agrarian cases

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G.R. No. 173085 : January 19, 2011 G.R. No. 173085 : January 19, 2011 PHILIPPINE VETERANS BANK,

PHILIPPINE VETERANS BANK, Petitioner ,, v. Petitioner v.BASES CONVERSIONBASES CONVERSION DEVELOPMENT

DEVELOPMENT AUTHORITY, LAND BANK OF THEAUTHORITY, LAND BANK OF THE PHILIPPINESPHILIPPINES , ARMANDO, ARMANDO SIMBILLO,

SIMBILLO, CHRISTIAN MARCELO, ROLANDODAVID, RICARDO BUCUD, PABLOCHRISTIAN MARCELO, ROLANDODAVID, RICARDO BUCUD, PABLO SANTOS,SANTOS, AGRIFINA ENRIQUEZ,

AGRIFINA ENRIQUEZ, CONRADO ESPELETA, CATGERUBECONRADO ESPELETA, CATGERUBE CASTRO, CARLITOCASTRO, CARLITO MERCADO

MERCADO and ALFREDO SUAREZ,and ALFREDO SUAREZ, Respondent Respondent .. This case is about the authority of the

This case is about the authority of the court in an expropriation case to adcourt in an expropriation case to adjudicate questions of ownership of thejudicate questions of ownership of the subject properties where such questions involve the determination of

subject properties where such questions involve the determination of the validity of the issuance to thethe validity of the issuance to the defendants of Certificates of Land Ownership Awards (CLOAs) and Emancipation P

defendants of Certificates of Land Ownership Awards (CLOAs) and Emancipation P atents (EPs), questions thatatents (EPs), questions that fall within the jurisdiction of the Department of Agrarian Reform Adjudication Board (DARAB).

fall within the jurisdiction of the Department of Agrarian Reform Adjudication Board (DARAB). The Facts and the Case

The Facts and the Case In late 2003 respondent Bases Conversion Developmen

In late 2003 respondent Bases Conversion Developmen t Authority (BCDA), a government corporation, filedt Authority (BCDA), a government corporation, filed several expropriation actions before the various branches of the

several expropriation actions before the various branches of the Regional Trial Court (RTC) of Angeles City,Regional Trial Court (RTC) of Angeles City, for acquisition of lands needed for the con

for acquisition of lands needed for the construction of the Subic-Clark-Tarlac Expressway Project. Ten of thesestruction of the Subic-Clark-Tarlac Expressway Project. Ten of these cases were raffled to Branch 58 of the

cases were raffled to Branch 58 of the courtcourt11cralaw and it is these that are the concern of the present petition.cralaw and it is these that are the concern of the present petition. The defendants in Branch 58

The defendants in Branch 58 cases were respondents Armando Simbillo, Christian Marcelo, Rolando cases were respondents Armando Simbillo, Christian Marcelo, Rolando David,David, Ricardo Bucud, Pablo Santos, Agrifina Enriquez, Con

Ricardo Bucud, Pablo Santos, Agrifina Enriquez, Con rado Espeleta, Catgerube Castro, Carlito Mercado, andrado Espeleta, Catgerube Castro, Carlito Mercado, and Alfredo Suarez. They were the registered owners of the

Alfredo Suarez. They were the registered owners of the expropriated lands that they acquired as benexpropriated lands that they acquired as beneficiaries ofeficiaries of the comprehensive agrarian reform program. Another defendant was

the comprehensive agrarian reform program. Another defendant was Land Bank of the Philippines, theLand Bank of the Philippines, the mortgagee of the lands by virtue o

mortgagee of the lands by virtue of the loans it extended for their acquisition. The f the loans it extended for their acquisition. The lands in these cases werelands in these cases were located in Porac and Floridablanca, Pampanga.

located in Porac and Floridablanca, Pampanga.

On learning of the expropriation cases before Branch

On learning of the expropriation cases before Branch 58, petitioner Philippine Veterans Bank (PVB) filed58, petitioner Philippine Veterans Bank (PVB) filed motions to intervene in all the cases with attached

motions to intervene in all the cases with attached complaints-in-intervention, a remedy that it adopted incomplaints-in-intervention, a remedy that it adopted in similar cases with the other branches. PVB alleged

similar cases with the other branches. PVB alleged that the covered properties actually belonged to that the covered properties actually belonged to BelmonteBelmonte Agro-Industrial Development Corp. which mortgaged the lands to PVB in

Agro-Industrial Development Corp. which mortgaged the lands to PVB in 1976. PVB had since 1976. PVB had since foreclosed onforeclosed on the mortgages and bought the same at public auction in 1982. Unfortunately, the bank had been unable to the mortgages and bought the same at public auction in 1982. Unfortunately, the bank had been unable to consolidate ownership in its name.

consolidate ownership in its name. But, in its order of August 18, 2004,

But, in its order of August 18, 2004,22cralaw Branch 58 denied PVB's motion for intervention on cralaw Branch 58 denied PVB's motion for intervention on the ground thatthe ground that the intervention amounts to a third-party complaint that is n

the intervention amounts to a third-party complaint that is n ot allowed in expropriation cases and thaot allowed in expropriation cases and that thet the intervention would delay the proceedings in the

intervention would delay the proceedings in the cases before it. Besides, said Branch 58, PVB hcases before it. Besides, said Branch 58, PVB h ad a pendingad a pending action for annulment of the titles issued to the individual d

action for annulment of the titles issued to the individual d efendants and this was pending before Branch efendants and this was pending before Branch 62 of62 of the court.

the court.

PVB filed its motion for reconsideration but Branch 58 d

PVB filed its motion for reconsideration but Branch 58 d enied the same, prompting the bank enied the same, prompting the bank to file a petitionto file a petition for

for certioraricertiorari with the Court of Appeals (CA). with the Court of Appeals (CA).33cralaw On January 26, 2006 the CA rendered a decision,cralaw On January 26, 2006 the CA rendered a decision, dismissing the petition for lack of merit.

dismissing the petition for lack of merit.44cralaw It also denied in a resolution dated June 2, 2006cralaw It also denied in a resolution dated June 2, 200655cralawPVB'scralawPVB's motion for reconsideration.

motion for reconsideration.

