMPULSORY ACQUISITION (CA)

- is a mode of acquisition whereby the State expropriates the land in accordance with the procedure outlined in Section 16 of RA No. 6657.

5.) VOLUNTARY STOCK DISTRIBUTION (VSD) in the case of corporate farms

- is an alternative arrangement for the physical distribution of lands wherein corporate owners voluntarily divest a portion of their capital stock, equity or participation in favor of their workers or other qualified beneficiaries. Stock

ownership is based is based on the capital stocks of the corporation and is equivalent to the agricultural land actually devoted to agricultural activities valued in relation to the total assets of the corporation.

Procedure (Section 16)

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 of the land by requiring the landowner, the LBP and other interested parties to summit evidence as to the just compensation for the land, within fifteen (15) days from the 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 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.

Above was mentioned in the case CONFED, et al. vs. DAR as the procedure in Compulsory Acquisition.

Compensation in cash or in LBP bonds (Section 16)

Land Bank v. CA , 249 SCRA 149 Held:

It is very explicit under Section 16 (e) of RA 6657 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, which 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”. Thus, there is no basis in allowing Land Bank to open a trust account in behalf of the landowner as compensation for his property. And the landowners can already appropriate the amounts once deposited pending final resolution of the cases.Any other forms of deposit not mentioned in the law are not allowed.

. Compulsory acquisition and Notice requirements (Section 16[e])Roxas & Co., Inc. vs. CA, G.R. No. 127876, August 19,1999 Procedure of Compulsory Acquisition:

1.) IDENTIFY first the (a) LAND, (b) LANDOWNER and (c) the BENIFICIARIES2.) DAR shall send NOTICE of ACQUISITION to the land owner – by personal or by mail

3.) 30 days from receipt – landowner may ACCEPT or REJECT the offer

If ACCEPTED:

(a) He executes and delivers a deed of transfer in favor of the government(b) After 30 days from execution, the Land Bank pays the owner the purchase price.

If REJECTED/FAIL TO REPLY:

DAR will conduct summary administrative proceedings to determine just compensation for the land.

(a) The owner, LBP Rep. and other interested party submit evidence on just compensation within 15 days from receipt.

(b) Within 30 days from submission, the DAR shall decide the case and inform the owner of the amount of just compensation. ( Decision of the DAR is not final but only preliminary)

(c) 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.

(d) The DAR shall immediately take the possession of the land and cause the issuance of a transfer certificate of title in the name of the Republic of the Philippines.

(e) And eventually distribute it to the farmer beneficiaries.

For valid implementation of the CAR Program, two NOTICES are required:

(1) The NOTICE OF COVERAGE and the LETTER OF INVITATION to a preliminary conference sent to the:

(a) landowner (b) representative of Barangay Agrarian Reform Committee or BARC (c) Land Bank(d) Farmer Beneficiaries(e) other interested parties

(2) The NOTICEOF ACQUISITION sent to the landowner under Section 16 of CARL

NOTE:

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.

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.

F. Chapter VI (Compensation)

Meaning of Just Compensation

Assoc. of Small Landowners in the Phil., Inc. vs. Sec. of DAR, G.R. No. 78742 July 14, 1989

Just compensation is defined as the full and fair equivalent of the property taken from its owner by the expropriator. It has been repeatedly stressed by this Court that the measure is not the taker's gain but the owner's loss. The word "just" is used to intensify the meaning of the word "compensation" to convey the idea that the equivalent to be rendered for the property to be taken shall be real, substantial, full, ample

In J.M. Tuazon Co. v. Land Tenure Administration, this Court held: It is well-settled that just compensation means the equivalent for the value of the property at the time of its taking. Anything beyond that is more, and anything short of that is less, than just compensation. It means a fair and full equivalent for the loss sustained, which is the measure of the indemnity, not whatever gain would accrue to the expropriating entity. The market value of the land taken is the just compensation to which the owner of condemned property is entitled, the market value being that sum of money which a person desirous, but not compelled to buy, and an owner, willing, but not compelled to sell, would agree on as a price to be given and received for such property

Factors (Article 17)

SEC. 17. Determination of Just Compensation. - In determining just compensation, the cost of acquisition of the land, the current value of like properties, its nature, actual use and income, the sworn valuation by the owner, the tax declarations, and the assessment made by government assessors, shall be considered. The social and economic benefits contributed by the farmers and the farmworkers and by government to the property as well as the non-payment of taxes or loans secured from any government financing institution on the said land shall be considered as additional factors to determine its valuation.

Sps. Lee, vs. Land Bank of the Philippines , G.R. No. 170422, March 07, 2008

Facts:Petitioner were notified that their land holdings is covered by Gov't Action Scheme pursuant to CARP. They received

a notice of Land valuation from DAR which offers P315, 307 for 3.195 hec. DAR Adjudication Board affirmed the compensation and valuation and declared that LBP fully complied with the criteria set forth by CARP. Petitioners sought reconsideration but was denied. Petitioner filed a petition for determination of Just Compensation before RTC. RTC acting as Special Agrarian Court (SAC), citing appraisal report decided P7,978,750.00 as just compensation and ordered LBP to pay.

