Luz Farms vs.

Secretary of Agrarian Reform

G.R. No. 86889, Dec. 04, 1990

Facts:
On 10 June 1988, RA 6657 was approved by the President of the Philippines, which
includes, among others, the raising of livestock, poultry and swine in its coverage.
Petitioner Luz Farms, a corporation engaged in the livestock and poultry business,
avers that it would be adversely affected by the enforcement of sections 3(b), 11, 13, 16
(d), 17 and 32 of the said law. Hence, it prayed that the said law be declared
unconstitutional. The mentioned sections of the law provies, among others, the product-
sharing plan, including those engaged in livestock and poultry business.
Luz Farms further argued that livestock or poultry raising is not similar with crop or tree
farming. That the land is not the primary resource in this undertaking and represents no
more than 5% of the total investments of commercial livestock and poultry raisers. That
the land is incidental but not the principal factor or consideration in their industry.
Hence, it argued that it should not be included in the coverage of RA 6657 which covers
“agricultural lands.
Issue:
Whether or not Sections 3(b), 11, 13 and 32 of R.A. No. 6657 (the Comprehensive
Agrarian Reform Law of 1988), insofar as the said law includes the raising of livestock,
poultry and swine in its coverage as well as the Implementing Rules and Guidelines
promulgated in accordance therewith are constitutional.
Ruling:
No. The transcripts of the deliberations of the Constitutional Commission of 1986 on the
meaning of the word "agricultural," clearly show that it was never the intention of the
framers of the Constitution to include livestock and poultry industry in the coverage of
the constitutionally-mandated agrarian reform program of the Government. The
Committee adopted the definition of "agricultural land" as defined under Section 166 of
R.A. 3844, as land devoted to any growth, including but not limited to crop lands, salt
beds, fishponds, idle and abandoned land (Record, CONCOM, August 7, 1986, Vol. III,
p. 11).The intention of the Committee is to limit the application of the word "agriculture."
Commissioner Jamir proposed to insert the word "ARABLE" to distinguish this kind of
agricultural land from such lands as commercial and industrial lands and residential
properties because all of them fall under the general classification of the word
"agricultural". This proposal, however, was not considered because the Committee
contemplated that agricultural lands are limited to arable and suitable agricultural lands
and therefore, do not include commercial, industrial and residential lands.
It is evident from the foregoing discussion that Section II of R.A. 6657 which includes
"private agricultural lands devoted to commercial livestock, poultry and swine raising" in
the definition of "commercial farms" is invalid, to the extent that the aforecited agro-
industrial activities are made to be covered by the agrarian reform program of the State.
There is simply no reason to include livestock and poultry lands in the coverage of
agrarian reform.

Department of Agrarian Reform (DAR) vs. Delia T. Sutton

G.R. No. 162070, October 19, 2005
Facts:

The case at bar involves a land in Aroroy, Masbate, inherited by respondents which has
been devoted exclusively to cow and calf breeding. On October 26, 1987, pursuant to
the then existing agrarian reform program of the government, respondents made a
voluntary offer to sell (VOS) their landholdings to petitioner DAR to avail of certain
incentives under the law.

On June 10, 1988, a new agrarian law, Republic Act (R.A.) No. 6657, also known as the
Comprehensive Agrarian Reform Law (CARL) of 1988, took effect. It included in its
coverage farm used for raising livestock, poultry and swine.

On December 4, 1990, in an en banc decision in the case of Luz Farms v. Secretary of

DAR, this Court ruled that lands devoted to livestock and poultryraising are not included
in the definition of agricultural land. Hence, we declared as unconstitutional certain
provisions of the CARL insofar as they included livestock farms in the coverage of
agrarian reform.

In view of the Luz Farms ruling, respondents filed with petitioner DAR a formal request
to withdraw their VOS as their landholding was devoted exclusively to cattleraising and
thus exempted from the coverage of the CARL.

On December 21, 1992, the Municipal Agrarian Reform Officer of Aroroy, Masbate,
inspected respondents land and found that it was devoted solely to cattleraising and
breeding. He recommended to the DAR Secretary that it be exempted from the
coverage of the CARL.

On April 27, 1993, respondents reiterated to petitioner DAR the withdrawal of their VOS
and requested the return of the supporting papers they submitted in connection
therewith. Petitioner ignored their request.