Meanwhile, on April 3, 2006 Branch

Meanwhile, on April 3, 2006 Branch 58 issued separate decisions in all 10 58 issued separate decisions in all 10 cases before it, granting thecases before it, granting the expropriation of the subject properties. The court noted

expropriation of the subject properties. The court noted the uncertainty as to the ownership of the uncertainty as to the ownership of such propertiessuch properties but took no action to grant BCDA's prayer in its complaint that it determine the question of ownership of the but took no action to grant BCDA's prayer in its complaint that it determine the question of ownership of the

same pursuant to Section 9, Rule

same pursuant to Section 9, Rule 67 of the Revised Rules o67 of the Revised Rules of Civil Procedure.f Civil Procedure.66cralawredlawcralawredlaw The Issue Presented

The Issue Presented The issue presented in this case is whether or not

The issue presented in this case is whether or not the CA erred in holding tthe CA erred in holding that PVB was not entitled to intervenehat PVB was not entitled to intervene in the expropriation cases before Branch 58 of the Angeles City RTC.

in the expropriation cases before Branch 58 of the Angeles City RTC. The Court's Ruling The Court's Ruling

PVB maintains that in deciding the case, the RTC and the CA ignored Section 9, Rule 67 of the 1997 Rules of PVB maintains that in deciding the case, the RTC and the CA ignored Section 9, Rule 67 of the 1997 Rules of Civil Procedure, which authorizes the court adjudicating the expropriation case to hear and decide conflicting Civil Procedure, which authorizes the court adjudicating the expropriation case to hear and decide conflicting claims regarding the ownership of the properties involved

claims regarding the ownership of the properties involved while the compensation for the exwhile the compensation for the expropriated propertypropriated property is in the meantime deposited with the court. S

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Sec. 9.

Sec. 9.UnceUncertain rtain owneownership; conflrship; confl icting claims icting claims . - If the ownership of the property taken is uncertain, or. - If the ownership of the property taken is uncertain, or there are conflicting claims to any part thereof, the court may order any sum or sums awarded as

there are conflicting claims to any part thereof, the court may order any sum or sums awarded as

compensation for the property to be paid to the court for the benefit of the person adjudged in the same compensation for the property to be paid to the court for the benefit of the person adjudged in the same proceeding to be entitled thereto. But the judgment shall require the payment of the sum or sums

proceeding to be entitled thereto. But the judgment shall require the payment of the sum or sums

awarded to either the defendant or the court before the plaintiff can enter upon the property, or retain it awarded to either the defendant or the court before the plaintiff can enter upon the property, or retain it for the public use or purpose if entry has already been made.

for the public use or purpose if entry has already been made. PVB's point regarding the authority of the court in

PVB's point regarding the authority of the court in expropriation cases to hear and expropriation cases to hear and adjudicate conflicting claimsadjudicate conflicting claims over the ownership of the lands invo

over the ownership of the lands involved in such cases is valid. But such lved in such cases is valid. But such rule obviously cannot apply rule obviously cannot apply to PVBto PVB for the following reasons:

for the following reasons: chanrob1esvirtwallawlibrarychanrob1esvirtwallawlibrary 1. At the time PVB tried to intervene

1. At the time PVB tried to intervene in the expropriation cases, its conflict with the in the expropriation cases, its conflict with the farmer beneficiaries whofarmer beneficiaries who held CLOAs, EPs, or TCTs emanating from such titles were alread

held CLOAs, EPs, or TCTs emanating from such titles were alread y pending before Angeles City RTC Branchy pending before Angeles City RTC Branch 62, a co-equal branch of the same court. Branch 58 had no authority to pre-empt Branch 62 of its power to hear 62, a co-equal branch of the same court. Branch 58 had no authority to pre-empt Branch 62 of its power to hear and adjudicate claims that were already pending before it.

and adjudicate claims that were already pending before it.

2. Of course, subsequently, after the CA dismissed PVB's petition on

2. Of course, subsequently, after the CA dismissed PVB's petition on January 26, 2006, the latter filed a January 26, 2006, the latter filed a motionmotion for reconsideration, pointing out that it had in

for reconsideration, pointing out that it had in the meantime already withdrawn the actions the meantime already withdrawn the actions it filed with Branchit filed with Branch 62 after learning from the decision of the Supreme Court in

62 after learning from the decision of the Supreme Court in Department of Agrarian Reform v. Department of Agrarian Reform v. Cuenca

Cuenca,,77cralaw that jurisdiction over cases involving the annulment of Ccralaw that jurisdiction over cases involving the annulment of C LOAs and EPs were vested byLOAs and EPs were vested by Republic Act 6657 in the

Republic Act 6657 in the DARAB.DARAB.88cralawredlawcralawredlaw PVB now points out that, since there

PVB now points out that, since there was no longer any impediment in RTC was no longer any impediment in RTC Branch 58 taking cognizance Branch 58 taking cognizance of itsof its motion for intervention and adjudicating the parties' conflicting claims over

motion for intervention and adjudicating the parties' conflicting claims over the expropriated properties, the CAthe expropriated properties, the CA was in error in not reconsidering its decision.

was in error in not reconsidering its decision.

But PVB's withdrawal of its actions from Branch 62 cannot

But PVB's withdrawal of its actions from Branch 62 cannot give Branch 58 comfort. As PVB itself insists,give Branch 58 comfort. As PVB itself insists, jurisdiction over the annulment of the individual defendants' CLOAs and EPs (which titles if annulled would jurisdiction over the annulment of the individual defendants' CLOAs and EPs (which titles if annulled would

leave PVB's titles to the lands unchallenged) lies

leave PVB's titles to the lands unchallenged) lies with the DARAB. Branch 58 would with the DARAB. Branch 58 would still have no power tostill have no power to adjudicate the issues of ownership presented by the

adjudicate the issues of ownership presented by the PVB's intervention.PVB's intervention.

