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G.R. No. 146061 August 31, 2006

SUMALO HOMEOWNERS ASSOCIATION OF HERMOSA, BATAAN, Petitioner,

vs.
JAMES T. LITTON, EMMA L. LAPERAL, GLORIA L. DEL RIO, GEORGE T. LITTON, JR., GRACE
L. GALLEGO and the HEIRS OF EDWARD T. LITTON, Respondents.

DECISION

YNARES-SANTIAGO, J.:

Assailed in this Petition for Review on certiorari is the June 16, 2000 Decision1 of the Court of Appeals
in CA-G.R. SP No. 52014 reversing the Resolution of the Office of the President dated September 4,
1998 (Zamora Resolution) and reinstating the Resolution dated June 16, 1997 (Torres Resolution), as
well as the October 23, 2000 Resolution2 denying the motion for reconsideration.

The factual antecedents are as follows:

On August 16, 1989, respondents filed with the Department of Agrarian Reform (DAR) a voluntary
offer to sell (VOS) their property located in Bgy. Sumalo, Hermosa, Bataan, consisting of three
contiguous parcels of land, with an aggregate area of 213.6189 hectares and covered by Transfer
Certificate of Title (TCT) Nos. 80135, 80136, 80137.3 On August 26, 1991, the DAR Region III Office
issued a Notice of Acquisition4 informing the respondents that the DAR will only acquire 42.4034
hectares of the property. Thereafter, on July 6, 1993, the Provincial Agrarian Reform Officer (PARO)
informed the respondents that DAR would acquire 45.3789 hectares at P1.17 per square meter or a
total purchase price of P529,414.68.

Notwithstanding receipt of the DAR’s offer of purchase, respondent withdrew their VOS and applied
for the conversion of the property from agricultural use to industrial, commercial and residential uses.
Respondents opted for conversion due to the enactment of Republic Act (R.A.) No. 7227 or The Bases
Conversion and Development Act of 1992,5 providing for the creation of a Special Economic and Free
Port Zone in an area consisting of Olongapo City, Subic in Zambales and parts of the municipalities
of Morong and Hermosa in the Province of Bataan, and the declaration by the Sangguniang Bayan of
Hermosa and the Sangguniang Panlalawigan of Bataan that the Hermosa Agro-Industrial Estate, a
property contiguous to the land of the respondents, is an industrial area.6 Likewise, the Department of
Agriculture (DA) has determined that respondents’ property is not economically suitable for agricultural
production7 and that there is no tenurial relationship between them and the occupants of the property.
The respondents further alleged that the construction of light structures in the areas adjacent to their
property, as well as the proposed Subic Bay Metropolitan Authority (SBMA) National Highway thru
their property warrant the application for reclassification.

On May 14, 1996, DAR Secretary Ernesto D. Garilao denied8 respondents’ application for conversion
of the property. The motion for reconsideration was likewise denied on September 18, 1996, hence
respondents appealed to the Office of the President docketed as O.P. Case No. 97-A-7020. During
the pendency of O.P. Case No. 97-A-7020, the Sangguniang Bayan of Hermosa, Bataan issued
Ordinance No. 96004 reclassifying the area which includes the subject properties from agricultural to
industrial zone.

On June 16, 1997, the Office of the President, through Executive Secretary Ruben D. Torres issued a
Resolution9disposing respondents’ appeal as follows:

WHEREFORE, pursuant to the spirit and intent of RA No. 6557, the Orders dated 14 May 1996 and
18 September 1996 by the Honorable Secretary of Agrarian Reform, are hereby SET ASIDE.
 Page |2

Accordingly, the application for conversion of the entire 213.6819 hectare property of the applicants-
appellants located at Bgy. Sumalo, Hermosa, Bataan is hereby APPROVED.

SO ORDERED.10

Aggrieved by the issuance of the Torres Resolution, the petitioners sought a reconsideration of the
same. The Office of the President, this time represented by Executive Secretary Ronaldo B. Zamora,
issued on September 4, 1998 a Resolution11 giving due course to the motion for reconsideration of the
petitioners. The dispositive portion of the Zamora Resolution reads:

WHEREFORE, the instant motion for reconsideration is hereby given due course, and the Resolution
of this Office dated June 16, 1997 is hereby REVERSED. The orders of the Secretary of Agrarian
Reform dated May 14, 1996 and September 18, 1996, are hereby REINSTATED.

SO ORDERED.12

Respondents appealed by way of a petition for review13 under Rule 43 of the Rules of Court with the
Court of Appeals which rendered the assailed decision which reads:

WHEREFORE, the OP Resolution dated September 4, 1998 (Zamora Resolution) is hereby

REVERSED and SET ASIDE, and the OP Resolution dated June 16, 1997 (Torres Resolution) is
REINSTATED.

SO ORDERED.14

Petitioners’ motion for reconsideration was denied15 hence the present petition raising the following
issues:

WHETHER THE COURT OF APPEALS CORRECTLY HELD THAT THE PETITIONERS ARE NOT
REAL PARTIES IN INTEREST TO THE CASE.

WHETHER THE COURT OF APPEALS CORRECTLY ANCHORED ITS ASSAILED DECISION ON

THE CASE OF FORTICH v. CORONA.

In the case of Fortich v. Corona,16 the Office of the President issued on March 29, 1996 through
Executive Secretary Ruben D. Torres a resolution approving the conversion of 144-hectare land from
agricultural to agro-industrial/institutional area. The decision was met with vehement opposition by
some alleged farmer beneficiaries which culminated in a dramatic and well publicized hunger strike
that caught nationwide attention. This led to the issuance by the Office of the President, through then
Deputy Executive Secretary Renato C. Corona, of the so-called "Win-Win" Resolution on November
7, 1997 substantially modifying the decision rendered by Executive Secretary Torres after it had
already become final and executory. The "Win-Win" Resolution approved the conversion to agro-
industrial area only to the extent of 44 hectares, and ordered the remaining 100 hectares to be
distributed to qualified farmer beneficiaries.

Aggrieved by the issuance of the "Win-Win" Resolution, the petitioners are now before us in a special
civil action for certiorari and prohibition. Finding merit in the contentions raised by the petitioners, we
ruled that the "Win-Win" Resolution which substantially modified the March 29, 1996 Decision after it
has attained finality, is void.17

As regards the standing of the purported farmer-beneficiaries who sought to intervene in the said case
the recognized rule in this jurisdiction is that a real party in interest is a party who would be benefited
or injured by the judgment or is the party entitled to the avails of the suit.18 Interest within the meaning
of the rule means material interest, an interest in issue and to be affected by the decree, as
 Page |3

distinguished from mere interest in the question involved, or a more incidental interest.19 Real
Interest means a present substantial interest, as distinguished from a mere expectancy or a future,
contingent, subordinate or consequential interest.20

The petitioners in the instant case claim that they have been identified as qualified beneficiaries of the
Litton property under the Comprehensive Agrarian Reform Program (CARP) citing Section 22 of R.A.
No. 6657 or the Comprehensive Agrarian Reform Law of 1988 (CARL):21

SEC. 22. Qualified Beneficiaries. – The lands covered by the CARP shall be distributed as much as
possible to landless residents of the same barangay, 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 farm workers;

(c) seasonal farm workers;

(d) other farm workers;

(e) actual tillers or occupants of public lands;

(f) collective or cooperatives of the above beneficiaries; and

(g) others directly working on the land.