Petition for review by LBP to CA and found that the SAC made a wholesale adoption of the valuation of the appraisal company and did not consider the other factors set forth in R.A. No. 6657 even though the appraisal company admitted that it did not consider as applicable the CARP valuation of the property. Hence, this petition.

Held:

The Court took note:

“These factors have already been incorporated in a basic formula by the DAR pursuant to its rule-making power under Section 49 of R.A. No. 6657. AO No. 5 precisely filled in the details of Section 17, R. A. No. 6657 by providing a basic formula by which the factors mentioned therein may be taken into account. This formula has to be considered by the SAC in tandem with all the factors referred to in Section 17 of the law. The administrative order provides:

A. There shall be one basic formula for the valuation of lands covered by VOS or CA:

LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)

Where:LV = Land ValueCNI = Capitalized Net IncomeCS = Comparable SalesMV = Market Value per Tax Declaration

The above formula shall be used if all three factors are present, relevant, and applicable.

A1. When the CS factor is not present and CNI and MV are applicable, the formula shall be:LV = (CNI x 0.9) + (MV x 0.1)

A2. When the CNI factor is not present, and CS and MV are applicable, the formula shall be:LV = (CS x 0.9) + (MV x 0.1)

A3. When both the CS and CNI are not present and only MV is applicable, the formula shall be:LV = MV x 2

In no case shall the value of idle land using the formula MV x 2 exceed the lowest value of land within the same estate under consideration or within the same barangay or municipality (in that order) approved by LBP within one (1) year from receipt of claimfolder.

---

Where:

CNI= (AGPxSP) - CO

  .12  

AGP= Average Gross Production corresponding to the latest available 12 months gross production immediately preceding the date of FI (field investigation)

SP= Selling Price (the average of the latest available 12 months selling prices prior to the date of receipt of the CF (claim folder) by LBP for processing, such prices to be secured from the Department of Agriculture (DA) and other appropriate regulatory bodies or, in their absence, from the Bureau of Agricultural Statistics. If possible, SP data shall be gathered for the barangay or municipality where the property is located. In the absence thereof, SP may be secured within the province or region.

CO = Cost of Operations

Whenever the cost of operations could not be obtained or verified, an assumed net income rate (NIR) of 20% shall be used. Landholdings planted to coconut which are productive at the time of FI shall continue to use the assumed NIR of 70 %. DAR and LBP shall continue to conduct joint industry studies to establish the applicable NIR for each crop covered under CARP.

0.12 = Capitalization rate”

The Court finds that the factors required by the law and enforced by the DAR Administrative Order were not observed by the SAC when it adopted wholeheartedly the valuation arrived at in the appraisal report. The Court repremands the case to

the RTC acting as a Special Agrarian Court for the determination of just compensation in accordance with Section 17 of Republic Act No. 6657.

Land Bank of the Phils. vs. Heirs of Eleuterio Cruz, G.R. No. 175175, September 29, 2008

Facts:

Landholding of the respondents was placed under the coverage of the land transfer program of P.D. 27. Petitioner pegged the value of the acquired landholding at P106,935.76 based on the guidelines set forth under P.D. No. 27 and E.O. 228. Respondents petitioned for valuation and determination of just compensation before the Provincial Agrarian Reform Adjudicator which fixed it to P80,000.00 per hectare. Motion for Reconsideration was denied so the Petitioner petition for the determination of just compensation before the RTC acting as SAC held that the value of P80,000.00 per hectare fixed by the PARAD should be accorded weight and probative value and that the SAC is guided by the various factors enumerated in Section 17of R.A. No. 6657 in determining just compensation. It disregarded respondents' claim that the valuation should be based on the current market value of the landholding since no evidence was adduced in support of the claim and also did not accept petitioner's valuation as it was based on P.D. No. 27, in which just compensation was determined at the time of the taking of the property. CA rendered the assailed decision partly granting petitioner's appeal but affirmed the SAC decision fixing just compensation at P80,000.00 per hec. Reconsideration was denied. Hence, the instant petition, arguing that the formula set forth in P.D. No. 27/E.O. No. 228 should be applied in fixing just compensation since respondents' landholding was acquired under P.D. No. 27 in cognizance to a settled rule that just compensation is the value of the property at the time of the taking, on 21 October 1972.

Held:

The Court citing Land Bank of the Philippines v. Natividad, “It would certainly be inequitable to determine just compensation based on the guideline provided by PD No. 27 and EO 228 considering the DAR's failure to determine the just compensation for a considerable length of time. That just compensation should be determined in accordancewithRA6657,and not PD 27 or EO 228, is especially imperative considering that just compensation should be the full and fair equivalent of the property taken from its owner by the expropriator, the equivalent being real, substantial, full and ample.”

The Court remanded the determination of just compensation to RTC acting as SAC.

Valuation and Payment (Section 18)

FORMS OF PAYMENT!!!!

SEC. 18. Valuation and Mode of Compensation. - The LBP shall compensate the landowner in such amount as may be agreed upon by the landowner and the DAR and LBP or as may be finally determined by the court as just compensation for the land.