Actually, PVB's remedy was to secure an order from Branch 58 to have the proceeds of the expropriation Actually, PVB's remedy was to secure an order from Branch 58 to have the proceeds of the expropriation deposited with that branch in the meantime,

deposited with that branch in the meantime, pending adjudication of the issues of ownership of the pending adjudication of the issues of ownership of the expropriatedexpropriated lands by the DARAB. Section 9

lands by the DARAB. Section 9 above empowers the court to order pabove empowers the court to order payment to itself of the proceeds of ayment to itself of the proceeds of thethe expropriation whenever questions of ownership are yet to b

expropriation whenever questions of ownership are yet to b e settled. There is no reason whe settled. There is no reason why this rule should noty this rule should not be applied even where the settlement of such questions is to be made by another tribunal.

be applied even where the settlement of such questions is to be made by another tribunal. WHEREFORE

WHEREFORE, the Court, the Court DENIESDENIES the petition and the petition andAFFIRMSAFFIRMS the decision of the Court of Appeals dated the decision of the Court of Appeals dated January 26, 2006 and its resolution dated June 2, 2006 in CA-G.R. SP 88144.

January 26, 2006 and its resolution dated June 2, 2006 in CA-G.R. SP 88144. SO ORDERED. SO ORDERED. Digested Digested FACTS: FACTS:

BCDA filed several expropriation actions before the branches of the

BCDA filed several expropriation actions before the branches of the RTC of Angeles City for the acqRTC of Angeles City for the acquisition ofuisition of lands needed to construct the

lands needed to construct the Subic-Clark-Tarlac Expressway (SCTEX). The defendants in this case are theSubic-Clark-Tarlac Expressway (SCTEX). The defendants in this case are the registered owners of the expropriated lands that they acquired

registered owners of the expropriated lands that they acquired as beneficiaries of the Comprehensive Agrarianas beneficiaries of the Comprehensive Agrarian Reform Program (CARP). Ten of these cases were

Reform Program (CARP). Ten of these cases were raffled off to Branch 58 of the RTC raffled off to Branch 58 of the RTC of Angeles City.of Angeles City. Upon learning of the expropriation cases filed, PVB

Upon learning of the expropriation cases filed, PVB filed a motion to intervene and filed a motion to intervene and alleged that the propertiesalleged that the properties actually belonged to Belmonte Agro-Industrial Development Corp. which mortgaged the lands to PVB in 1976. actually belonged to Belmonte Agro-Industrial Development Corp. which mortgaged the lands to PVB in 1976. PVB bought the land upo

PVB bought the land upon foreclosure but was not able to n foreclosure but was not able to consolidate ownership in its name. PVB's motion wasconsolidate ownership in its name. PVB's motion was denied on the ground that

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HELD: HELD:

No. Sec 9, Rule 67 of the Rules of

No. Sec 9, Rule 67 of the Rules of Civil Procedure empowers the court to order payment to itself of theCivil Procedure empowers the court to order payment to itself of the proceeds of the expropriation whenever questions of ownership are yet to be settled. At the time PVB tri proceeds of the expropriation whenever questions of ownership are yet to be settled. At the time PVB tried toed to

intervene, its conflict with the farmer beneficiaries were already pending b

intervene, its conflict with the farmer beneficiaries were already pending b efore another branch of RTC efore another branch of RTC AngelesAngeles City. Branch 58 had no

City. Branch 58 had no authority to pre-empt the other branch authority to pre-empt the other branch of its power to hear and adof its power to hear and adjudicate claims beforejudicate claims before it.

it.

PVB's withdrawal of its actions in the other branch because it was found that jurisdiction lies with the PVB's withdrawal of its actions in the other branch because it was found that jurisdiction lies with the Department of Agrarian Reform Adjudication Board (DARAB) will still leave Branch 58 with

Department of Agrarian Reform Adjudication Board (DARAB) will still leave Branch 58 with no power tono power to adjudicate the issues of ownership presented by PVB's intervention. P

adjudicate the issues of ownership presented by PVB's intervention. P VB's remedy is to secure an order fromVB's remedy is to secure an order from Branch 58 to have the proceeds of the expropriation deposited with that branch, pending the adjudication of Branch 58 to have the proceeds of the expropriation deposited with that branch, pending the adjudication of ownership by the DARAB.

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Republic of the Philippines Republic of the Philippines

Supreme Court Supreme Court Manila Manila THIRD DIVISION THIRD DIVISION REPUBLIC OF THE PHILIPPINES,

REPUBLIC OF THE PHILIPPINES, represented by the DEPARTMENT OF represented by the DEPARTMENT OF AGRARIAN REFORM, through the AGRARIAN REFORM, through the

HON. SECRETARY NASSER C.

PANGANDAMAN, PANGANDAMAN, Petitioner, Petitioner, versus versus

-SALVADOR N. LOPEZ

AGRI-SALVADOR N. LOPEZ

AGRI-BUSINESS CORP., represented by BUSINESS CORP., represented by SALVADOR N. LOPEZ, JR., President SALVADOR N. LOPEZ, JR., President

and General and General Manager, Manager, Respondent. Respondent. x x -x

xSALVADOR SALVADOR N. N. LOPEZ LOPEZ AGRI- AGRI-BUSINESS CORP., represented by BUSINESS CORP., represented by SALVADOR N. LOPEZ, JR., President SALVADOR N. LOPEZ, JR., President and General Manager,

and General Manager,

Petitioner, Petitioner, versus versus -DEPARTMENT OF AGRARIAN DEPARTMENT OF AGRARIAN

REFORM, through the Honorable REFORM, through the Honorable Secretary, Secretary, Respondent. Respondent. G.R. No. 178895 G.R. No. 178895 G.R. No. 179071 G.R. No. 179071 Present: Present: CARPIO MORALES, CARPIO MORALES, J., J., Chairperson, Chairperson, BRION, BRION, BERSAMIN, BERSAMIN, VILLARAMA, JR., and VILLARAMA, JR., and SERENO, SERENO, JJ. JJ. Promulgated: Promulgated: January 10, 2011 January 10, 2011 x- - - x- - - - - - -x- - - -x Before us are two Rule 45 Petition