Petitioners claim that while they may not qualify either as agricultural lessees, share tenants, regular
farm workers, seasonal farm workers, or as actual tillers or occupants of public lands, they allegedly
fall within the ambit of the definition of "other farm workers", "collective or cooperative of the above
beneficiaries", and "others directly working on the land". They claim that in the absence of lessees,
tenants, farm workers or actual tillers, those directly working on the land become qualified as
beneficiaries. They also allege that they have been working on the Litton property for a long time.

The petition lacks merit.

The claim that they have been working on the Litton property as farm workers is contradicted by the
Ocular Inspection Report22 prepared by the DA Region III Office. The report not only recommended
that the Litton property is best suited for purposes other than agricultural production, it also observed
that the only notable developments on the property are residential houses, roads and recreational
facilities. The ocular inspection report did not mention any agricultural developments to support the
contention of the petitioners that they have been actually working on the land. If petitioners have
indeed worked on Litton property for some time, the fruits of such endeavor should have been manifest
and easily noticed by the DA representatives who conducted the ocular inspection. Moreover, the
December 14, 1994 certification23 of the Municipal Agrarian Reform Office (MAR) of Hermosa, Bataan
stated that the subject properties are untenanted. Further, in the Certification24 issued on May 2, 1994,
the DA Region III Office observed that 60% of the Litton Property is under shubland/grassland and the
remaining 40% is utilized for residential, institutional, roads, orchard and sporadic small areas
cultivated to vegetables. The issuance of these public documents carry with it the presumption of
regularity which we cannot disregard in the absence of evidence to the contrary.25

Petitioners also failed to substantiate the claim that they have been identified as qualified beneficiaries
of the Litton property under the CARP. The CARL is specific in its requirements for registering qualified
beneficiaries:
 Page |4

SEC. 15. – The DAR in coordination with the Barangay Agrarian Reform Committee (BARC) as
Registration of Benefici aries .

organized in this Act, shall register all agricultural lessees, tenants and farm workers 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.

Aside from their self-serving assertions, the records is devoid of proof that the petitioners have been
identified and registered as qualified beneficiaries. The findings of the Torres Resolution are quite
revealing:

The thriving farming community adverted to by the Honorable DAR Secretary in his Order is in reality
not composed of tenants of the Littons but mere occupants of homelots without their consent, who use
the property primarily for residential purposes and commercial activities and who have been subject
of ejectment suits by the Littons.

We find the opposition raised by the Sumalo Homeowners Association to the application for conversion
to be bereft of substance. It appears that the oppositors are not farmers-tillers but occupants of
homelots and are the same defendants in the ejectment suit. x x x.26

From the foregoing, it is clear that petitioners, whose claim of being qualified beneficiaries is self-
serving and bereft of basis, are not real parties in interest in this case. As held in Fortich v. Corona:27

With respect to the motion for reconsideration filed by the applicants for intervention, we likewise find
the same unmeritorious. The issue of the applicant’s right to intervene in this proceedings should be
laid to rest. The rule in this jurisdiction is that a party who wishes to intervene must have a "certain
right" or "legal interest" in the subject matter of the litigation. Such interest must be "actual, substantial,
material, direct and immediate, and not simply contingent and expectant."

Here, the applicants for intervention categorically admitted that they were not tenants x x x but were
merely seasonal farmworkers in a pineapple plantation on the subject land which was under lease for
ten (10) years to the Philippine Packing Corporation. Respondent, then DAR Secretary Ernesto
Garilao, also admitted in his Order of June 7, 1995 that "the subject land is neither tenanted nor validly
covered for compulsory acquisition x x x."

Under Section 4, Article XIII of the 1987 Constitution, the right to own directly or collectively the land
they till belongs to the farmers and regular farmworkers who are landless, and in the case of other
farmworkers, the latter are entitled to receive a just share of the fruits" of the land. The pertinent portion
of the aforecited constitutional provision mandates:

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. x x x. (Emphasis supplied)
 Page |5

Commenting on the above-quoted provision, the eminent constitutionalist, Fr. Joaquin G. Bernas, S.J.,
one of the framers of the 1987 Constitution, declares that under the agrarian reform program the
equitable distribution of the land is a right given to landless farmers and regular farmworkers to own
the land they till, while the other or seasonalfarmworkers are only entitled to a just share of the fruits
of the land.

Thus, the Court of Appeals correctly found that petitioners in the instant case are not real parties in
interest, to wit:

In the case at bench, the members of respondent Sumalo make no pretense that they are agricultural
lessees or tenants or employees or laborers in an agricultural enterprise or farm of the petitioners, for
the latter have none, much less are they (Sumalo members) the owners of the subject property. In
their protest to the petitioner’s application for conversion they merely averred "clearing, tilling and
planting the land under claim of ownership." But the fact is that the parcels of land are titled in the
names of the petitioners.

Accordingly, the members of Sumalo can never be considered as farmers or farmworkers, much less
regular farmworkers, under the Comprehensive Agrarian Reform Law as conceived in the Constitution.
Then DAR Secretary Ernesto P. Garilao, in his Order denying the [respondents’] conversion
application, described the members of Sumalo as mere "occupants of the subject area" and never as
farmers or farmworkers. They are, therefore completely wanting of the actual, substantial, material,
direct and immediate and not simply contingent and expectant," interest that would qualify them as a
real party in interest under the standard set forth in the Fortich case. x x x.28

Since petitioners failed to establish their standing as real parties in interest, they have no personality
to assail the Torres Resolution. As earlier stated, the Torres Resolution allowing the conversion of the
Litton property was rendered on June 16, 1997. DAR Secretary Garilao received a copy of the Torres
Resolution on June 18, 1997. He did not file a motion for reconsideration nor did he appeal. Thereafter,
on September 17, 1997, petitioners interposed a motion for reconsideration. On October 28, 1997, the
DAR Secretary manifested that it was adopting the motion for reconsideration interposed by the
petitioners.29

Administrative Order No. 18, Series of 1987, prescribes the rules and regulations governing appeals
to the Office of the President. Section 7 of the said issuance 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.30

Under Executive Order No. 292, The Administrative Code of 1987, the decision of an agency shall
become final and executory 15 days after the receipt of a copy thereof by the party adversely affected
unless within that period an administrative appeal or judicial review, if proper, has been perfected. One
motion for reconsideration may be filed, which shall suspend the running of the period.31

The Torres Resolution was received by DAR Secretary Garilao on June 18, 1997. On September 17,
1997, petitioners filed a motion for reconsideration. On October 28, 1997, or 132 days after receipt of
the Torres Resolution, DAR Secretary Garilao filed a manifestation adopting the petitioners’ motion for
reconsideration. Clearly the Torres Resolution has already become final and executory by the time
petitioners filed the motion for reconsideration, assuming they have the legal standing to file the same.
Petitioners argue they were belatedly served a copy of the Torres Resolution, hence they cannot be
faulted for filing a late motion for reconsideration.

We examined the records of this case and we found no evidence to support the contention that
petitioners were belatedly served a copy of the Torres Resolution. No document in the records exists
 Page |6

to prove that petitioners received a copy of the Torres Resolution 15 days prior to the filing of their
motion for reconsideration on September 17, 1997.

Since the motion for reconsideration of the petitioners cannot be considered to have been timely filed
by a real party in interest, it never tolled the running of the 15-day period within which to file a motion
for reconsideration or an appeal. As such, the Torres Resolution had attained finality when petitioners
filed their motion for reconsideration. Thus, the Zamora Resolution which reversed the Torres
Resolution which is already final and executory was issued in disregard of the rules and basic legal
precept that accord finality to administrative determinations.