On December 27, 1993, DAR issued A.O. No. 9, series of 1993, which provided that
only portions of private agricultural lands used for the raising of livestock, poultry and
swine as of June 15, 1988 shall be excluded from the coverage of the CARL. In
determining the area of land to be excluded, the A.O. fixed the following retention limits,
viz: 1:1 animalland ratio (i.e., 1 hectare of land per 1 head of animal shall be retained by
the landowner), and a ratio of 1.7815 hectares for livestock infrastructure for every 21
heads of cattle shall likewise be excluded from the operations of the CARL.

On February 4, 1994, respondents wrote the DAR Secretary and advised him to
consider as final and irrevocable the withdrawal of their VOS as, under the Luz Farms
doctrine, their entire landholding is exempted from the CARL.

On September 14, 1995, then DAR Secretary Ernesto D. Garilao issued an Order
partially granting the application of respondents for exemption from the coverage of
CARL. Applying the retention limits outlined in the DAR A.O. No. 9, petitioner exempted
1,209 hectares of respondents land for grazing purposes, and a maximum of 102.5635
hectares for infrastructure. Petitioner ordered the rest of respondents landholding to be
segregated and placed under Compulsory Acquisition.

Respondents moved for reconsideration. They contend that their entire landholding
should b exempted as it is devoted exclusively to cattleraising. Their motion was denied.

They filed a notice of appeal with the Office of the President. On October 9, 2001, the
Office of the President affirmed the impugned Order of petitioner DAR. It ruled that DAR
A.O. No. 9, s. 1993, does not run counter to the Luz Farms case as the A.O. Provided
the guidelines to determine whether a certain parcel of land is being used for
cattleraising. However, the issue on the constitutionality of the assailed A.O. was left for
the determination of the courts as the sole arbiters of such issue.

On appeal, the Court of Appeals ruled in favor of the respondents. It declared DAR A.O.
No. 9, s. 1993, void for being contrary to the intent of the 1987 Constitutional
Commission to exclude livestock farms from the land reform program of the
government.

Issue:

Whether or not DAR A.O. No. 9, series of 1993, which prescribes a maximum retention
limit for owners of lands devoted to livestock raising is constitutional.

Ruling:

No. In the case at bar, we find that the impugned A.O. is invalid as it contravenes the
Constitution. The A.O. sought to regulate livestock farms by including them in the
coverage of agrarian reform and prescribing a maximum retention limit for their
ownership. However, the deliberations of the 1987 Constitutional Commission show a
clear intent to exclude, inter alia, all lands exclusively devoted to livestock, swine and
poultryraising. The Court clarified in the Luz Farms case that livestock, swine and
poultryraising are industrial activities and do not fall within the definition of agriculture or
agricultural activity. The raising of livestock, swine and poultry is different from crop or
tree farming. It is an industrial, not an agricultural, activity. A great portion of the
investment in this enterprise is in the form of industrial fixed assets, such as: animal
housing structures and facilities, drainage, waterers and blowers, feedmill with grinders,
mixers, conveyors, exhausts and generators, extensive warehousing facilities for feeds
and other supplies, antipollution equipment like biogas and digester plants augmented
by lagoons and concrete ponds, deepwells, elevated water tanks, pumphouses,
sprayers, and other technological appurtenances.

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

Milestone Farms Inc. vs. Office President

February 23, 2011

Facts:

Petitioner Milestone Farms, Inc. was incorporated with the SEC. On June 10, 1988, a
new agrarian reform law, Republic Act (R.A.) No. 6657, otherwise known as the
Comprehensive Agrarian Reform Law (CARL), took effect, which included the raising of
livestock, poultry, and swine in its coverage. However, on December 4, 1990, this Court,
sitting en banc, ruled in Luz Farms v. Secretary of the Department of Agrarian Reform
that agricultural lands devoted to livestock, poultry, and/or swine raising are excluded
from the Comprehensive Agrarian Reform Program (CARP).