Before us are two Rule 45 Petitionss[1][1] filed separately by the Department of Agrarian Reform (DAR),filed separately by the Department of Agrarian Reform (DAR), through the Office of the Solicitor General, and by the Salvador N. Lopez Agri-Business Corp. (SNLABC). through the Office of the Solicitor General, and by the Salvador N. Lopez Agri-Business Corp. (SNLABC). Each Petition partially assails the Court of Appeals Decision dated 30 June 2006

Each Petition partially assails the Court of Appeals Decision dated 30 June 2006[2][2] with respect to thewith respect to the application for exemption of four parcels of land located in Mati, Davao Oriental and owned by SNLABC application for exemption of four parcels of land located in Mati, Davao Oriental and owned by SNLABC -from Republic Act No. 6657, otherwise known

from Republic Act No. 6657, otherwise known as the Comprehensive Agrarian Reform Law (CARL).as the Comprehensive Agrarian Reform Law (CARL).

There is little dispute as to the facts of the case, as succinctly discussed by the Court of Appeals and There is little dispute as to the facts of the case, as succinctly discussed by the Court of Appeals and adopted herein by the Court,

adopted herein by the Court, to wit:to wit:

Subject of this petition are four (4) parcels of land with an aggregate area of 160.1161 Subject of this petition are four (4) parcels of land with an aggregate area of 160.1161 hectares registered in the name of Salvador N. Lopez Agri-Business Corporation. Said parcels of hectares registered in the name of Salvador N. Lopez Agri-Business Corporation. Said parcels of land are hereinafter described as follows:

land are hereinafter described as follows: Title

Title No. No. Area Area LocationLocation TCT

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On August 2, 1991, Municipal Agrarian Reform Officer (MARO) Socorro C. Salga On August 2, 1991, Municipal Agrarian Reform Officer (MARO) Socorro C. Salga issued a Notice of Coverage to petitioner with regards (sic) to the aforementioned landholdings issued a Notice of Coverage to petitioner with regards (sic) to the aforementioned landholdings which were subsequently placed under Compulsory Acquisition pursuant to R.A. 6657 which were subsequently placed under Compulsory Acquisition pursuant to R.A. 6657 (Comprehensive Agrarian Reform Law).

(Comprehensive Agrarian Reform Law). On

On December 10, December 10, 1992, petitioner 1992, petitioner filed with the filed with the Provincial Agrarian Reform Provincial Agrarian Reform OfficeOffice (PARO), Davao Oriental, an Application for Exemption of the lots covered by TCT No. T-12637 (PARO), Davao Oriental, an Application for Exemption of the lots covered by TCT No. T-12637 and T-12639 from CARP coverage. It alleged that pursuant to the case of

and T-12639 from CARP coverage. It alleged that pursuant to the case of Luz Luz Farms Farms v. v. DARDAR Secretary

Secretary said parcels of land are exempted from coverage as the said parcels of land with a total said parcels of land are exempted from coverage as the said parcels of land with a total area of 110.5455 hectares are used for grazing and habit

area of 110.5455 hectares are used for grazing and habitat of petitioner‘s 105 heads of cattle, 5at of petitioner‘s 105 heads of cattle, 5 carabaos, 11 horses, 9 heads of goats and 18 heads of swine, prior to the effectivity of the carabaos, 11 horses, 9 heads of goats and 18 heads of swine, prior to the effectivity of the Comprehensive Agrarian Reform Law (CARL).

Comprehensive Agrarian Reform Law (CARL).

On December 13, 1992 and March 1, 1993, the MARO conducted an onsite investigation On December 13, 1992 and March 1, 1993, the MARO conducted an onsite investigation on the two parcels of land confirming the presence of the livestock as enumerated. The on the two parcels of land confirming the presence of the livestock as enumerated. The Investigation Report datedMarch 9, 1993 stated:

Investigation Report datedMarch 9, 1993 stated:

That there are at least 2[5] to 30 heads of cows that farrow every year and That there are at least 2[5] to 30 heads of cows that farrow every year and if the trend of farrowing persist (sic), then the cattle shall become overcrowded if the trend of farrowing persist (sic), then the cattle shall become overcrowded and will result to scarcity of grasses for the cattle to graze;

and will result to scarcity of grasses for the cattle to graze;

That during the week cycle, the herds are being moved to the different That during the week cycle, the herds are being moved to the different adjacent lots owned by the corporation. It even reached Lot 1454-A and Lot 1296. adjacent lots owned by the corporation. It even reached Lot 1454-A and Lot 1296. Thereafter, the herds are returned to their respective night chute corrals which are Thereafter, the herds are returned to their respective night chute corrals which are constructed under Lot 1293-B and Lot 1298.

constructed under Lot 1293-B and Lot 1298. x x x x x x

That the age of coconut trees planted in the area are already 40 to 50 years That the age of coconut trees planted in the area are already 40 to 50 years and have been affected by the recent drought that hit the locality.

and have been affected by the recent drought that hit the locality.

That the presence of livestocks (sic) have already existed in the area prior That the presence of livestocks (sic) have already existed in the area prior to the Supreme Court decision on LUZ FARMS vs. Secretary of Agrarian to the Supreme Court decision on LUZ FARMS vs. Secretary of Agrarian Reform. We were surprised however, why the management of the corporation did Reform. We were surprised however, why the management of the corporation did not apply for Commercial Farm Deferment (CFD) before, when the two years not apply for Commercial Farm Deferment (CFD) before, when the two years reglamentary (sic) period which the landowner was given the chance to file their reglamentary (sic) period which the landowner was given the chance to file their application pursuant to R.A. 6657, implementing Administrative Order No. 16, application pursuant to R.A. 6657, implementing Administrative Order No. 16, Series of 1989;

Series of 1989;

However, with regards to what venture comes (sic) first, coconut or However, with regards to what venture comes (sic) first, coconut or livestocks (sic), majority of the farmworkers including the overseer affirmed that livestocks (sic), majority of the farmworkers including the overseer affirmed that the coconut trees and livestocks (sic) were (sic) simultaneously and all of these the coconut trees and livestocks (sic) were (sic) simultaneously and all of these were inherited by his (applicant) parent. In addition, the financial statement were inherited by his (applicant) parent. In addition, the financial statement showed 80% of its annual income is derived from the livestocks (sic) and only showed 80% of its annual income is derived from the livestocks (sic) and only 20% from the coconut industry.