The compensation shall be paid in one of the following modes at the option of the landowner:

(1) Cash payment, under the following terms and conditions:

(a) For lands above fifty (50) hectares, insofar as the excess hectarage is concerned - Twenty-five percent (25%) cash, the balance to be paid in government financial instruments negotiable at any time.

(b) For lands above twenty-four hectares and up to fifty (50) hectares - Thirty percent (30%) cash, the balance to be paid in government financial instruments negotiable at any time.

(c) For lands twenty-four (24) hectares and below - Thirty-five percent (35%) cash, the balance to be paid in government financial instruments negotiable at any time.

(2) Shares of stock in government-owned or controlled corporations , LBP preferred shares, physical assets or other qualified investments in accordance with guidelines set by the PARC;

(3) Tax credits which can be used against any tax liability;

(4) LBP bonds, which shall have the following features:

(a) Market interest rates aligned with 91-day treasury bill rates. Ten percent (10%) of the face value of the bonds shall mature every year from the date of issuance until the tenth (10th) year: Provided, That should the landowner choose

to forego the cash portion, whether in full or in part, he shall be paid correspondingly in LBP bonds;

(b) Transferability and negotiability. Such LBP bonds may be used by the landowner, his successors-in-interest or his assigns, up to the amount of their face value for any of the following:

(i) Acquisition of land or other real properties of the government, including assets under the Assets Privatization Program and other assets foreclosed by government financial institution in the same province or region where the lands for which the bonds were paid are situated;

(ii) Acquisition of shares of stock of government-owned or controlled corporations or shares or stock owned by the government in private corporations;

(iii) Substitution for surety or bail bonds for the provisional release of accused persons, or for performance bonds;

(iv) Security for loans with any government financial institution, provided the proceeds of the loans shall be invested in an economic enterprise, preferably in a small and medium-scale industry, in the same province or region as the land for which the bonds are paid;

(v) Payment for various taxes and fees to the government: Provided, That the use of these bonds for these purposes will be limited to a certain percentage of the outstanding balance of the financial instrument: Provided, further, That the PARC shall determine the percentages mentioned above;

(vi) Payment for tuition fees of the immediate family of the original bondholder in government universities, colleges, trade schools and other institutions;

(vii) Payment for fees of the immediate family of the original bondholder in government hospitals; and

(viii) Such other uses as the PARC may from time to time allow.

In case of extraordinary inflation, the PARC shall take appropriate measures to protect the economy.

Content and Manner of Compensation (Section 18)

Association of Small land Owners vs. Hon. Secretary, G.R. No. 78742 July 14, 1989

The Court, in an En Banc, resolved the four different cases involve common legal questions, including serious challenges to the constitutionality of the several measures.

One of those which is the challenge to the Constitutionality of the provision on just compensation which is the Section 18 of R.A. 6657 quoted under Valuation and Payment. This is the case of Nicolas S. Manaay and Agustin Hermano, Jr. vs. Hon. Philip Ella Juico, as Secretary of Agrarian Reform, and Land Bank of the Philippine where the petitioners contends that the above provision is unconstitutional insofar as it requires the owners of the expropriated properties to accept just compensation therefor in less than money, which is the only medium of payment allowed.

The Court ruled in rejecting said contention, in the words of Justice Cruz, “It cannot be denied from these cases that the traditional medium for the payment of just compensation is money and no other. And so, conformably, has just compensation been paid in the past solely in that medium. However, we do not deal here with the traditional exercise of the power of eminent domain. This is not an ordinary expropriation where only a specific property of relatively limited area is sought to be taken by the State from its owner for a specific and perhaps local purpose. What we deal with here is a revolutionary kind of expropriation.”

Parties Involve (Section 18)

Land Bank vs. CA and Jose Pascual , G.R. No. 128557 December 29, 1999

Facts:The LBP as the financing arm in the operation of PD 27 and EO 228 refused to pay compensation for privates

respondent, the land owner. Despite letters from the DAR Secretary requiring said Bank to pay but it still refused. The private

respondent had to resort for a petition for Mandamus which the court of Appeals granted, ordering petitioner to pay the declared amount by the Provincial Agrarian Reform Officer. Petitioner moved for reconsideration but was denied and now runs to the High Court, hence, this petition. One of the contention interposed by the petitioner is that the Court of Appeals cannot issue the Writ of Mandamus because it cannot be compelled to perform an act which is beyond its legal duty. Petitioner argues that for a financing or guarantee agreement to exist there must be at least three (3) parties: the creditor, the debtor and the financier or the guarantor. Since petitioner merely guarantees or finances the payment of the value of the land, the farmer-beneficiary's consent, being the principal debtor, is indispensable and that the only time petitioner becomes legally bound to finance the transaction is when the farmer-beneficiary approves the appraised land value.

Held:The Court ruled that a perusal of the law shows that the consent of the farmer-beneficiary is not required in

establishing the vinculum juris for the proper compensation of the landowner. As it has been noted from the first paragraph of Section 18 or R.A. 6657, the landowner, the DAR and the Land Bank are the only parties involved. The law does not mention the participation of the farmer-beneficiary.