Thus, in May 1993, petitioner applied for the exemption/exclusion of its 316.0422-
hectare property. Meanwhile, on December 27, 1993, the Department of Agrarian
Reform (DAR) issued Administrative Order No. 9, Series of 1993 (DAR A.O. No. 9),
setting forth rules and regulations to govern the exclusion of agricultural lands used for
livestock, poultry, and swine raising from CARP coverage. Thus, on January 10, 1994,
petitioner re-documented its application pursuant to DAR A.O. No. 9.

Acting on the said application, the DARs Land Use Conversion and Exemption
Committee (LUCEC) of Region IV conducted an ocular inspection on petitioner’s
property and arrived at the following findings:

The LUCEC, thus, recommended the exemption of petitioner’s 316.0422-hectare

property from the coverage of CARP. Adopting the LUCEC's findings and
recommendation, DAR Regional Director Percival Dalugdug (Director Dalugdug) issued
an Order dated June 27, 1994, exempting petitioner’s 316.0422-hectare property from
CARP.

The Southern Pinugay Farmers Multi-Purpose Cooperative, Inc. (Pinugay Farmers),

represented by Timiano Balajadia, Sr. (Balajadia), moved for the reconsideration of the
said Order, but the same was denied by Director Dalugdug in his Order dated
November 24, 1994.Subsequently, the Pinugay Farmers filed a letter-appeal with the
DAR Secretary.

Correlatively, on June 4, 1994, petitioner filed a complaint for Forcible Entry against
Balajadia and company before the Municipal Circuit Trial Court (MCTC) of Teresa-
Baras, Rizal, docketed as Civil Case No. 781-T.The MCTC ruled in favor of petitioner,
but the decision was later reversed by the Regional Trial Court, Branch 80, of Tanay,
Rizal. Ultimately, the case reached the CA, which, in its Decision dated October 8,
1999, reinstated the MCTCs ruling, ordering Balajadia and all defendants therein to
vacate portions of the property covered by TCT Nos. M-6013, M-8796, and M-8791. In
its Resolution dated July 31, 2000, the CA held that the defendants therein failed to
timely file a motion for reconsideration, given the fact that their counsel of record
received its October 8, 1999 Decision; hence, the same became final and executory.

In the meantime, R.A. No. 6657 was amended by R.A. No. 7881, which was approved
on February 20, 1995. Private agricultural lands devoted to livestock, poultry, and swine
raising were excluded from the coverage of the CARL.

On January 21, 1997, then DAR Secretary Ernesto D. Garilao issued an Order
exempting from CARP only 240.9776 hectares of the 316.0422 hectares previously
exempted by Director Dalugdug, and declaring 75.0646 hectares of the property to be
covered by CARP.

On February 4, 2000, the Office of the President rendered a decision reinstating Order
declared the entire 316.0422-hectare property exempt from the coverage of CARP.

Consequently, petitioner sought recourse from the CA. the CA found that, based on the
documentary evidence presented, the property subject of the application for exclusion
had more than satisfied the animal-land and infrastructure-animal ratios under DAR
A.O. No. 9. The CA also found that petitioner applied for exclusion long before the
effectivity of DAR A.O. No. 9, thus, negating the claim that petitioner merely converted
the property for livestock, poultry, and swine raising in order to exclude it from CARP
coverage. Hence, the instant petition is hereby granted. Finally, petitioner’s motion for
reconsideration was denied by the CA.

Issue:

Whether or not the land in question is exempted from CARL coverage.

Ruling:

In the case at bar, we find that the impugned A.O. is invalid as it contravenes the
Constitution. The A.O. sought to regulate livestock farms by including them in the
coverage of agrarian reform and prescribing a maximum retention limit for their
ownership. However, the deliberations of the 1987 Constitutional Commission show a
clear intent to exclude, inter alia,all lands exclusively devoted to livestock, swine and
poultry-raising. The Court clarified in the Luz Farms case that livestock, swine and
poultry-raising are industrial activities and do not fall within the definition of "agriculture"
or "agricultural activity." The raising of livestock, swine and poultry is different from crop
or tree farming. It is an industrial, not an agricultural, activity. A great portion of the
investment in this enterprise is in the form of industrial fixed assets, such as: animal
housing structures and facilities, drainage, waterers and blowers, feedmill with grinders,
mixers, conveyors, exhausts and generators, extensive warehousing facilities for feeds
and other supplies, anti-pollution equipment like bio-gas and digester plants augmented
by lagoons and concrete ponds, deepwells, elevated water tanks, pump houses,
sprayers, and other technological appurtenances.