The orderly administration of justice requires that the judgments/resolutions of a court or quasi judicial
body must reach a point of finality set by the law, rules and regulations. The noble purpose is to write

finis to disputes once and for all. This is a fundamental principle in our justice system, without which
there could be no end to litigations. Utmost respect and adherence to this principle must always be
maintained by those who wield the power of adjudication. Any act which violates such principle must
be struck down.32

Procedural rules should be treated with utmost respect and due regard since they are designed to
facilitate the adjudication of cases to remedy the worsening problem of delay in the resolution of rival
claims and in the administration of justice. The requirement is in pursuance to the bill of rights inscribed
in the Constitution which guarantees that "all person shall have a right to the speedy disposition of
their cases before all judicial, quasi-judicial and administrative bodies" The adjudicatory bodies and
the parties to a case are thus enjoined to abide strictly by the rules.33

In fine, the Court of Appeals correctly reversed the Zamora Resolution because it was issued in excess
of jurisdiction and in violation of the fundamental and time-honored principle of finality to administrative
determinations.34 The Torres Resolution has become final and executory hence can no longer be
altered or modified.

WHEREFORE, the petition is [Link] June 16, 2000 Decision of the Court of Appeals in CA-
G.R. SP No. 52014 reversing the Resolution of the Office of the President dated September 4, 1998
(Zamora Resolution) and reinstating the Resolution dated June 16, 1997 (Torres Resolution) and its
October 23, 2000 Resolution denying the motion for reconsideration, are AFFIRMED.

No pronouncement as to costs.

SO ORDERED.
 Page |7

G.R. No. 188174 June 29, 2015

DEPARTMENT OF AGRARIAN REFORM, through its PROVINCIAL AGRARIAN REFORM

OFFICER OF DAVAO CITY, and THE MUNICIPAL AGRARIAN REFORM OFFICER OF
CALINAN, DAVAO CITY, Petitioners,
vs.
WOODLAND AGRO-DEVELOPMENT, INC., Respondent.

DECISION

SERENO, CJ:

This Petition for Review under Rule 45 seeks the nullification of the Decision 1 dated 2 February 2009
issued by the Regional Trial Court of Davao City Branch 14 (RTC) and its Order2 dated 8 May 2009 in
Special Civil Case No. 30855-2005. The RTC nullified the Notice of Coverage (NOC) dated 11
December 2003 and Notice of Acquisition (NOA) dated 5 October 2004 issued by petitioner
Department of Agrarian Reform (DAR) over a portion of a parcel of land owned by respondent
Woodland Agro Development. Inc. (Woodland). The court also denied DAR's Motion for
Reconsideration.3

The issue before this Court is whether Republic Act No. 8532 (R.A. 8532) authorized the DAR to issue
Notices of Coverage and Acquisition after 15 June 1998, or beyond the 10-year implementation period
provided or in Section 5 of Republic Act No. 6657 (R.A. 6657) or the

Comprehensive Agrarian Reform Law (CARL), which states:

SECTION 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.

The Court rules that R.A. 8532 extended the term of the implementation of the Comprehensive
Agrarian Reform Program (CARP) under the CARL. Consequently, the NOC dated 11 December 2003
and NOA dated 5 October 2004 issued over the portion of respondent's land are valid.

ANTECEDENT FACTS

Woodland is the registered owner of a parcel of agricultural land covered by Transfer Certificate of
Title (TCT) No. T-113207 with an area of 10.0680 hectares located at Subasta, Calinan, Davao
City.4 On 11 December 2003, the DAR issued an NOC5 placing 5.0680 hectares under the coverage
of the CARL for having exceeded the retention limit6provided by law. TCT No. T-113207 was canceled,
and a new title covering 5.0680 hectares was issued in the name of the Republic of the
Philippines.7 Thereafter, on 14 February 2005, Certificates of Land Ownership Award (CLOAs) were
issued in favor of five farmer beneficiaries.8

On 3 March 2005, Woodland filed with the RTC a Complaint9 for "Declaratory Relief, Annulment of the
Notice of Coverage under R.A. 6657, with Prayer for the Issuance of a Temporary Restraining Order
and/or Writ of Preliminary Injunction." Woodland contended that the issuance of the NOC was illegal,
because R.A. 6657 had already expired on 15 June 1998.10 It argued that pursuant to Section 5 of the
law, the agency had a period of ten (10) years to implement the CARP from the time of its effectivity
on 15 June 1988. It further argued that the CARL's amendatory law, R.A. 8532, did not extend the
DAR's authority to acquire agrarian lands for distribution. It theorized that the budget augmentations
legislated in R.A. 8532 pertained only to the funding requirements of the other facets of the CARP
implementation and excluded the acquisition of private agricultural lands.11
 Page |8

The DAR hinged its Answer12 on Department of Justice (DOJ) Opinion No. 009, Series of 1997 issued
by then DOJ Secretary Teofisto Guingona, Jr. He opined that Section 5 was merely directory in
character; that the 10-year period of implementation was only a time frame given to the DAR for the
acquisition and distribution of public and private agricultural lands covered by R.A. 6657.13 The
schedule was meant to guide the DAR in setting its priorities, but it was not by any means a limitation
of authority in the absence of more categorical language to that effect.14

THE RULING OF THE RTC

The RTC ruled that the DAR's act of sending Woodland an NOC was already a breach of R.A. 6657,
since the NOC was issued beyond the 10-year period prescribed by law.15 The trial court further ruled
that R.A. 8532 only amended the CARL' s provision on the sourcing of funds for the implementation
of the CARP, and not the provision on the period within which the DAR may acquire lands for
distribution. The court held that R.A. 8532 did not extend the 10-year period of land
acquisition.16 Neither did it overstep the DAR's jurisdiction to try agrarian matters, but only determined
Woodland's rights under the CARL.17

The dispositive portion18 of the RTC Decision reads:

Premises considered, this Court rules in favor of the plaintiff and judgment is rendered as follows:

1. Declaring that Republic Act No. [8532] did not extend the acquisition of private lands beyond June
15, 1998 and;

2. Nullifying the [Notice] of Coverage dated December 11, 2003 and the Notice of Acquisition dated
October 5, 2004.

After its Motion for Reconsideration was denied, petitioner elevated the case to this Court via a Petition
for Review under Rule 45.

THE ISSUE

The sole issue raised by petitioner is whether it can still issue Notices of Coverage after 15 June 1998.

THE COURT'S RULING

Article XIII, Section 4 of the 1987 Constitution encapsulates the people's yearning for genuine agrarian
reform. The provision states:

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.

Sixteen months after the ratification of the Constitution, Congress enacted the CARL.19 The policy of
the law is to pursue a Comprehensive Agrarian Reform Program that shall give highest consideration
to the welfare of landless farmers and farmworkers to promote social justice; move the nation toward
 Page |9

sound rural development and industrialization; and establish owner cultivatorship of economic-size
farms as the basis of Philippine agriculture. To this end, a more equitable distribution and ownership
of land shall be undertaken with due regard for the rights of landowners to just compensation and to
the ecological needs of the nation to provide farmers and farmworkers with the opportunity to enhance
their dignity and improve the quality of their lives through greater productivity of agricultural lands.20

In Secretary of Agrarian Reform v. Tropical Homes, lnc.,21 we recognized the CARL as a "bastion of
social justice of poor landless farmers, the mechanism designed to redistribute to the underprivileged
the natural right to toil the earth, and to liberate them from oppressive tenancy." To those who seek
the law's benefit, it is the means towards a viable livelihood and ultimately, a decent life.22

The Court is guided by these principles in the resolution of the present Petition for Review on Certiorari.