Voluntary Offer for Sale (Section 19)

SEC. 19. Incentives for Voluntary Offers for Sale. - Landowners other than banks and other financial institutions who voluntarily offer their lands for sale shall be entitled to an additional five percent (5%) cash payment.

Voluntary Transfer (Section 20 and 21)

SEC. 20. Voluntary Land Transfer. - Landowners of agricultural lands subject to acquisition under this Act may enter into a voluntary arrangement for direct transfer of their lands to qualified beneficiaries subject to the following guidelines:

(a) All notices for voluntary land transfer must be submitted to the DAR within the first year of the implementation of the CARP. Negotiations between the landowners and qualified beneficiaries covering any voluntary land transfer which remain unresolved after one (1) year shall not be recognized and such land shall instead be acquired by the government and transferred pursuant to this Act.

(b) The terms and conditions of such transfer shall not be less favorable to the transferee than those of the government's standing offer to purchase from the landowner and to resell to the beneficiaries, if such offers have been made and are fully known to both parties.

(c) The voluntary agreement shall include sanctions for non-compliance by either party and shall be duly recorded and its implementation monitored by the DAR.

SEC. 21. Payment of Compensation by Beneficiaries Under Voluntary Land Transfer.- Direct payment in cash or in kind may be made by the farmer-beneficiary to the landowner under terms to be mutually agreed upon by both parties, which shall be binding upon them, upon registration with and approval by the DAR. Said approval shall be considered given, unless notice of disapproval is received by the farmer-beneficiary within 30 days from the date of registration. In the event they cannot agree on the price of the land, the procedure for compulsory acquisition as provided in Section 16 shall apply. The LBP shall extend financing to the beneficiaries for purposes of acquiring the land.

Revised Rules and Procedures Governing the Acquisition of private Agricultural Lands Subject of Voluntary Land transfer or Direct Payment Scheme (VLT/DPS) pursuant to R.A. 6657.

Admin. Order No. 02, Series of 1995.

The salient features of this Order is the provisions on the Operating Procedures. The Land owner must accomplish the Notice/Application for voluntary Land transfer/Direct Payment Scheme (VLT/DPS Form No. 1) and submit the same to the Municipal Agrarian Reform Office concerned together with the following documents: a. Agrarian Information Sheet, b. Agreement of Voluntary Land Transfer, c. Documents required under Item c.1 (Owner's copy of titled, copy of the latest Tax declaration, approved segregation or subdivision plan, real estate tax declaration or statement of tax delinquency, and certificate from the office of the register of deed concern that the property/ies as appearing in the title is/are free from all liens and encumbrances) or C.2. (copy of the latest Tax declaration , Survey plan and technical description of the property duly approved by the Land management Sector of the department of Environment and Natural Resources, real estate tax declaration or statement of tax delinquency, affidavit of the landowner stating that the property appearing in the approved survey is exclusively owned by him and not subject to claim by any third party, and certificate from the office of the register of deed and assessor concerned that the subject property/ies is/are free from all liens and encumbrances) of the administrative

order. For untitled properties, a sketch plan of the farm holding, instead of a survey plan, may be initially submitted. It also provide for the task of the DAR Municipal Agrarian Reform Office and the DAR Provincial Agrarian Reform Office.

G. Chapter VII (Land Distribution)

Qualified Beneficiaries (Section 22)

“Section 22 of the CARL provides:

Section 22. Qualified Beneficiaries. - The lands covered by the CARP shall be distributed as much as possible to landless residents of the same baranggay, or in the absence thereof, landless residents of the same municipality in the following order of priority:

(a) agricultural lessees and share tenants;

(b) regular farmworkers;

(c) seasonal farmworkers;

(d) other farmworkers;

(e) actual tillers or occupants of public lands;

(f) collectives or cooperatives of the abovementioned beneficiaries and

(g) others directly working on the land.

x x x x x x x x x

A basic qualification of a beneficiary is his willingness, aptitude and ability to cultivate and make the land as productive as possible. The DAR shall adopt a system of monitoring the record or performance of each beneficiary, so that any beneficiary guilty of negligence or misuse of the land or any support extended to him shall forfeit his right to continue as such beneficiary. The DAR shall submit periodic reports on the performance of the beneficiaries to the [Presidential Agrarian Reform Council].

x x x x x xx x x

This provision enumerates who are qualified beneficiaries of the CARP. Determining whether or not one is eligible to receive land involves the administrative implementation of the program. For this reason, only the DAR Secretary can identify and select CARP beneficiaries. Thus, courts cannot substitute their judgment unless there is a clear showing of grave abuse of discretion.[30]

Section 22 of the CARL does not limit qualified beneficiaries to tenants of the landowners. Thus, the DAR cannot be deemed to have committed grave abuse of discretion simply because its chosen beneficiaries were not tenants of PCPCI (DAR vs. Polo Coconut Plantation Co., In., et al., G.R. 168787, September 3, 2008).