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

While it is true that an issue which was neither alleged in the complaint nor raised
during the trial cannot be raised for the first time on appeal as it would be offensive to
the basic rules of fair play, justice, and due process,the same is not without
exception,such as this case. The CA, under Section 3,Rule 43 of the Rules of Civil
Procedure, can, in the interest of justice, entertain and resolve factual issues. After all,
technical and procedural rules are intended to help secure, and not suppress,
substantial justice. A deviation from a rigid enforcement of the rules may thus be
allowed to attain the prime objective of dispensing justice, for dispensation of justice is
the core reason for the existence of courts.Moreover, petitioner cannot validly claim that
it was deprived of due process because the CA afforded it all the opportunity to be
heard.The CA even directed petitioner to file its comment on the Supplement, and to
prove and establish its claim that the subject property was excluded from the coverage
of the CARP. Petitioner actively participated in the proceedings before the CA by
submitting pleadings and pieces of documentary evidence, such as the Investigating
Teams Report and judicial affidavits. The CA also went further by setting the case for
hearing. In all these proceedings, all the parties’ rights to due process were amply
protected and recognized.

Central Mindanao University vs. DARAB

G.R. No. 100091, October 22, 1992
Facts:

Central Mindanao University (CMU) is an agricultural university. From its beginning,

CMU was the answer to the crying need for training people in order to develop the
agricultural potential of the island of Mindanao. Those who planned and established the
school had a vision as to the future development of that part of the Philippines.
Then Pres. Carlos Garcia issued Proclamation No. 476, withdrawing from sale or
settlement and reserving for the Mindanao Agricultural College, a site which would be
the future campus of what is now the CMU.

In the course of the cadastral hearing of the school's petition for registration of the
aforementioned grant of agricultural land, several tribes belonging to cultural
communities, opposed the petition claiming ownership of certain ancestral lands forming
part of the tribal reservations. Some of the claims were granted so that what was titled
to the present petitioner school was reduced from 3,401 hectares to 3,080 hectares.

It was 1984, the CMU approved Resolution No. 160, adopting a livelihood program
called "Kilusang Sariling Sikap Program" under which the land resources of the school
were leased to its faculty and employees.  Under this program the faculty and staff
combine themselves to groups of five members each, and the CMU provided technical
know-how, practical training and all kinds of assistance, to enable each group to
cultivate 4 to 5 hectares of land for the lowland rice project. Each group pays the
University a service fee and also a land use participant's fee. The contract prohibits
participants and their hired workers to establish houses or live in the project area and to
use the cultivated land as a collateral for any kind of loan. It was expressly stipulated
that no landlord-tenant relationship existed between the CMU and the faculty and/or
employees. This particular program was conceived as a multi-disciplinary applied
research extension and productivity program to utilize available land, train people in
modern agricultural technology and at the same time give the faculty and staff
opportunities within the confines of the CMU reservation to earn additional income to
augment their salaries.

When Dr. Leonardo Chua became President of the Univertisy in July 1986, he
discontinued the Agri-Business Management and Training Project, due to losses
incurred while carrying on the said project. Some CMU personnel, among whom were
the complainants, were laid-off when this project was discontinued.

Another project was launched o develop unutilized land resources, mobilize and
promote the spirit of self-reliance, provide socio-economic and technical training in
actual field project implementation and augment the income of the faculty and the staff.
This has the same nature as of the Kilusang Sariling Sikap Program with an express
provision that there would be no tenant-landlord relationship.

The contract expired. Some were renewed, some were not. The non-renewal of the
contracts, the discontinuance of the rice, corn and sugar cane project, the loss of jobs
due to termination or separation from the service and the alleged harassment by school
authorities, all contributed to, and precipitated the filing of the complaint.
DARAB found that the private respondents were not tenants and cannot therefore be
beneficiaries under the Comprehensive Agrarian Reform Program (CARP). At the same
time, the DARAB ordered the segregation of 400 hectares of suitable, compact and
contiguous portions of the CMU land and their inclusion in the CARP for distribution to
qualified beneficiaries.
Complainants Obrique, et al. claimed that they are tenants of the CMU and/or landless
peasants claiming/occupying a part or portion of the CMU.