20% from the coconut industry.

Cognitive thereto, we are favorably recommending for the

Cognitive thereto, we are favorably recommending for the exemption fromexemption from the coverage of CARP based on LUZ FARMS as enunciated by the Supreme the coverage of CARP based on LUZ FARMS as enunciated by the Supreme Court the herein Lot No. 1293-B Psd-65835 under TCT No. T-12639 Court the herein Lot No. 1293-B Psd-65835 under TCT No. T-12639 except Lot No. 1298, Cad. 286 of TCT No. T-12637 which is already covered except Lot No. 1298, Cad. 286 of TCT No. T-12637 which is already covered under the Compulsory Acquisition (CA) Scheme and had already been valued by under the Compulsory Acquisition (CA) Scheme and had already been valued by the Land Valuation Office, Land Bank of the Philippines.

the Land Valuation Office, Land Bank of the Philippines.

On June 24, 1993, TCT No. T-12635 covering Lots 1454-A & 1296 was cancelled and a On June 24, 1993, TCT No. T-12635 covering Lots 1454-A & 1296 was cancelled and a

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been

been operating operating grazing grazing lands lands even even prior to prior to June June 15, 15, 1988 1988 and and that the that the said said two two (2) lots (2) lots form anform an integral part of its grazing land.

integral part of its grazing land.

The DAR Regional Director, after inspecting the properties, issued an Order dated March The DAR Regional Director, after inspecting the properties, issued an Order dated March 5, 1997 denying the application for exemption of Lots 1454-A and 1296 on the ground that it 5, 1997 denying the application for exemption of Lots 1454-A and 1296 on the ground that it was not clearly shown that the same were actually, directly and exclusively used for livestock was not clearly shown that the same were actually, directly and exclusively used for livestock raising since in its application, petitioner itself admitted that it needs the lots for additional raising since in its application, petitioner itself admitted that it needs the lots for additional grazing area. The application for exemption, however of the other two (2) parcels of land was grazing area. The application for exemption, however of the other two (2) parcels of land was approved.

approved.

On its partial motion for reconsideration, petitioner argued that Lots 1454

On its partial motion for reconsideration, petitioner argued that Lots 1454 -A & 1296 were-A & 1296 were taken beyond the operation of the CARP pursuant to its reclassification to a Pollutive Industrial taken beyond the operation of the CARP pursuant to its reclassification to a Pollutive Industrial District (Heavy Industry) per Resolution No. 39 of the Sangguniang Bayan of Mati, Davao District (Heavy Industry) per Resolution No. 39 of the Sangguniang Bayan of Mati, Davao Oriental, enacted on April 7, 1992. The DAR Regional Director denied the Motion through an Oriental, enacted on April 7, 1992. The DAR Regional Director denied the Motion through an Order dated September 4, 1997, ratiocinating that the reclassification does not affect agricultural Order dated September 4, 1997, ratiocinating that the reclassification does not affect agricultural lands already issued a Notice of Coverage as provided in Memorandum Circular No. 54-93: lands already issued a Notice of Coverage as provided in Memorandum Circular No. 54-93: Prescribing the Guidelines Governing Section 20 of R.A. 7160.

Prescribing the Guidelines Governing Section 20 of R.A. 7160.

Undaunted, petitioner appealed the Regional Director‘s Orders to respondent DAR. Undaunted, petitioner appealed the Regional Director‘s Orders to respondent DAR. On

On June 10, 1998, the latter issued its assailed Order affirming the Regional Director‘s ruling onJune 10, 1998, the latter issued its assailed Order affirming the Regional Director‘s ruling on Lots 1454-A & 1296 and further declared Lots 1298 and 1293-B as covered by the CARP. Lots 1454-A & 1296 and further declared Lots 1298 and 1293-B as covered by the CARP. Respondent ruled in this wise considering the documentary evidence presented by petitioner such Respondent ruled in this wise considering the documentary evidence presented by petitioner such as the Business Permit to engage in livestock, the certification of ownership of large cattle and as the Business Permit to engage in livestock, the certification of ownership of large cattle and the Corporate Income Tax Returns, which were issued during the effectivity of the Agrarian the Corporate Income Tax Returns, which were issued during the effectivity of the Agrarian Reform Law thereby debunking petitioner‘s claim that it has been engaged in livestock farming Reform Law thereby debunking petitioner‘s claim that it has been engaged in livestock farming since the 1960s. Respondent further ruled that the incorporation by the Lopez family on February since the 1960s. Respondent further ruled that the incorporation by the Lopez family on February 12, 1988 or four (4) months before the effectivity of R.A. 6657 was an attempt to evade the 12, 1988 or four (4) months before the effectivity of R.A. 6657 was an attempt to evade the noble purposes of the said law.

noble purposes of the said law.

On October 17, 2002, petitioner‘s Motion for Reconsideration was denied by respondent On October 17, 2002, petitioner‘s Motion for Reconsideration was denied by respondent prompting the former to file the instant petition

prompting the former to file the instant petition..[3][3] In the assailed Decision

In the assailed Decision dated 30 June 2006dated 30 June 2006,,[4][4] the Court of Appeals partially granted the SNLABCthe Court of Appeals partially granted the SNLABC Petition and excluded the two

Petition and excluded the two (2) parcels of land (Transfer Certificate of Title [TCT] Nos. T-12637 (2) parcels of land (Transfer Certificate of Title [TCT] Nos. T-12637 and T-and T-12639) located in Barrio Don Enrique Lopez (the ―Lopez lands‖) from coverage of

12639) located in Barrio Don Enrique Lopez (the ―Lopez lands‖) from coverage of the CARL. However, itthe CARL. However, it upheld the Decisions of the Regional Directo

upheld the Decisions of the Regional Director r [5][5] and the DAR and the DAR [6][6] Secretary denying the application forSecretary denying the application for exemption with respect to Lots 1454-A and

exemption with respect to Lots 1454-A and 1296 (previously under TCT No. 1296 (previously under TCT No. T-12635) in Barrio Limot (theT-12635) in Barrio Limot (the ―Limot lands‖). These lots were already covered b

―Limot lands‖). These lots were already covered b y a new title under the ny a new title under the name of the Republicame of the Republic of of the Philippines (RP T-16356).

the Philippines (RP T-16356).