The agrarian reform program, being one of the immutable hallmarks of the 1987 Constitution, must be
faithfully implemented to meet the ends of social justice. The Court cannot subscribe to Woodland's
1âwphi1

stance that the DAR's authority to issue notices of coverage and acquisition ceased after the 10-year
implementation period mentioned in Section 5 of the CARL. Such a view runs afoul of the constitutional
mandate firmly lodged in Article XIII, Section 4, which seeks the just distribution of all agricultural lands
to qualified farmers and farm workers to free them from oppressive tenancy agreements.

The success of the CARP depends heavily on the adept implementation by the DAR. The agency's
primordial procedural tool for realizing the law's objectives is the issuance of Notices of Coverage and
Acquisition. For us to sustain Woodland's theory that the DAR can no longer issue those notices after
15 June 1998 despite the enactment of R.A. 8532 would thwart the CARP's purpose. As the Court
ruled in Gonzales v. Court of Appeals:23

[O]ur laws on agrarian reform were enacted primarily because of the realization that there is an urgent
need to alleviate the lives of the vast number of poor farmers in our country. Yet, despite such laws,
the majority of these farmers still live on a hand-to-mouth existence. This can be attributed to the fact
that these agrarian laws have never really been effectively implemented. Woodland asserts that R.A.
8532 only amended R.A. 6657 insofar as the funding requirements for the CARP are concerned. It
disputes the extension of the DAR's authority to acquire and distribute private agricultural lands.

The first paragraph of Section 63, as originally worded and as amended, used the phrase "this Act" to
refer to CARL as a whole.

Originally, the first paragraph of Section 63 reads:

SECTION 63. Funding Source. - The initial amount needed to implement this Act for the period of ten
(10) years upon approval hereof shall be funded from the Agrarian Reform Fund created under
Sections 20 and 21 of Executive Order No. 229. (Emphasis supplied)

As amended by R.A. 8532, the first paragraph of Section 63 stated:

SECTION 63. Funding Source. - The amount needed to implement this Act until the year 2008 shall
be funded from the Agrarian Reform Fund. (Emphasis supplied)

In 2009, Congress again amended certain provisions of the CARL, including Section 63.24 The latest
revision of the first paragraph recites:

SECTION 63. Funding Source. - The amount needed to further implement the CARP as provided in
this Act, until June 30, 2014, upon expiration of funding under Republic Act No. 8532 and other
pertinent laws, shall be funded from the Agrarian Reform Fund and other funding sources in the
amount of at least One hundred fifty billion pesos (₱150,000,000,000.00). (Emphasis supplied)
 P a g e | 10

Clearly, Section 63 refers to the implementation of the CARL in its entirety, not just the funding source.
Indeed, R.A. 8532 specifically amended Section 63 of R.A. 6657, but it does not follow that only
Section 63 had been affected by the amendment. The fact that Section 63 falls under the chapter on
"Financing" only emphasizes its general applicability. Hence, the phrase "until the year 2008" used in
R.A. 8532 unmistakably extends the DAR's authority to issue NOCs for purposes of acquiring and
distributing private agricultural lands.

Finally, R.A. 9700 extended the acquisition and distribution of all agricultural lands until 30 June
2014.25 The title alone of R.A. 9700 - An Act Strengthening the Comprehensive Agrarian Reform
Program (CARP), Extending the Acquisition and Distribution of All Agricultural Lands, Instituting
Necessary Reforms, Amending for the Purpose Certain Provisions of Republic Act No. 6657,
Otherwise Known as the Comprehensive Agrarian Reform Law of 1988, As Amended, and
Appropriating Funds Therefor - reveals that the CARP was indeed extended from 1998 to 2008 via
R.A. 8532. Had there been no prior extension from 1998 to 2008, how else could the CARP have been
extended by R.A. 9700 until 30 June 2014? There could have been an extension only if the program
sought to be extended had not expired.

WHEREFORE, the foregoing Petition is GRANTED. The Decision dated 2 February 2009 and Order
dated 8 May 2009 of the Regional Trial Court of Davao City Branch 14 in Special Civil Case No. 30855-
2005 are REVERSED and SET ASIDE. The DAR's Notice of Coverage dated 11 December 2003 and
Notice of Acquisition dated 5 October 2004 are UPHELD with full effect. SO ORDERED.
 P a g e | 11

G.R. No.176549

DEPARTMENT OF AGRARIAN REFORM, QUEZON CITY & PABLO MENDOZA, Petitioners,

vs.
ROMEO C. CARRIEDO, Respondent.

DECISION

JARDELEZA, J.:

This is a Petition for Review on Certiorari1 assailing the Court of Appeals Decision dated October 5,
20062 and Resolution dated January 10, 20073 in CA-G.R. SP No. 88935. The Decision and Resolution
reversed the Order dated February 22, 20054 issued by the Department of Agrarian Reform-Central
Office (DAR-CO) in Administrative Case No. A-9999-03-CV-008-03 which directed that a 5.0001
hectare piece of agricultural land (land) be placed under the Comprehensive Agrarian Reform Program
pursuant to Republic Act (RA) No. 6657 or the Comprehensive Agrarian Reform Law.

The Facts

The land originally formed part of the agricultural land covered by Transfer Certificate of Title (TCT)
No. 17680,5which in turn, formed part of the total of 73.3157 hectares of agricultural land owned by
Roman De Jesus (Roman).6

On May 23, 1972, petitioner Pablo Mendoza (Mendoza) became the tenant of the land by virtue of
a Contrato King Pamamuisan7 executed between him and Roman. Pursuant to the Contrato, Mendoza
has been paying twenty-five (25) piculs of sugar every crop year as lease rental to Roman. It was later
changed to Two Thousand Pesos (P2, 000.00) per crop year, the land being no longer devoted to
sugarcane.8

On November 7, 1979, Roman died leaving the entire 73.3157 hectares to his surviving wife Alberta
Constales (Alberta), and their two sons Mario De Jesus (Mario) and Antonio De Jesus (Antonio).9 On
August 23, 1984, Antonio executed a Deed of Extrajudicial Succession with Waiver of Right10 which
made Alberta and Mario co-owners in equal proportion of the agricultural land left by Roman.11

On June 26, 1986, Mario sold12 approximately 70.4788 hectares to respondent Romeo C. Carriedo
(Carriedo), covered by the following titles and tax declarations, to wit:

1. TCT No. 35055

2. (Tax Declaration) TD No. 48354

3. TCT No. 17681

4. TCT No. 56897

5. TCT No. 17680

The area sold to Carriedo included the land tenanted by Mendoza (forming part of the area covered
by TCT No. 17680). Mendoza alleged that the sale took place without his knowledge and consent.