Issue:

Whether or not the subject land is covered by CARP.

Ruling:

No. The 400 hectares ordered segregated by the DARAB and affirmed by the Court of
Appeals (CA) in its Decision dated August 20, 1990, is not covered by the CARP
because:
It is not alienable and disposable land of the public domain. The CMU land reservation
is not in excess of specific limits as determined by Congress; It is private land registered
and titled in the name of its lawful owner, the Central Mindanao University; and, It is
exempt from coverage under Section 10 of R.A. 6657 because the lands are actually,
directly and exclusively used and found to be necessary for school site and campus,
including experimental farm stations for educational purposes, and for establishing seed
and seedling research and pilot production centers.

Department of Agrarian Reform (DAR) vs. Department of Education, Culture And

Sports (DECS)
G.R. No. 158228, March 23, 2004
Facts:

Lot No. 2509 and Lot No. 817-D which were donated by the late Esteban Jalandoni to
respondent DECS (formerly Bureau of Education). Consequently, titles thereto were
transferred in the name of respondent DECS .
Respondent DECS leased the lands to Anglo Agricultural Corporation for 10 agricultural
crop years, commencing from 1984-1994. The contract of lease was subsequently
renewed for another 10 agricultural crop years or until 2005. On June 10, 1993, Eugenio
Alpar and several others, claiming to be permanent and regular farm workers of the
subject lands, filed a petition for Compulsory Agrarian Reform Program (CARP)
coverage with the Municipal Agrarian Reform Office (MARO) of Escalante.
After investigation, MARO Jacinto R. Piñosa, sent a "Notice of Coverage" to respondent
DECS, stating that the subject lands are now covered by CARP and inviting its
representatives for a conference with the farmer beneficiaries. The recommendation for
coverage was approved by DAR Regional Director Dominador B. Andres approved the
r, the dispositive portion of which reads:
Respondent DECS appealed the case to the Secretary of Agrarian Reform which
affirmed the Order of the Regional Director. Respondent DECS filed a petition for
certiorari with the Court of Appeals, which set aside the decision of the Secretary of
Agrarian Reform. Hence, the instant petition for review.
Issue:
Whether or not the subject properties are exempt from the coverage of Republic Act No.
6657, otherwise known as the Comprehensive Agrarian Reform Law of 1998 (CARL).
Ruling:

No. While respondent DECS sought exemption from CARP coverage on the ground
that all the income derived from its contract of lease with Anglo Agricultural Corporation
were actually, directly and exclusively used for educational purposes, such as for the
repairs and renovations of schools in the nearby locality, the court is inclined with the
petitioner’s argument that the lands subject hereof are not exempt from the CARP
coverage because the same are not actually, directly and exclusively used as school
sites or campuses, as they are in fact leased to Anglo Agricultural Corporation. Further,
to be exempt from the coverage, it is the land per se, not the income derived therefrom,
that must be actually, directly and exclusively used for educational purposes.

Section 10 of R.A. No. 6657 enumerates the types of lands which are exempted from
the coverage of CARP as well as the purposes of their exemption specifying those
“lands actually, directly and exclusively used and found to be necessary for national
defense, school sites and campuses, including experimental farm stations operated by
public or private schools for educational purposes, …, shall be exempt from the
coverage of this Act.”
Clearly, a reading of the paragraph shows that, in order to be exempt from the
coverage: 1) the land must be "actually, directly, and exclusively used and found to be
necessary;" and 2) the purpose is "for school sites and campuses, including
experimental farm stations operated by public or private schools for educational
purposes."