Award Ceiling Limit (Section 23)

SEC. 23. Distribution Limit. - No qualified beneficiary may own more than three (3) hectares of agricultural land.

Commencement of Award (Section 24 and 25)

SEC. 24. Award to Beneficiaries. - The rights and responsibilities of the beneficiary shall commence from the time the DAR makes an award of the land to him, which award shall be completed within one hundred eighty (180) days from the time the DAR takes actual possession of the land. Ownership of the beneficiary shall be evidenced by a Certificate of Land Ownership Award, which shall contain the restrictions and conditions provided for in this Act, and shall be recorded in the Register of Deeds concerned and annotated on the Certificate of Title.

SEC. 25. Award Ceilings for Beneficiaries. - Beneficiaries shall be awarded an area not exceeding three (3) hectares, which may cover a contiguous tract of land or several parcels of land cumulated up to the prescribed award limits.

For purposes of this Act, a landless beneficiary is one who owns less than three (3) hectares of agricultural land. The beneficiaries may opt for collective ownership, such as co-workers or farmers' cooperative or some other form of collective organization: Provided, That the total area that may be awarded shall not exceed the total number of co-workers or members of the cooperative or collective organization multiplied by the award limit above prescribed, except in meritorious cases as determined by the PARC. Title to the property shall be issued in the name of the co-owners or the cooperative or collective

organization as the case may be.

Payment (Section 24)

SEC. 26. Payment by Beneficiaries. - Lands awarded pursuant to this Act shall be paid for by the beneficiaries to the LBP in thirty (30) annual amortizations at six percent (6%) interest per annum. The payments for the firs three (3) years after the award may be at reduced amounts as established by the PARC : Provided, That the first five (5) annual payments may not be more than five percent (5%) of the value of the annual gross production is paid as established by the DAR. Should the scheduled annual payments after the fifth year exceed ten percent (10) of the annual gross production and the failure to produce accordingly is not due to the beneficiary's fault, the LBP may reduce the interest rate or reduce the principal obligation to make the payment affordable.

The LBP shall have a lien by way of mortgage on the land awarded to beneficiary and this mortgage may be foreclosed by the LBP for non-payment of an aggregate of three (3) annual amortizations. The LBP shall advise the DAR of such proceedings and the latter shall subsequently award the forfeited landholding to other qualified beneficiaries. A beneficiary whose land as provided herein has been foreclosed shall thereafter be permanently disqualified from becoming a beneficiary under this Act.

H. Chapter VIII (Corporate Farms)

SEC. 29. Farms Owned or Operated by Corporations or Other Business Associations. - In the case of farms owned or operated by corporations or other business associations, the following rules shall be observed by the PARC.

In general, lands shall be distributed directly to the individual worker-beneficiaries.

In case it is not economically feasible and sound to divide the land, then it shall be owned collectively by the worker-beneficia -ries who shall form a workers' cooperative or association which will deal with the corporation or business association. Until a new agreement is entered into by and between the workers' cooperative or association and the corporation or business asso -ciation, any agreement existing at the time this Act takes effect between the former and the previous landowner shall be re-spected by both the workers' cooperative or association and the corporation or business association.

SEC. 30. Homelots and Farmlots for Members of Cooperatives. - The individual members of the cooperatives or corporations mentioned in the preceding section shall be provided with homelots and small farmlots for their family use, to be taken from the land owned by the cooperative or corporation.

SEC. 31. Corporate Landowners. - Corporate landowners may voluntarily transfer ownership over their agricultural landholdings to the Republic of the Philippines pursuant to Section 20 hereof or to qualified beneficiaries, under such terms and conditions consistent with this Act, as they may agree upon, subject to confirmation by the DAR.

Upon certification by the DAR, corporations owning agricultural lands may give their qualified beneficiaries the right to purchase such proportion of the capital stock of the corporation that the agricultural land, actually devoted to agricultural

activities, bears in relation to the company's total assets, under such terms and conditions as may be agreed upon by them. In no case shall the compensation received by the workers at the time the shares of stocks are distributed be reduced. The same principle shall be applied to associations, with respect to their equity or participation.

Corporations or associations which voluntarily divest a proportion of their capital stock, equity or participation in favor of their workers or other qualified beneficiaries under this section shall be deemed to have complied with the provisions of this Act: Provided, That the following condition are complied with:

(a) In order to safeguard the right of beneficiaries who own shares of stocks to dividends and other financial benefits, the books of the corporation or association shall be subject to periodic audit by certified public accountants chosen by the beneficiaries;

(b) Irrespective of the value of their equity in the corporation or association, the beneficiaries shall be assured of at least one (1) representative in the board of directors, or in a management or executive committee, if one exists, of the corporation or association;

(c) Any shares acquired by such workers and beneficiaries shall have the same rights and features as all other shares; and

(d) Any transfer of shares of stocks by the original beneficiaries shall be void ab initio UNLESS said transaction is in favor of a qualified and registered beneficiary within the same corporation.