In June of 1990, Carriedo sold all of these landholdings to the Peoples’ Livelihood Foundation, Inc.
(PLFI) represented by its president, Bernabe Buscayno.13 All the lands, except that covered by TCT
 P a g e | 12

No. 17680, were subjected to Voluntary Land Transfer/Direct Payment Scheme and were awarded to
agrarian reform beneficiaries in 1997.14

The parties to this case were involved in three cases concerning the land, to wit:

The Ejectment Case (DARAB Case No. 163-T-90 | CAG.R. SP No. 44521 | G.R. No. 143416)

On October 1, 1990, Carriedo filed a Complaint for Ejectment and Collection of Unpaid Rentals against
Mendoza before the Provincial Agrarian Reform Adjudication Board (PARAD) of Tarlac docketed as
DARAB Case No. 163-T-90. He subsequently filed an Amended Complaint on October 30, 1990.15

In a Decision dated June 4, 1992,16 the PARAD ruled that Mendoza had knowledge of the sale, hence,
he could not deny the fact nor assail the validity of the conveyance. Mendoza violated Section 2 of
Presidential Decree (PD) No. 816,17 Section 50 of RA No. 119918 and Section 36 of RA No. 3844,19 and
thus, the PARAD declared the leasehold contract terminated, and ordered Mendoza to vacate the
premises.20

Mendoza filed an appeal with the Department of Agrarian Reform Adjudication Board (DARAB). In a 1âwphi1

Decision dated February 8, 1996,21 the DARAB affirmed the PARAD Decision in toto. The DARAB
ruled that ownership of the land belongs to Carriedo. That the deed of sale was unregistered did not
affect Carriedo’s title to the land. By virtue of his ownership, Carriedo was subrogated to the rights and
obligation of the former landowner, Roman.22

Mendoza then filed a Petition for Review with the Court of Appeals (CA). The case was docketed as
CA-G.R. SP No. 44521. In a Decision dated September 7, 1998,23 the CA affirmed the DARAB
decision in toto. The CA ruled that Mendoza’s reliance on Section 6 of RA No. 6657 as ground to
nullify the sale between De Jesus and Carriedo was misplaced, the section being limited to retention
limits. It reiterated that registration was not a condition for the validity of the contract of sale between
the parties.24 Mendoza’s Motions for Reconsideration and New Trial were subsequently denied.25

Mendoza thus filed a Petition for Review on Certiorari with this Court, docketed as G.R. No. 143416.
In a Resolution dated August 9, 2000,26 this Court denied the petition for failure to comply with the
requirements under Rule 45 of the Rules of Court. An Entry of Judgment was issued on October 25,
2000.27 In effect, the Decision of the CA was affirmed, and the following issues were settled with finality:

1) Carriedo is the absolute owner of the five (5) hectare land;

2) Mendoza had knowledge of the sale between Carriedo and Mario De Jesus, hence he is
bound by the sale; and

3) Due to his failure and refusal to pay the lease rentals, the tenancy relationship between
Carriedo and Mendoza had been terminated.

Meanwhile, on October 5, 1999, the landholding covered by TCT No. 17680 with an area of 12.1065
hectares was divided into sub-lots. 7.1065 hectares was transferred to Bernabe Buscayno et al.
through a Deed of Transfer28under PD No. 27.29 Eventually, TCT No. 17680 was partially cancelled,
and in lieu thereof, emancipation patents (EPs) were issued to Bernabe, Rod and Juanito, all
surnamed Buscayno. These lots were identified as Lots C, D and E covered by TCT Nos. 44384 to
44386 issued on September 10, 1999.30 Lots A and B, consisting of approximately 5.0001 hectares
and which is the land being occupied by Mendoza, were registered in the name of Carriedo and
covered by TCT No. 34428131 and TCT No. 344282.32

The Redemption Case (DARAB III-T-1476-97 | CA-G.R. SP No. 88936)

 P a g e | 13

On July 21, 1997, Mendoza filed a Petition for Redemption33 with the PARAD. In an Order dated
January 15, 2001,34the PARAD dismissed his petition on the grounds of litis pendentia and lack of the
required certification against forum-shopping. It dismissed the petition so that the pending appeal of
DARAB Case No. 163-T-90 (the ejectment case discussed above) with the CA can run its full course,
since its outcome partakes of a prejudicial question determinative of the tenability of Mendoza’s right
to redeem the land under tenancy.35

Mendoza appealed to the DARAB which reversed the PARAD Order in a Decision dated November
12, 2003.36 The DARAB granted Mendoza redemption rights over the land. It ruled that at the time
Carriedo filed his complaint for ejectment on October 1, 1990, he was no longer the owner of the land,
having sold the land to PLFI in June of 1990. Hence, the cause of action pertains to PLFI and not to
him.37 It also ruled that Mendoza was not notified of the sale of the land to Carriedo and of the latter’s
subsequent sale of it to PLFI. The absence of the mandatory requirement of notice did not stop the
running of the 180 day-period within which Mendoza could exercise his right of
redemption.38 Carriedo’s Motion for Reconsideration was subsequently denied.39

Carriedo filed a Petition for Review with the CA. In a Decision dated December 29, 2006, 40 the CA
reversed the DARAB Decision. It ruled that Carriedo’s ownership of the land had been conclusively
established and even affirmed by this Court. Mendoza was not able to substantiate his claim that
Carriedo was no longer the owner of the land at the time the latter filed his complaint for ejectment. It
held that the DARAB erred when it ruled that Mendoza was not guilty of forum-shopping.41 Mendoza
did not appeal the decision of the CA.

The Coverage Case (ADM Case No. A-9999-03-CV-008-03 | CA-G.R. SP No. 88935)

On February 26, 2002, Mendoza, his daughter Corazon Mendoza (Corazon) and Orlando Gomez
(Orlando) filed a Petition for Coverage42 of the land under RA No. 6657. They claimed that they had
been in physical and material possession of the land as tenants since 1956, and made the land
productive.43 They prayed (1) that an order be issued placing the land under Comprehensive Agrarian
Reform Program (CARP); and (2) that the DAR, the Provincial Agrarian Reform Officer (PARO) and
the Municipal Agrarian Reform Officer (MARO) of Tarlac City be ordered to proceed with the
acquisition and distribution of the land in their favor.44 The petition was granted by the Regional Director
(RD) in an Order dated October 2, 2002,45 the dispositive portion of which reads:

WHEREFORE, foregoing premises considered, the petition for coverage under CARP filed by Pablo
Mendoza, et al[.], is given due course. Accordingly, the MARO and PARO are hereby directed to place
within the ambit of RA 6657 the landholding registered in the name of Romeo Carriedo covered and
embraced by TCT Nos. 334281 and 334282, with an aggregate area of 45,000 and 5,001 square
meters, respectively, and to distribute the same to qualified farmer-beneficiaries.

SO ORDERED.46

On October 23, 2002, Carriedo filed a Protest with Motion to Reconsider the Order dated October 2,
2002 and to Lift Coverage47 on the ground that he was denied his constitutional right to due process.
He alleged that he was not notified of the filing of the Petition for Coverage, and became aware of the
same only upon receipt of the challenged Order.

On October 24, 2002, Carriedo received a copy of a Notice of Coverage dated October 21, 200248 from
MARO Maximo E. Santiago informing him that the land had been placed under the coverage of the
CARP.49 On December 16, 2002, the RD denied Carriedo’s protest in an Order dated December 5,
2002.50 Carriedo filed an appeal to the DAR-CO.

In an Order dated February 22, 2005,51 the DAR-CO, through Secretary Rene C. Villa, affirmed the
Order of the RD granting coverage. The DAR-CO ruled that Carriedo was no longer allowed to retain
 P a g e | 14

the land due to his violation of the provisions of RA No. 6657. His act of disposing his agricultural
landholdings was tantamount to the exercise of his retention right, or an act amounting to a valid waiver
of such right in accordance with applicable laws and jurisprudence.52 However, it did not rule whether
Mendoza was qualified to be a farmer-beneficiary of the land. The dispositive portion of the Order
reads:

WHEREFORE, premises considered, the instant appeal is hereby DISMISSED for lack of merit.
Consequently, the Order dated 2 October 2002 of the Regional Director of DAR III, is
hereby AFFIRMED.