Roxas & Company, Inc. vs. DAMBA-NFSW and DAR

G.R. Nos. 149548, 167505, December 4, 2009

Facts:

Petitioner, Roxas & Co. is a domestic corporation and is the registered owner of three
haciendas. On July 27, 1987, the Congress of the Philippines formally convened and
took over legislative power from the President. This Congress passed Republic Act No.
6657, the Comprehensive Agrarian Reform Law (CARL) of 1988. The Act was signed
by the President on June 10, 1988 and took effect on June 15, 1988. Before the law’s
effectivity, on May 6, 1988, petitioner filed with respondent DAR a voluntary offer to sell
Hacienda Caylaway pursuant to the provisions of E.O. No. 229. Haciendas Palico and
Banilad were later placed under compulsory acquisition by Department of Agrarian
Reform in accordance with the CARL. On August 6, 1992 petitioner, through its
President, sent a letter to the Secretary of DAR withdrawing its voluntary offer to sell of
Hacienda Caylaway.
The Sangguniang Bayan of Nasugbu, Batangas allegedly authorized the reclassification
of Hacienda Caylaway from agricultural to non-agricultural. As a result, petitioner
informed respondent DAR that it was applying for conversion of Hacienda Caylaway
from agricultural to other uses. The petitions nub on the interpretation of Presidential
Proclamation No. 1520 reads: DECLARING THE MUNICIPALITIES OF
MARAGONDON AND TERNATE IN CAVITE PROVINCE AND THE MUNICIPALITY
OF NASUGBU IN BATANGAS AS A TOURIST ZONE, AND FOR OTHER PURPOSES.
Essentially, Petitioner, filed its application for conversion of its three haciendas from
agricultural to non-agricultural on the assumption that the issuance of Presidential
Proclamation No. 1520 which declared Nasugbu, Batangas as a tourism zone,
reclassified them to non-agricultural uses. Its pending application notwithstanding, the
Department of Agrarian Reform (DAR) issued Certificates of Land Ownership Award
(CLOAs) to the farmer-beneficiaries in the three haciendas including CLOA No. 6654
which was issued on October 15, 1993 covering 513.983 hectares, the subject of G.R.
No. 167505. Petitioner filed with the DAR an application for exemption from the
coverage of the Comprehensive Agrarian Reform Program (CARP) of 1988 on the basis
of PP 1520 and of DAR Administrative Order (AO) No. 6, Series of 19943 which states
that all lands already classified as commercial, industrial, or residential before the
effectivity of CARP no longer need conversion clearance from the DAR.

Issue:

Whether or not Presidential Proclamation No. 1520 reclassified in 1975 all lands in the
Maragondon-Ternate-Nasugbu tourism zone to non- agricultural use to exempt Roxas &
Co.’s three haciendas in Nasugbu from CARP coverage.

Ruling:

No. Presidential Proclamation No. 1520 did not automatically convert the agricultural
lands in the three municipalities including Nasugbu to non-agricultural lands.
Presidential Proclamation No. 1520 merely recognized the "potential tourism value" of
certain areas within the general area declared as tourism zones. It did not reclassify the
areas to non-agricultural use. It bears emphasis that a mere reclassification of an
agricultural land does not automatically allow a landowner to change its use since there
is still that process of conversion before one is permitted to use it for other purposes.

Petitioner, Roxas & Co., can only look to the provisions of the Tourism Act, and not to
Presidential Proclamation No. 1520, for possible exemption.

Province of Camarines Sur vs. Court of Appeals

G.R. No. 103125, May 17, 1993
Facts:

On December 22, 1988, the Sangguniang Panlalawigan of the Province of Camarines

Sur passed Resolution No. 129, Series of 1988, authorizing the Provincial Governor to
purchase or expropriate property contiguous to the provincial capitol site, in order to
establish a pilot farm for non-food and non-traditional agricultural crops and a housing
project for provincial government employees.

Pursuant to the Resolution, the Province, through its Governor, Hon. Villafuerte, filed
two separate cases for expropriation against Ernesto N. San Joaquin and Efren N. San
Joaquin.

The San Joaquins moved to dismiss the complaints on the ground of inadequacy of the
price offered for their property. The trial court denied the motion to dismiss and
authorized the Province of Camarines Sur to take possession of the property upon the
deposit with the Clerk of Court of the amount of Php 5, 714.00, the amount provisionally
fixed by the trial court to answer for damages that private respondents may suffer in the
event that the expropriation cases do not prosper. The trial court issued a writ of
possession in an order dated January18, 1990.

The Solicitor General stated that under Section 9 of the Local Government Code, there
was no need for the approval by the Office of the President of the exercise by the
Sangguniang Panlalawigan of the right of eminent domain. However, the Solicitor
General expressed the view that the Province of Camarines Sur must first secure the
approval of the Department of Agrarian Reform of the plan to expropriate the lands of
petitioners for use as a housing project.