The DAR and SNLABC separately sought a partial reconsideration of the assailed Decision

The DAR and SNLABC separately sought a partial reconsideration of the assailed Decision of the Courtof the Court of Appeals, but their motions for reconsideration were subsequently denied in the Court of Appeals of Appeals, but their motions for reconsideration were subsequently denied in the Court of Appeals Resolution

Resolution dated 08 June 2007dated 08 June 2007..[7][7]

The DAR and SNLABC elevated the matter to this Court by filing separate Rule 45 Petitions (docketed The DAR and SNLABC elevated the matter to this Court by filing separate Rule 45 Petitions (docketed as G.R. No. 178895

as G.R. No. 178895[8][8] and 179071and 179071,,[9][9] respectively), which were subsequently ordered consolidated by the respectively), which were subsequently ordered consolidated by the Court.Court. The main issue for resolution by the Court is whether the Lopez and Limot lands of SNLABC can be The main issue for resolution by the Court is whether the Lopez and Limot lands of SNLABC can be considered grazing lands for its livestock business and are thus exempted from the coverage of the CARL under considered grazing lands for its livestock business and are thus exempted from the coverage of the CARL under the Court‘s

the Court‘s ruling inruling in Luz Farms v. Luz Farms v. DARDAR..[10][10]The DAR questions the disposition of the Court of Appeals, insofarThe DAR questions the disposition of the Court of Appeals, insofar as the latter allowed the exemption of the Lopez lands, while SNLABC assails the inclusion of the Limot lands as the latter allowed the exemption of the Lopez lands, while SNLABC assails the inclusion of the Limot lands within the coverage of the CARL.

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are several recognized exceptions wherein the Court has found it appropriate to re-examine the evidence are several recognized exceptions wherein the Court has found it appropriate to re-examine the evidence presented

presented..[12][12] In this case, the factual findings of the DAR Regional Director, the DAR Secretary and the CA areIn this case, the factual findings of the DAR Regional Director, the DAR Secretary and the CA are contrary to one another with respect to the following issue: whether the Lopez lands were actually, directly and contrary to one another with respect to the following issue: whether the Lopez lands were actually, directly and exclusively used for SNLABC‘s livestock busine

exclusively used for SNLABC‘s livestock business; and whether there was intent to evade coverage from thess; and whether there was intent to evade coverage from the Comprehensive Agrarian Reform Program (CARP) based on the documentary evidence. On the other hand, Comprehensive Agrarian Reform Program (CARP) based on the documentary evidence. On the other hand, SNLABC argues that these authorities misapprehended and overlooked certain relevant and undisputed facts as SNLABC argues that these authorities misapprehended and overlooked certain relevant and undisputed facts as regards the inclusion of the Limot lands under the CARL. These circumstances fall within the recognized regards the inclusion of the Limot lands under the CARL. These circumstances fall within the recognized exceptions and, thus, the Court is persuaded to review the facts and evidence on record in the disposition of exceptions and, thus, the Court is persuaded to review the facts and evidence on record in the disposition of these present Petitions.

these present Petitions.

Th

Th e Lopee Lopez z lanlan ds ds of SNLof SNL ABAB C are acC are actualtual ly and dily and di rr eectly bectly beinin g useg used for d for lili vevesstocktock and ar

and ar e e thth us eus exemptexempted frd fr om thom the e covecoverrage age of tof the CARLhe CARL ..

Briefly stated, the DAR questions the object or autoptic evidence relied upon by the DAR Regional Briefly stated, the DAR questions the object or autoptic evidence relied upon by the DAR Regional Director in concluding that th

Director in concluding that the Lopez lands were actually, directly and exclusively being used for SNLABC‘se Lopez lands were actually, directly and exclusively being used for SNLABC‘s livestock business prior to the enactment of the CARL.

livestock business prior to the enactment of the CARL. In

In Luz Luz Farms v. Farms v. Secretary Secretary of of the the Department Department of of Agrarian Agrarian ReformReform,,[13][13]the Court declared unconstitutionalthe Court declared unconstitutional the CARL provision

the CARL provisionss[14][14]that included lands devoted to livestock under the coverage of the CARP. Thethat included lands devoted to livestock under the coverage of the CARP. The transcripts of the deliberations of the Constitutional Commission of 1986 on the meaning of the word transcripts of the deliberations of the Constitutional Commission of 1986 on the meaning of the word "agricultural" showed that it was never the intention of the framers of the Constitution to include the livestock "agricultural" showed that it was never the intention of the framers of the Constitution to include the livestock and poultry industry in the coverage of the constitutionally mandated agrarian reform program of the and poultry industry in the coverage of the constitutionally mandated agrarian reform program of the government

government..[15][15] Thus, lands devoted to the raising of livestock, poultry and swine have been classified asThus, lands devoted to the raising of livestock, poultry and swine have been classified as industrial, not agricultural, and thus exempt from agrarian reform

industrial, not agricultural, and thus exempt from agrarian reform..[16][16]

Under the rules then prevailing, it was the Municipal Agrarian Reform Officer (MARO) who was Under the rules then prevailing, it was the Municipal Agrarian Reform Officer (MARO) who was primarily responsible for

primarily responsible for investigating the legal investigating the legal status, type and status, type and areas of thareas of the land e land sought to sought to be excludedbe excluded;;[17][17]andand for ascertaining whether the area subject of the application for exemption had been devoted to livestock-raising for ascertaining whether the area subject of the application for exemption had been devoted to livestock-raising as of 15 June 1988

as of 15 June 1988..[18][18] The MARO‘s authority to investigate has subsequently been replicated in the currentThe MARO‘s authority to investigate has subsequently been replicated in the current DAR guidelines regarding lands that are actually, directly and exclusively used for livestock raising

DAR guidelines regarding lands that are actually, directly and exclusively used for livestock raising..[19][19]As theAs the primary

primary official official in in charge charge of of investigating investigating the the land land sought sought to to be be exempted exempted as as livestock livestock land, land, the the MARO‘sMARO‘s findings on the use and nature of the land, if supported by substantial evidence on record, are to be accorded findings on the use and nature of the land, if supported by substantial evidence on record, are to be accorded greater weight, if not finality.

greater weight, if not finality.