SO ORDERED.53

Carriedo filed a Petition for Review54 with the CA assailing the DAR-CO Order. The appeal was
docketed as CA-G.R. SP No. 88935. In a Decision dated October 5, 2006, the CA reversed the DAR-
CO, and declared the land as Carriedo’s retained area. The CA ruled that the right of retention is a
constitutionally-guaranteed right, subject to certain qualifications specified by the legislature.55 It serves
to mitigate the effects of compulsory land acquisition by balancing the rights of the landowner and the
tenant by implementing the doctrine that social justice was not meant to perpetrate an injustice against
the landowner.56 It held that Carriedo did not commit any of the acts which would constitute waiver of
his retention rights found under Section 6 of DAR Administrative Order No. 02, S.2003.57 The
dispositive portion of the Decision reads:

WHEREFORE, premises considered and pursuant to applicable law and jurisprudence on the matter,
the present Petition is hereby GRANTED. Accordingly, the assailed Order of the Department of
Agrarian Reform-Central Office, Elliptical Road, Diliman, Quezon City (dated February 22, 2005) is
hereby REVERSED and SET ASIDE and a new one entered—DECLARING the subject landholding
as the Petitioner’s retained area. No pronouncements as to costs.

SO ORDERED.58

Hence, this petition.

Petitioners maintain that the CA committed a reversible error in declaring the land as Carriedo’s
retained area.59

They claim that Paragraph 4, Section 6 of RA No. 6657 prohibits any sale, disposition, lease,
management contract or transfer of possession of private lands upon effectivity of the law.60 Thus,
Regional Director Renato Herrera correctly observed that Carriedo’s act of disposing his agricultural
property would be tantamount to his exercise of retention under the law. By violating the law, Carriedo
could no longer retain what was left of his property. "To rule otherwise would be a roundabout way of
rewarding a landowner who has violated the explicit provisions of the Comprehensive Agrarian Reform
Law."61

They also assert that Carriedo waived his right to retain for failure or neglect for an unreasonable
length of time to do that which he may have done earlier by exercising due diligence, warranting a
presumption that he abandoned his right or declined to assert it.62 Petitioners claim that Carriedo has
not filed an Application for Retention over the subject land over a considerable passage of time since
the same was acquired for distribution to qualified farmer beneficiaries.63

Lastly, they argue that Certificates of Land Ownership Awards (CLOAs) already generated in favor of
his co-petitioners Corazon Mendoza and Rolando Gomez cannot be set aside. CLOAs under RA No.
6657 are enrolled in the Torrens system of registration which makes them indefeasible as certificates
of title issued in registration proceedings.64
 P a g e | 15

The Issue

The sole issue for our consideration is whether Carriedo has the right to retain the land.

Our Ruling

We rule in the affirmative. Carriedo did not waive his right of retention over the land. 1âw phi 1

The 1987 Constitution expressly recognizes landowner retention rights under Article XIII, Section 4,
to wit:

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. (Emphasis supplied.)

RA No. 6657 implements this directive, thus:

Section 6. Retention Limits. — Except as otherwise provided in this Act, no person may own or retain,
directly or indirectly, any public or private agricultural land, the size of which shall vary according to
factors governing a viable family-size 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 retention by the landowner exceed five (5) hectares.

xxx

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 farmworkers on the land prior to the
approval of this Act shall be respected. xxx (Emphasis supplied.)

In Danan v. Court of Appeals,65 we explained the rationale for the grant of the right of retention under
agrarian reform laws such as RA No. 6657 and its predecessor PD No. 27, to wit:

The right of retention is a constitutionally guaranteed right, which is subject to qualification by the
legislature. It serves to mitigate the effects of compulsory land acquisition by balancing the rights of
the landowner and the tenant and by implementing the doctrine that social justice was not meant to
perpetrate an injustice against the landowner. A retained area, as its name denotes, is land which is
not supposed to anymore leave the landowner's dominion, thus sparing the government from the
inconvenience of taking land only to return it to the landowner afterwards, which would be a pointless
process. For as long as the area to be retained is compact or contiguous and does not exceed the
retention ceiling of five (5) hectares, a landowner's choice of the area to be retained must prevail. xxx66
 P a g e | 16

To interpret Section 6 of RA No. 6657, DAR issued Administrative Order No. 02, Series of 2003 (DAR
AO 02-03). Section 6 of DAR AO 02-03 provides for the instances when a landowner is deemed to
have waived his right of retention, to wit:

Section 6. Waiver of the Right of Retention. – The landowner waives his right to retain by committing
any of the following act or omission:

6.1 Failure to manifest an intention to exercise his right to retain within sixty (60) calendar days
from receipt of notice of CARP coverage.

6.2 Failure to state such intention upon offer to sell or application under the [Voluntary Land
Transfer (VLT)]/[Direct Payment Scheme (DPS)] scheme.

6.3 Execution of any document stating that he expressly waives his right to retain. The MARO
and/or PARO and/or Regional Director shall attest to the due execution of such document.

6.4 Execution of a Landowner Tenant Production Agreement and Farmer’s

Undertaking (LTPA-FU) or Application to Purchase and Farmer’s Undertaking (APFU)
covering subject property.

6.5 Entering into a VLT/DPS or [Voluntary Offer to Sell (VOS)] but failing to manifest an
intention to exercise his right to retain upon filing of the application for VLT/DPS or VOS.

6.6 Execution and submission of any document indicating that he is consenting to the CARP
coverage of his entire landholding.

6.7 Performing any act constituting estoppel by laches which is the failure or neglect for an
unreasonable length of time to do that which he may have done earlier by exercising due
diligence, warranting a presumption that he abandoned his right or declined to assert it.

Petitioners cannot rely on the RD’s Order dated October 2, 2002 which granted Mendoza’s petition for
coverage on the ground that Carriedo violated paragraph 4 Section 667 of RA No. 6657 for disposing
of his agricultural land, consequently losing his right of retention. At the time when the Order was
rendered, up to the time when it was affirmed by the DAR-CO in its Order dated February 22, 2005,
the applicable law is Section 6 of DAR 02-03. Section 6 clearly shows that the disposition of agricultural
land is not an act constituting waiver of the right of retention.

Thus, as correctly held by the CA, Carriedo "[n]ever committed any of the acts or omissions above-
stated (DAR AO 02-03). Not even the sale made by the herein petitioner in favor of PLFI can be
considered as a waiver of his right of retention. Likewise, the Records of the present case is bereft of
any showing that the herein petitioner expressly waived (in writing) his right of retention as required
under sub-section 6.3, section 6, DAR Administrative Order No. 02-S.2003."68

Petitioners claim that Carriedo’s alleged failure to exercise his right of retention after a long period of
time constituted a waiver of his retention rights, as envisioned in Item 6.7 of DAR AO 02-03.

We disagree.

Laches is defined as the failure or neglect for an unreasonable and unexplained length of time, to do
that which by exercising due diligence could or should have been done earlier; it is negligence or
omission to assert a right within a reasonable time, warranting a presumption that the party entitled to
assert it either has abandoned it or declined to assert it.69 Where a party sleeps on his rights and allows
laches to set in, the same is fatal to his case.70
 P a g e | 17

Section 4 of DAR AO 02-03 provides:

Section 4. Period to Exercise Right of Retention under RA 6657

4.1 The landowner may exercise his right of retention at any time before receipt of notice of
coverage.

4.2 Under the Compulsory Acquisition (CA) scheme, the landowner shall exercise his right of
retention within sixty (60) days from receipt of notice of coverage.