If within two (2) years from the approval of this Act, the land or stock transfer envisioned above is not made or realized or the plan for such stock distribution approved by the PARC within the same period, the agricultural land of the corporate owners or corporation shall be subject to the compulsory coverage of this Act.

SEC. 32. Production-Sharing. - Pending final land transfer, individuals or entities owning, or operating under lease or management contract, agricultural lands are hereby mandated to execute a production-sharing plan with their farmworkers or farmworkers' organization, if any, whereby three percent (3%) of the gross sales from the production of such lands are distributed within sixty (60) days at 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, determines a lower ceiling.chan robles virtual law library In the event that the individual or entity realizes a profit, an additional ten percent (10%) of the net profit after tax shall be distributed to said regular and other farmworkers within ninety days at the end of the fiscal year. To forestall any disruption in the normal operation of lands to be turned over to the farmworker-beneficiaries mentioned above, a transitory period, the length of which shall be determined by the DAR, will be established.

During this transitory period, at least one percent (1%) of the gross sales of the entity shall be distributed to the managerial, supervisory and technical group in place at the time of the effectivity of this Act, as compensation for such transitory managerial and technical function it will perform, pursuant to an agreement that the farmworker-beneficiaries and the managerial, supervisory and technical group may conclude, subject to the approval of the DAR.

SEC. 33. Payment of Shares of Cooperative or Association. - Shares of a cooperative or association acquired by farmers-beneficiaries or workers-beneficiaries shall be fully paid for in an amount corresponding to the valuation as determined in the immediately succeeding section. The landowner and the LBP shall assist the farmer-beneficiaries and worker-beneficiaries in the payment for said shares by providing credit financing.

SEC. 34. Valuation of Lands. - A valuation scheme for the land shall be formulated by the PARC, taking into account the factors enumerated in Section 17, in addition to the need to stimulate the growth of cooperatives and the objective of fostering responsible participation of the workers-beneficiaries in the creation of wealth.

In the determination of a price that is just not only to the individual but to society as will, the PARC shall consult closely with the landowner and the workers-beneficiaries.

In case of disagreement, the price determined by the PARC, if accepted by the workers-beneficiaries, shall be followed, with-out prejudice to the landowner's right to petition the Special Agrarian Court to resolve the issue of valuation.

Guidelines and Procedure for Corporate Landowners desiring to Avail themselves of the Stock Distribution Plan un-der Sec. 31 of R.A. 6657

and superseding Department of Agrarian Reform Administrative Order No. 4'87.Administrative Order No. 10, Series of 1988

Implementing Sec. 31 of R.A. 6657, the following Guidelines and Procedures are hereby promulgated for the guidance of all concerned.

Section 1. 1a.) Qualified Corporate Land-Applicant – All bonafide stock corporations owning agricultural land utilized for agricul -

tural production and existing as such as of June 15, 1988, the date of effectivity of RA 6657 may apply and avail of the volun -tary stock distribution plan provided in Section 31 thereof. New corporations incorporated after the effectivity of RA 6657 may also apply, provided that they are subsidiaries of or spin-offs from their mother corporation which are otherwise qualified tp ap-ply hereunder, but have chosen to organize separately to facilitate stock acquisition control and greater benefits to the corpo -rate landowner applicant's farm workers and other qualified beneficiaries.

1b.) Qualified beneficiaries – The qualified beneficiaries in the stock distribution plan are all those identified as benefi -ciaries of the land transfer enumerated under Section 22 of RA 6657.

Th stock distribution plan shall be agreed upon by both the corporate landowner-applicant and the qualified beneficia-ries and subject to approval by PARC. DAR shall monitor and device a system of ensuring the voluntary acceptance by the beneficiaries of this plan for stock distribution. The acceptance of the qualified beneficiaries shall be binding upon all the quali -fied beneficiaries within the applicant-corporation.

Section 2. Applicant and Time of Filing – The corporate landowner-applicant shall file the stock distribution plan in form to be prescribed by DAR and obtain approval within two years from the effectivity of RA 6657 but prior to DAR's notice of compul -sory acquisition of said property under the same law.

Section 3. Proposition of Distribution – the stock distribution plan of corporate landowner-applicant at least such proposition of the capital sock of the corporation that the agricultural land, actually devoted to agricultural activities, bears in relation to the corporation's total assets under such terms and conditions as may be agree upon by them.

Section 4. Stock Distribution Plan – he stock distribution plan submitted by the corporate landowner – applicant shall provide for the distribution of an equal number of shares of stock of the same class and value, with the same rights and features as all other shares, to each of the qualified beneficiaries. This distribution plan in all cases shall be at leas the minimum ratio for pur -pose of compliance with Section 31 of RA 6657.

On the top of the minimum ratio provided under section 3 of the Implementing Guidline, corporate landowner-appli -cant may adopt additional stock distribution schemes taking into account factors such as rank, seniority, salary position and other circumstances which may be deemed desirable as a matter of sound company policy.