Verily, factual findings of administrative officials and agencies that have acquired expertise in the Verily, factual findings of administrative officials and agencies that have acquired expertise in the performance of their official duties and the exercise of their primary jurisdiction are generally accorded not only performance of their official duties and the exercise of their primary jurisdiction are generally accorded not only

respect but, at times, even finality if such findings are supported by substantial evidence

respect but, at times, even finality if such findings are supported by substantial evidence..[20][20] The Court generallyThe Court generally accords great respect, if not finality, to factual findings of administrative agencies because of their special accords great respect, if not finality, to factual findings of administrative agencies because of their special knowledge and expertise over matters falling under

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case. Contrary to DAR‘s claims, the lack of information as regards the initial breeders and the specific date case. Contrary to DAR‘s claims, the lack of information as regards the initial breeders and the specific date when the cattle were first introduced in

when the cattle were first introduced in the MARO‘s Report does not conclusively demonstrate that there wasthe MARO‘s Report does not conclusively demonstrate that there was no livestock-raising on the Lopez lands prior to the CARL. Although information as to these facts are no livestock-raising on the Lopez lands prior to the CARL. Although information as to these facts are significant, their non-appearance in the reports does not leave the MARO without any other means to ascertain significant, their non-appearance in the reports does not leave the MARO without any other means to ascertain the duration of livestock-raising on the Lopez lands, such as interviews with farm workers, the presence of the duration of livestock-raising on the Lopez lands, such as interviews with farm workers, the presence of livestock infrastructure, and evidence of sales of cattle

livestock infrastructure, and evidence of sales of cattle – – all of which should have formed part of the MARO‘sall of which should have formed part of the MARO‘s Investigation Report.

Investigation Report.

Hence, the Court looks with favor on the expertise of the MARO in determining whether Hence, the Court looks with favor on the expertise of the MARO in determining whether livestock-raising on the Lopez lands has only been recently conducted or has been a going concern for several years raising on the Lopez lands has only been recently conducted or has been a going concern for several years already. Absent any clear showing of grave abuse of discretion or bias, the findings of the MARO - as affirmed already. Absent any clear showing of grave abuse of discretion or bias, the findings of the MARO - as affirmed by

by the the DAR DAR Regional Regional Director Director - - are are to to be be accorded accorded great great probative probative value, value, owing owing to to the the presumption presumption ofof regularity in the performance of his official duties

regularity in the performance of his official duties..[23][23] The DAR, however, insisted in its Petition

The DAR, however, insisted in its Petition[24][24]on giving greater weight to the inconsistencies appearing inon giving greater weight to the inconsistencies appearing in the documentary evidence presented, and noted by the DAR Secretary, in order to defeat SNLABC‘s claim of the documentary evidence presented, and noted by the DAR Secretary, in order to defeat SNLABC‘s claim of exemption over the Lopez lands. The Court is not so persuaded.

exemption over the Lopez lands. The Court is not so persuaded.

In the Petition, the DAR argued that that the tax declarations covering the Lopez lands characterized them In the Petition, the DAR argued that that the tax declarations covering the Lopez lands characterized them as agricultural lands and, thus, detracted from the claim that they were used for livestock purposes. The Court as agricultural lands and, thus, detracted from the claim that they were used for livestock purposes. The Court has since held that ―there is no law or jurisprudence that holds that the land

has since held that ―there is no law or jurisprudence that holds that the land classification embodied in the taxclassification embodied in the tax declarations is conclusive and final nor would proscribe any further inquiry‖; hence, ―tax declarations are declarations is conclusive and final nor would proscribe any further inquiry‖; hence, ―tax declarations are clearly not the sole basis of the classification of a land.‖

clearly not the sole basis of the classification of a land.‖[25][25] Applying the foregoing principles, the taxApplying the foregoing principles, the tax declarations of the Lopez lands as agricultural lands are not conclusive or final, so as to prevent their exclusion declarations of the Lopez lands as agricultural lands are not conclusive or final, so as to prevent their exclusion from CARP coverage as lands devoted to

livestock-from CARP coverage as lands devoted to livestock-raising. Indeed, the MARO‘s onraising. Indeed, the MARO‘s on-site inspection and actual-site inspection and actual investigation showing that the Lopez lands were being used for livestock-grazing are more convincing in the investigation showing that the Lopez lands were being used for livestock-grazing are more convincing in the determination of the nature of those lands.