4.3 Under the Voluntary Offer to Sell (VOS) and the Voluntary Land Transfer (VLT)/Direct
Payment Scheme (DPS), the landowner shall exercise his right of retention simultaneously at
the time of offer for sale or transfer.

The foregoing rules give Carriedo any time before receipt of the notice of coverage to exercise his
right of retention, or if under compulsory acquisition (as in this case), within sixty (60) days from receipt
of the notice of coverage. The validity of the notice of coverage is the very subject of the controversy
before this court. Thus, the period within which Carriedo should exercise his right of retention cannot
commence until final resolution of this case.

Even assuming that the period within which Carriedo could exercise his right of retention has
commenced, Carriedo cannot be said to have neglected to assert his right of retention over the land.
The records show that per Legal Report dated December 13, 199971 prepared by Legal Officer Ariel
Reyes, Carriedo filed an application for retention which was even contested by Pablo Mendoza’s son,
Fernando.72 Though Carriedo subsequently withdrew his application, his act of filing an application
for retention belies the allegation that he abandoned his right of retention or declined to assert it.

In their Memorandum73 however, petitioners, for the first time, invoke estoppel, citing DAR
Administrative Order No. 05 Series of 200674 (DAR AO 05-06) to support their argument that Carriedo
waived his right of retention.75 DAR AO 05-06 provides for the rules and regulations governing the
acquisition and distribution of agricultural lands subject of conveyances under Sections 6, 7076 and 73
(a)77 of RA No. 6657. Petitioners particularly cite Item no. 4 of the Statement of Policies of DAR AO 05-
06, to wit:

II. Statement of Policies

4. Where the transfer/sale involves more than the five (5) hectares retention area, the transfer is
considered violative of Sec. 6 of R.A. No. 6657.

In case of multiple or series of transfers/sales, the first five (5) hectares sold/conveyed without DAR
clearance and the corresponding titles issued by the Register of Deeds (ROD) in the name of the
transferee shall, under the principle of estoppel, be considered valid and shall be treated as the
transferor/s’ retained area but in no case shall the transferee exceed the five-hectare landholding
ceiling pursuant to Sections 6, 70 and 73(a) of R.A. No. 6657. Insofar as the excess area is concerned,
the same shall likewise be covered considering that the transferor has no right of disposition since
CARP coverage has been vested as of 15 June 1988. Any landholding still registered in the name of
the landowner after earlier dispositions totaling an aggregate of five (5) hectares can no longer be part
of his retention area and therefore shall be covered under CARP. (Emphasis supplied.)

Citing this provision, petitioners argue that Carriedo lost his right of retention over the land because
he had already sold or disposed, after the effectivity of RA No. 6657, more than fifty (50) hectares of
land in favor of another.78
 P a g e | 18

In his Memorandum,79 Carriedo maintains that petitioners cannot invoke any administrative regulation
to defeat his right of retention. He argues that "administrative regulation must be in harmony with the
provisions of law otherwise the latter prevails."80

We cannot sustain petitioners' argument. Their reliance on DAR AO 05-06 is misplaced. As will be
seen below, nowhere in the relevant provisions of RA No. 6657 does it indicate that a multiple or series
of transfers/sales of land would result in the loss of retention rights. Neither do they provide that the
multiple or series of transfers or sales amounts to the waiver of such right.

The relevant portion of Section 6 of RA No. 6657 referred to in Item no. 4 of DAR AO 05-06 provides:

Section 6. Retention Limits. – Except as otherwise provided in this Act, no person may own or retain,
directly or indirectly, any public or private agricultural land, the size of which shall vary according to
factors governing a viable family-size farm, such as the commodity produced, terrain, infrastructure,
and soil fertility as determined by the Presidential Agrarian Reform Council (PARC) created hereunder,
but in no case shall retention by the landowner exceed five (5) hectares. xxx

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 the 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 Department of Agrarian Reform (DAR) within thirty
(30) days of any transaction involving agricultural lands in excess of five (5) hectares. (Emphasis
supplied.)

Section 70 of RA No. 6657, also referred to in Item no. 4 of DAR AO 05-06 partly provides:

The sale or disposition of agricultural lands retained by a landowner as a consequence of Section 6

hereof shall be valid as long as the total landholdings that shall be owned by the transferee thereof
inclusive of the land to be acquired shall not exceed the landholding ceilings provided for in this
Act. Any sale or disposition of agricultural lands after the effectivity of this Act found to be
contrary to the provisions hereof shall be null and void. xxx (Emphasis supplied.)

Finally, Section 73 (a) of RA No. 6657 as referred to in Item No. 4 of DAR AO 05-06 provides,

Section 73. Prohibited Acts and Omissions. – The following are prohibited:

(a) The ownership or possession, for the purpose of circumventing the provisions of this Act, of
agricultural lands in excess of the total retention limits or award ceilings by any person, natural or
juridical, except those under collective ownership by farmer-beneficiaries; xxx

Sections 6 and 70 are clear in stating that any sale and disposition of agricultural lands in violation of
the RA No. 6657 shall be null and void. Under the facts of this case, the reasonable reading of these
three provisions in relation to the constitutional right of retention should be that the consequence of
nullity pertains to the area/s which were sold, or owned by the transferee, in excess of the 5-hectare
land ceiling. Thus, the CA was correct in declaring that the land is Carriedo’s retained area.81

Item no. 4 of DAR AO 05-06 attempts to defeat the above reading by providing that, under the principle
of estoppel, the sale of the first five hectares is valid. But, it hastens to add that the first five hectares
sold corresponds to the transferor/s’ retained area. Thus, since the sale of the first five hectares is
valid, therefore, the landowner loses the five hectares because it happens to be, at the same time, the
retained area limit. In reality, Item No. 4 of DAR AO 05-06 operates as a forfeiture provision in the
guise of estoppel. It punishes the landowner who sells in excess of five hectares. Forfeitures, however,
partake of a criminal penalty.82
 P a g e | 19

In Perez v. LPG Refillers Association of the Philippines, Inc.,83 this Court said that for an administrative
regulation to have the force of a penal law, (1) the violation of the administrative regulation must be
made a crime by the delegating statute itself; and (2) the penalty for such violation must be provided
by the statute itself.84

Sections 6, 70 and 73 (a) of RA No. 6657 clearly do not provide that a sale or disposition of land in
excess of 5 hectares results in a forfeiture of the five hectare retention area. Item no. 4 of DAR AO 05-
06 imposes a penalty where none was provided by law.

As this Court also held in People v. Maceren,85 to wit:

The reason is that the Fisheries law does not expressly prohibit electro fishing. As electro fishing is
not banned under the law, the Secretary of Agriculture and Natural Resources and the Natural
Resources and the Commissioner of Fisheries are powerless to penalize it. In other words,
Administrative Order Nos. 84 and 84-1, in penalizing electro fishing, are devoid of any legal basis.

Had the lawmaking body intended to punish electro fishing, a penal provision to that effect could have
been easily embodied in the old Fisheries Law.86

The repugnancy between the law and Item no. 4 of DAR AO 05-06 is apparent by a simple comparison
of their texts. The conflict undermines the statutorily-guaranteed right of the landowner to choose the
land he shall retain, and DAR AO 05-06, in effect, amends RA No. 6657.