Section 5. Criteria for the Evaluation of proposal – the stock distribution plan submmitted by the corporate landowner-applicant shall meet the following minimum criteria:

a. that the continued operation of th corporation with its agricultural land intact an unfragmented is viable;b. that the plan for stock distribution to qualified beneficiaries would result in increased income and greater

benefits to them, than if the lands were divided and distributed to them individually;c. that the stock distribution plan is acceptable to a majority, defined as 50% - 1 of all the qualified beneficia-ries;d. that the plan shall include a provision that the books of the corporation shall be subject to periodic audit by certified public accountants chosen by the beneficiaries;e. that irrespective of the value of the beneficiaries equity in the corporation, they shall be assured of at least

(1) one representative in the Board of Directors or in a management of executive committee , if one exists, of the cor-poration and the corporation must amend its by-laws and/or articles of incorporation to provide such;

f. that the beneficiaries who avails of a stock option must first execute the necessary waiver from being a beneficiary distribution under section 22 of RA 6657. A breach of the foregoing constitute a willful; violation of the Act.

g. other criteria that the DAR may prescribe in making its own independent evaluation of the stock distribu-tion plan of the corporated landowner-applicant as provided for in Section 13 herein.

Section 6. Valuation and Compensation – The valuation of corporate submitted by the corporate landowner-applicant in this proposal shall be subject based on the land valuation guidelines promulgated by DAR.

Section 7. Modes of Stock Distribution – The stock distribution plan of the corporate landowner-application may be effected through divestment of the existing equity holdings by stockholders or other modes of stock distribution acceptable to both par-ties and duly approved by DAR.

Section 8. Limited Transferability of Beneficiaries' s Stock – the stocks acqired though this stock distribution plan by the benefi -ciaries may be transferred voluntarily only to other qualified beneficiaries.

Section 9. Payment of Shares – the payment of the purchase price of the shares shall be under such terms and conditions agreed upon by the corporate landowner-applicant and the compensation received by the worker, as the time the shares of the

stock are distributed, be reduced.No government funds, e.i., National Treasury or Land Bank of the Philippines (LBP) funds, may be used for this pur-

pose.

Section 10. Disposition of Proposal – After the evaluation of the stock distribution plan submiited by the corporate loandowner-applicant to the secretary of Agrarian reform. He shall forward the same with all supporting documents to the Presidential Agrarian Reform Council (PARC), though is executive committee, with his recommendation for final action.

Section 11. Implementation – Monitoring of Plan – The approved stock distribution plan shall be implemented within three (3) months from receipt by the corporate landowner-applicant of the approval thereof by the PARC and the transfer of the the shares of stock in the names of the qualified beneficiaries shall be recorded in the stock and transfer books and submitted to the Securities and exchange Commission (SEC) within sixty distribution plan.

Upon completion, the corporate landowner-applicant shall be issued a Certificate of Compliance. The Secretary of Agrarian Reform or his desined representatives shal strictly monitor the implementation to determine whether or not there has been compliance with the approved stock distribution plan as well as the requirements of the CARP. For this purpose, the cor-porate landowner-applicant shall make available its premises for ocular inspection its personnel for interview, and its records for examination at normal business hours.

Section 12. Revocation of Certificate of Compliance – Non-compliance with any of the requirements of sec. 31 of RA 6657, as implemented by this Implementing Guidelines shall be grounds for the revocation of the certificate of Compliance issued to the corporate landowner-applicant.

Section 13. Reservation Clause – Nothing herein shall be construed as precluding the PARC from making its own independent evaluation and assessment of the stock distribution plan of the corporate landowner-applicant and in prescribing other require -ments.

Section 14. Penalties – The provision of Section 73 and 74 with regards to prohibited Acts and Omissions, and Penalties, re -spectively shall apply to corporate landowner-applicants found to be violating the provision of these rules.

Section 15. Separability Clause – If, for any reason, any section or provision of these rules is declared null and void, no sec -tion, provision, or part thereof shall be affected and the same shall remain in full force and effect.

Section 16. Effectivity Clause – These rule shall take effect ten (10) days after publication in two national newspaper of general circulation.

I. Chapter IX (Support Services)

SEC. 35. Creation of Support Services Office. - There is hereby created the Office of Support Services under the DAR to be headed by an Undersecretary.

The office shall provide general support and coordinative services in the implementation of the program, particularly in carrying out the provisions of the following services to farmer beneficiaries and affected landowners:

(1)  Irrigation facilities, especially second crop or dry season irrigation facilities;

(2)  Infrastructure development and public works projects in areas and settlement that come under agrarian reform, and for this purpose, the preparation of the physical development plan of such settlements providing suitable barangay sites, potable water and power resources, irrigation systems, seeds and seedling banks, post harvest facilities, and other facilities for a sound agricultural development plan. For the purpose of providing the aforecited infrastructure and facilities, the DAR is authorized to enter into contracts with interested private parties on long term basis or through joint venture agreements or build-operate-transfer scheme:

(3) Government subsidies for the use of irrigation facilities

(4)  Price support and guarantee for all agricultural produce;

(5)  Extending to small landowners, farmers and farmers' organizations the necessary credit, like concessional and collateral-free loans, for agro-industrialization based on social collaterals like the guarantees of farmers' organizations;