The Court of Appeals set aside the order of the trial court, allowing the Province of
Camarines Sur to take possession of private respondents' lands and the order denying
the admission of the amended motion to dismiss. It also ordered the trial court to
suspend the expropriation proceedings until after the Province of Camarines Sur shall
have submitted the requisite approval of the Department of Agrarian Reform to convert
the classification of the property of the private respondents from agricultural to non-
agricultural land.

Issue:

Whether or not the expropriation of agricultural lands by local government units is

subject, to the prior approval of the Secretary of the Agrarian Reform, as the
implementator of the agrarian reform program

Ruling:

No. It is true that local government units have no inherent power of eminent domain and
can exercise it only when expressly authorized by the legislature (City of Cincinnati v.
Vester, 28l US 439, 74 L.ed. 950, 50 SCt. 360). It is also true that in delegating the
power to expropriate, the legislature may retain certain control or impose certain
restraints on the exercise thereof by the local governments (Joslin Mfg. Co. v.
Providence, 262 US 668 67 L. ed. 1167, 43 S Ct. 684). While such delegated power
may be a limited authority, it is complete within its limits. Moreover, the limitations on the
exercise of the delegated power must be clearly expressed, either in the law conferring
the power or in other legislations.

Resolution No. 129, Series of 1988, was promulgated pursuant to Section 9 of B.P. Blg.
337, the Local Government Code, which provides:

A local government unit may, through its head and acting pursuant to a resolution of its
Sanggunian exercise the right of eminent domain and institute condemnation
proceedings for public use or purpose.

Section 9 of B.P. Blg. 337 does not intimate in the least that local government, units
must first secure the approval of the Department of Land Reform for the conversion of
lands from agricultural to non-agricultural use, before they can institute the necessary
expropriation proceedings. Likewise, there is no provision in the Comprehensive
Agrarian Reform Law which expressly subjects the expropriation of agricultural lands by
local government units to the control of the Department of Agrarian Reform. The closest
provision of law that the Court of Appeals could cite to justify the intervention of the
Department of Agrarian Reform in expropriation matters is Section 65 of the
Comprehensive Agrarian Reform Law, which reads:

Sec. 65. Conversion of Lands. — After the lapse of five (5) years from its award, when
the land ceases to be economically feasible and sound for, agricultural purposes, or the
locality has become urbanized and the land will have a greater economic value for
residential, commercial or industrial purposes, the DAR, upon application of the
beneficiary or the landowner, with due notice to the affected parties, and subject to
existing laws, may authorize the reclassification or conversion of the land and its
disposition: Provided, that the beneficiary shall have fully paid his obligation.

The opening, adverbial phrase of the provision sends signals that it applies to lands
previously placed under the agrarian reform program as it speaks of "the lapse of five
(5) years from its award."The rules on conversion of agricultural lands found in Section
4 (k) and 5 (1) of Executive Order No. 129-A, Series of 1987, cannot be the source of
the authority of the Department of Agrarian Reform to determine the suitability of a
parcel of agricultural land for the purpose to which it would be devoted by the
expropriating authority. While those rules vest on the Department of Agrarian Reform
the exclusive authority to approve or disapprove conversions of agricultural lands for
residential, commercial or industrial uses, such authority is limited to the applications for
reclassification submitted by the land owners or tenant beneficiaries.
Statutes conferring the power of eminent domain to political subdivisions cannot be
broadened or constricted by implication (Schulman v. People, 10 N.Y. 2d. 249, 176 N.E.
2d. 817, 219 NYS 2d. 241).

To sustain the Court of Appeals would mean that the local government units can no
longer expropriate agricultural lands needed for the construction of roads, bridges,
schools, hospitals, etc, without first applying for conversion of the use of the lands with
the Department of Agrarian Reform, because all of these projects would naturally
involve a change in the land use. In effect, it would then be the Department of Agrarian
Reform to scrutinize whether the expropriation is for a public purpose or public use.

Ordinarily, it is the legislative branch of the local government unit that shall determine
whether the use of the property sought to be expropriated shall be public, the same
being an expression of legislative policy. The courts defer to such legislative
determination and will intervene only when a particular undertaking has no real or
substantial relation to the public use.