In Romulo, Mabanta, Buenaventura, Sayoc & De Los Angeles (RMBSA) v. Home Development
Mutual Fund (HDMF),87 this Court was confronted with the issue of the validity of the amendments to
the rules and regulations implementing PD No. 1752.88 In that case, PD No. 1752 (as amended by RA
No. 7742) exempted RMBSA from the Pag-Ibig Fund coverage for the period January 1 to December
31, 1995. In September 1995, however, the HDMF Board of Trustees issued a board resolution
amending and modifying the rules and regulations implementing RA No. 7742. As amended, the rules
now required that for a company to be entitled to a waiver or suspension of fund coverage, it must
have a plan providing for both provident/retirement and housing benefits superior to those provided in
the Pag-Ibig Fund. In ruling against the amendment and modification of the rules, this Court held that—

In the present case, when the Board of Trustees of the HDMF required in Section 1, Rule VII of the
1995 Amendments to the Rules and Regulations Implementing R.A. No. 7742 that employers should
have both provident/retirement and housing benefits for all its employees in order to qualify for
exemption from the Fund, it effectively amended Section 19 of P.D. No. 1752. And when the Board
subsequently abolished that exemption through the 1996 Amendments, it repealed Section 19 of P.D.
No. 1752. Such amendment and subsequent repeal of Section 19 are both invalid, as they are not
within the delegated power of the Board. The HDMF cannot, in the exercise of its rule-making power,
issue a regulation not consistent with the law it seeks to apply. Indeed, administrative issuances must
not override, supplant or modify the law, but must remain consistent with the law they intend to carry
out. Only Congress can repeal or amend the law.89 (Citations omitted; underscoring supplied.)

Laws, as well as the issuances promulgated to implement them, enjoy the presumption of
validity.90 However, administrative regulations that alter or amend the statute or enlarge or impair its
scope are void, and courts not only may, but it is their obligation to strike down such regulations.91 Thus,
in this case, because Item no. 4 of DAR AO 05-06 is patently null and void, the presumption of validity
cannot be accorded to it. The invalidity of this provision constrains us to strike it down for being ultra
vires.

In Conte v. Commission on Audit,92 the sole issue of whether the Commission on Audit (COA) acted
in grave abuse of discretion when it disallowed in audit therein petitioners' claim of financial assistance
under Social Security System (SSS) Resolution No. 56 was presented before this Court. The COA
 P a g e | 20

disallowed the claims because the financial assistance under the challenged resolution is similar to a
separate retirement plan which results in the increase of benefits beyond what is allowed under
existing laws. This Court, sitting en banc, upheld the findings of the COA, and invalidated SSS
Resolution No. 56 for being ultra vires, to wit:

xxx Said Sec. 28 (b) as amended by RA 4968 in no uncertain terms bars the creation of any insurance
or retirement plan — other than the GSIS — for government officers and employees, in order to prevent
the undue and [iniquitous] proliferation of such plans. It is beyond cavil that Res. 56 contravenes the
said provision of law and is therefore invalid, void and of no effect. xxx

We are not unmindful of the laudable purposes for promulgating Res. 56, and the positive results it
must have had xxx. But it is simply beyond dispute that the SSS had no authority to maintain and
implement such retirement plan, particularly in the face of the statutory prohibition. The SSS cannot,
in the guise of rule-making, legislate or amend laws or worse, render them nugatory.

It is doctrinal that in case of conflict between a statute and an administrative order, the former must
prevail. A rule or regulation must conform to and be consistent with the provisions of the enabling
statute in order for such rule or regulation to be valid. The rule-making power of a public administrative
body is a delegated legislative power, which it may not use either to abridge the authority given it by
the Congress or the Constitution or to enlarge its power beyond the scope intended. xxx Though well-
settled is the rule that retirement laws are liberally interpreted in favor of the retiree, nevertheless,
there is really nothing to interpret in either RA 4968 or Res. 56, and correspondingly, the absence of
any doubt as to the ultra-vires nature and illegality of the disputed resolution constrains us to
rule against petitioners.93 (Citations omitted; emphasis and underscoring supplied.)

Administrative regulations must be in harmony with the provisions of the law for administrative
regulations cannot extend the law or amend a legislative enactment.94 Administrative issuances must
not override, but must remain consistent with the law they seek to apply and implement. They are
intended to carry out, not to supplant or modify the law.95 Administrative or executive acts, orders and
regulations shall be valid only when they are not contrary to the laws or the
Constitution.96 Administrative regulations issued by a Department Head in conformity with law have
the force of law.97 As he exercises the rule-making power by delegation of the lawmaking body, it is a
requisite that he should not transcend the bounds demarcated by the statute for the exercise of that
power; otherwise, he would be improperly exercising legislative power in his own right and not as a
surrogate of the lawmaking body.98

If the implementing rules and regulations are issued in excess of the rule-making authority of the
administrative agency, they are without binding effect upon the courts. At best, the same may be
treated as administrative interpretations of the law and as such, they may be set aside by the Supreme
Court in the final determination of what the law means.99

While this Court is mindful of the DAR’s commitment to the implementation of agrarian reform, it must
be conceded that departmental zeal may not be permitted to outrun the authority conferred by
statute.100 Neither the high dignity of the office nor the righteousness of the motive then is an acceptable
substitute; otherwise the rule of law becomes a myth.101

As a necessary consequence of the invalidity of Item no. 4 of DAR AO 05-06 for being ultra vires, we
hold that Carriedo did not waive his right to retain the land, nor can he be considered to be in estoppel.

Finally, petitioners cannot argue that the CLOAs allegedly granted in favor of his co-petitioners
Corazon and Orlando cannot be set aside. They claim that CLOAs under RA No. 6657 are enrolled in
the Torrens system of registration which makes them indefeasible as certificates of title issued in
registration proceedings.102 Even as these allegedly issued CLOAs are not in the records, we hold that
CLOAs are not equivalent to a Torrens certificate of title, and thus are not indefeasible.
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CLOAs and EPs are similar in nature to a Certificate of Land Transfer (CLT) in ordinary land
registration proceedings. CLTs, and in turn the CLOAs and EPs, are issued merely as preparatory
steps for the eventual issuance of a certificate of title. They do not possess the indefeasibility of
certificates of title. Justice Oswald D. Agcaoili, in Property Registration Decree and Related Laws
(Land Titles and Deeds),103 notes, to wit:

Under PD No. 27, beneficiaries arc issued certificates of land transfers (ClTs) to entitle them to
possess lands. Thereafter, they are issued emancipation patents (EPs) after compliance with all
necessary conditions. Such EPs, upon their presentation to the Register of Deeds, shall be the basis
for the issuance of the corresponding transfer certificates of title (TCTs) in favor of the corresponding
beneficiaries.

Under RA No. 6657, the procedure has been simplified. Only certificates of land ownership award
(CLOAs) are issued, in lieu of EPs, after compliance with all prerequisites. Upon presentation of the
CLOAs to the Register of Deeds, TCTs are issued to the designated beneficiaries. CLTs are no longer
issued.

The issuance of EPs or CLOAs to beneficiaries does not absolutely bar the landowner from retaining
the area covered thereby. Under AO No. 2, series of 1994, an EP or CLOA may be cancelled if the
land covered is later found to be part of the landowner's retained area. (Citations omitted; underscoring
supplied.)

The issue, however, involving the issuance, recall or cancellation of EPs or CLOAs, is lodged with the
DAR,104 which has the primary jurisdiction over the matter.105

WHEREFORE, premises considered, the Petition is hereby DENIED for lack of merit. The assailed
Decision of the Court of Appeals dated October 5, 2006 is AFFIRMED. Item no. 4 of DAR
Administrative Order No. 05, Series of 2006 is hereby declared INVALID, VOID and OF NO
EFFECT for being ultra vires.

SO ORDERED