determination of the nature of those lands. Neither can the DAR in the in

Neither can the DAR in the instant case assail the timing of the incorporation of SNLABC and the latter‘sstant case assail the timing of the incorporation of SNLABC and the latter‘s operation shortly

operation shortly before the enactbefore the enactment of the ment of the CARL. CARL. That persons That persons employ tactics employ tactics to precipitously to precipitously convert theirconvert their lands from agricultural use to industrial livestock is not unheard of; they even exploit the creation of a new lands from agricultural use to industrial livestock is not unheard of; they even exploit the creation of a new corporate vehicle to operate the livestock business to substantiate the deceitful conversion in the hopes of corporate vehicle to operate the livestock business to substantiate the deceitful conversion in the hopes of evading CARP coverage. Exemption from CARP, however, is directly a function of the land‘s usage, and n evading CARP coverage. Exemption from CARP, however, is directly a function of the land‘s usage, and not ofot of the identity of the entity operating it. Otherwise stated, lands actually, directly and exclusively used for the identity of the entity operating it. Otherwise stated, lands actually, directly and exclusively used for livestock are exempt from CARP coverage, regardless of the change of owner

livestock are exempt from CARP coverage, regardless of the change of owner ..[26][26]In the instant case, whetherIn the instant case, whether SNLABC was incorporated prior to the CARL is immaterial, since the Lopez lands were already being used for SNLABC was incorporated prior to the CARL is immaterial, since the Lopez lands were already being used for livestock-grazing purposes prior to the enactment of the CARL, as found by the MARO. Although the livestock-grazing purposes prior to the enactment of the CARL, as found by the MARO. Although the managing entity had been changed, the business interest of raising livestock on the Lopez lands still remained managing entity had been changed, the business interest of raising livestock on the Lopez lands still remained without any indication that it was initiated after the effectivity of the C

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not adduce any proof to show that the coconut trees on the Lopez lands were used for agricultural business, as not adduce any proof to show that the coconut trees on the Lopez lands were used for agricultural business, as required by the Court in

required by the Court in DAR v. Uy DAR v. Uy,,[28][28] wherein we ruled thus:wherein we ruled thus:

It is not uncommon for an enormous landholding to be intermittently planted with trees, It is not uncommon for an enormous landholding to be intermittently planted with trees, and this would not necessarily detract it from the purpose of livestock farming and be and this would not necessarily detract it from the purpose of livestock farming and be immediately considered as an agricultural land. It would be surprising if there were no trees on immediately considered as an agricultural land. It would be surprising if there were no trees on the land.

the land. Also, petitioner did Also, petitioner did not adduce any proof to snot adduce any proof to show that the coconut trees were how that the coconut trees were plantedplanted by

by respondent respondent and and used used for for agricultural agricultural business business or or were were already already existing existing when when the the land land waswas purchased in

purchased in 1979. In 1979. In the present the present case, the case, the area planted area planted with coconut with coconut trees bears an trees bears an insignificantinsignificant value to the area used for the cattle and other livestock-raising, including the infrastructure value to the area used for the cattle and other livestock-raising, including the infrastructure needed for the business. There can be no presumption, other than that the ―coconut area‖ is needed for the business. There can be no presumption, other than that the ―coconut area‖ is indeed used for shade and to augment the supply of fodder during the warm months; any other indeed used for shade and to augment the supply of fodder during the warm months; any other use would be only be incidental to livestock farming. The substantial quantity of livestock heads use would be only be incidental to livestock farming. The substantial quantity of livestock heads could only mean that respondent is engaged in farming for this purpose. The single conclusion could only mean that respondent is engaged in farming for this purpose. The single conclusion gathered here is that the land is entirely devoted to livestock farming and exempted from the gathered here is that the land is entirely devoted to livestock farming and exempted from the CARP.

CARP.

On the assumption that five thousand five hundred forty-eight (5,548) coconut trees were existing on the On the assumption that five thousand five hundred forty-eight (5,548) coconut trees were existing on the Lopez land (TCT No. T-12637), the DAR did not refute the findings of the MARO that these coconut trees Lopez land (TCT No. T-12637), the DAR did not refute the findings of the MARO that these coconut trees were merely incidental. Given the number of livestock heads of SNLABC, it is not surprising that the areas were merely incidental. Given the number of livestock heads of SNLABC, it is not surprising that the areas planted with coconut trees

planted with coconut trees on the Lopez on the Lopez lands where forage grass grew were lands where forage grass grew were being used as grazing being used as grazing areas for theareas for the livestock. It was never sufficiently adduced that SNLABC was primarily engaged in agricultural business on the livestock. It was never sufficiently adduced that SNLABC was primarily engaged in agricultural business on the Lopez lands, specifically,

coconut-Lopez lands, specifically, coconut-harvesting. Indeed, the substantial quantity of SNLABC‘s livestockharvesting. Indeed, the substantial quantity of SNLABC‘s livestock amounting to a little over one hundred forty (140) livestock heads, if measured against the combined 110.5455 amounting to a little over one hundred forty (140) livestock heads, if measured against the combined 110.5455 hectares of land and applying the DAR-formulated ratio, leads to no other conclusion than that the Lopez lands hectares of land and applying the DAR-formulated ratio, leads to no other conclusion than that the Lopez lands were exclusively devoted to livestock farming

were exclusively devoted to livestock farming..[29][29]

In any case, the inconsistencies appearing in the documentation presented (albeit sufficiently explained) In any case, the inconsistencies appearing in the documentation presented (albeit sufficiently explained) pale

pale in in comparison comparison to to the the positive positive assertion assertion made made by by the the MARO MARO in in its its on-site, on-site, actual actual investigation investigation - - that that thethe Lopez lands were being used actually, directly and exclusively for its livestock-raising business. The Court Lopez lands were being used actually, directly and exclusively for its livestock-raising business. The Court affirms the findings of the DAR Regional Director and the Court of Appeals that the Lopez lands were actually, affirms the findings of the DAR Regional Director and the Court of Appeals that the Lopez lands were actually, directly and exclusively bei

directly and exclusively being used for SNLABC‘s livestock business and, thus, are exempt from CARPng used for SNLABC‘s livestock business and, thus, are exempt from CARP coverage.

coverage.

Th

Th e e LL imim ot lands ot lands of SNLof SNL ABAB C are C are not actuallnot actuall y ay and dirnd dir eectly bectly beinin g usg useed ford for lili vevesstock antock and sd shouhou lld thud thu s s be be covecoverr eed by the CARLd by the CARL ..

In contrast, the Limot lands were found to be agricultural lands devoted to coconut trees and rubber and In contrast, the Limot lands were found to be agricultural lands devoted to coconut trees and rubber and are thus not subject to exemption from CARP coverage.

are thus not subject to exemption from CARP coverage.

In the Report dated 06 April 1994, the team that conducted the inspection found that the entire Limot In the Report dated 06 April 1994, the team that conducted the inspection found that the entire Limot

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