(6)  Promoting, developing and extending financial assistance to small and medium-scale industries in agrarian reform areas;

(7)  Assigning sufficient numbers of agricultural extension workers to farmers' organization;

(8)  Undertake research, development and dissemination of information on agrarian reform, plants and crops best suited for cultivation and marketing, and low cost and ecologically sound farm inputs and technologies to minimize reliance on expensive and imported agricultural inputs;

(9)  Development of cooperative management skills through intensive training;chan robles virtual law library

(9)  Assistance in the identification of ready markets for agricultural produce and training in the other various aspects of marketing;

(10) Conduct and effective information dissemination system through the Department of Agriculture to promote marketing and minimize spoilage of agricultural produce and products;

(11)  Create a credit guarantee fund for agricultural landowners that will enhance the collateral value of agricultural lands that are affected or will be affected by coverage under the agrarian reform program; and

(12)  Administration, operation, management and funding of support services programs and projects including pilot projects and models related to agrarian reform as developed by the DAR.

SEC. 36. Funding for Support Services. - In order to cover the expenses and cost of support, at least twenty-five percent (25%) of all appropriations for agrarian reform shall immediately be set aside and made available for this purpose: Provided, That for the next five (5) years, a minimum of one (1) Agrarian Reform Community (ARC) shall be established by the DAR, in coordination with the local government units, non-governmental organizations and people's organizations in each legislative district with a predominant agricultural population: Provided, further, That the areas in which the ARCs are to be established shall have been fully subjected under this law.

For this purpose, an Agrarian Reform Community shall be defined as a barangay or a cluster of barangays primarily composed and managed by Agrarian Reform Beneficiaries who shall be willing to be organized and undertake the integrated development of an area and/or their organizations/cooperatives. In each community, the DAR, together with the agencies and organizations above mentioned, shall identify the farmers' association, cooperative or their respective federations approved by the farmers-beneficiaries that shall take the lead in the agricultural development of the area. In addition, the DAR shall be authorized to package proposals and receive grants, aids and other forms of financial assistance from any source.

SEC. 37. Support Services to the Beneficiaries. - The PARC shall ensure that support services to farmer-beneficiaries are provided, such as:

    (a) Land surveys and titling;     (b) Liberalized terms of credit facilities and production loans;     (c) Extension services by way of planting, cropping, production and post-harvest technology transfer as well as         marketing and management assistance and support to cooperatives and farmer organization;     (d) Infrastructure such as access trails, mini-dams, public utilities, marketing and storage facilities; and     (e) Research, production and use of organic fertilizers and other local substances necessary to farming and cultivation.

The PARC shall formulate policies to ensure that support services to farmer-beneficiaries shall be provided at all stages of land reform.

The Bagong Kilusang Kabuhayan sa Kaunlaran (BKKK) Secretariat shall be transferred and attached to the LBP, for its supervision, including all its applicable and existing funds, personnel, properties, equipment and records.   Misuse or diversion of the financial and support services herein provided shall result in sanction against the beneficiary guilty thereof, including the forfeiture of the land transferred to him or lesser sanctions as may be provided by the PARC, without prejudice to criminal prosecution.

SEC. 38. Support Services to Landowners. - The PARC, with the assistance of such other government agencies and instrumentalities as it may direct, shall provide landowners affected by the CARP and proper agrarian reform programs with the following services:

    (a) Investment information, financial and counseling assistance;

    (b) Facilities, programs and schemes for the conversion or exchange of bonds issued for payment of the lands acquired with stocks and bonds issued by the National Government, the central bank and other government institutions and instrumentalities;

    (c) Marketing of LBP bonds, as well as promoting the marketability of said bonds in traditional and non-traditional financial markets and stock exchanges;

    (d) Other services designed to utilize productively the proceeds of the sale of such lands for rural industrialization.  

A landowner who invests in rural-based industries shall be entitled to the incentives granted to a registered enterprise engaged in a pioneer or preferred area of investment as provided for in the Omnibus Investment Code of 1987, or to such other incentives as the PARC, the LBP, or other government financial institutions may provide.

The LBP shall redeem a landowner's LBP bonds at face value: Provided, that the proceeds thereof shall be invested in a BOI- registered company or in any agri-business or agro-industrial enterprise in the region where the landowner has previously made investments, to the extent of thirty percent (30%) of the face value of said LBP bonds, subject to guidelines that shall be issued by the LBP.

SEC. 39. Land Consolidation. - the DAR shall carry out land consolidation projects to promote equal distribution of landhold-

ings, to provide the needed infrastructure in agriculture, and to conserve soil fertility and prevent erosion.

Members:

Jumar

(From Start until Agricultural land Sec. 3[c])

Bacolod

(Agrarian Dispute) Thanks sa cases!!!

Maven

(From B. Chapter II until Exemptions from coverage Sec. 10) Thanks for being the earliest to pass!!!

Baby Lyn

(From Agricultural Land Sec. 11 until D. Chapter IV Registration)

RJ LIM

(Chapter V Land Acquisition) GGrrrr!!!!!

Faisal

(The rest of the topics)