Natalia Realty, Inc.

and Estate Developer and Investors Corp vs DAR

Facts:
Natalia is the owner of 3 contiguous parcels of land with an area of 120.9793 hectares, 1.3205 hectares
and 2.7080 hectares or a total of 125.0078 hectares, which are covered by TCT No. 31527. Presidential
Proclamation No. 1637 set aside 20,312 hectares of land as townsite areas to absorb the population
overspill in the metropolis which were designated as the Lungsod Silangan Townsite. The Natalia
properties are situated within the areas proclaimed as townsite reservation. Since private landowners
were allowed to develop their properties into low-cost housing subdivisions with the reservation, petitioner
EDIC as developer of Natalia applied for and was granted preliminary approval and location clearances
by the Human Settlements Regulatory Commission, which Natalia thereafter became Antipolo Hills
Subdivision. On June 15 1988, Ra 6657 went to effect. Respondent issed a Notice of Coverage on the
undeveloped portions of Antipolo Hills Subdivision. Natalia and EDIC immediately registered its objection
to the notice of coverage and requested the cancellation of the Notice of Coverage.
Natalia and EDIC both argued that the properties ceased to be agricultural lands when they were included
in the areas reserved by Presidential Proclamation for the townsite reservation. DAR then contended that
the permits granted were not valid and binding since they did not comply with t he implementing
Standards, Rules and Regulations of PD 957 (The Subdivision and Condominium Buyers Protective
Decree), and that there was no valid conversion of the properties.
Issue:
Whether or not lands not classified for agricultural use, as approved by the Housing and Land Use
Regulatory Board and its agencies prior to June 15, 1988 covered by RA 6657.
Ruling:
No, Sec. 4 of RA 6657 provides that CARL shall cover, regardless of tenurial arrangement and commodity
produced, all public and private agricultural lands. And agricultural lands is referred to as land devoted to
agricultural activity and not classified as mineral, forst, residential, commercial or industrial land. Thus, the
underdeveloped portions of the Antipolo Hills Subdivision cannot be considered as agricultural lands for
this land was intended for residential use. They ceased to be agricultural land by virtue of the Presidential
Proclamation No. 1637.

NATALIA REALTY, INC., AND ESTATE DEVELOPERS AND INVESTORS CORP., petitioners,
vs.
DEPARTMENT OF AGRARIAN REFORM, SEC. BENJAMIN T. LEONG and DIR. WILFREDO
LEANO, DAR REGION IV, respondents.
Lino M. Patajo for petitioners.
The Solicitor General for respondents.

BELLOSILLO, J.:
Are lands already classified for residential, commercial or industrial use, as approved by the Housing
and Land Use Regulatory Board and its precursor agencies 1 prior to 15 June 1988, 2 covered by R.A.
6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988? This is the pivotal issue in
this petition for certiorari assailing the Notice of Coverage 3 of the Department of Agrarian Reform over
parcels of land already reserved as townsite areas before the enactment of the law.
Petitioner Natalia Realty, Inc. (NATALIA, for brevity) is the owner of three (3) contiguous parcels of
land located in Banaba, Antipolo, Rizal, with areas of 120.9793 hectares, 1.3205 hectares and
2.7080 hectares, or a total of 125.0078 hectares, and embraced in Transfer Certificate of Title No.
31527 of the Register of Deeds of the Province of Rizal.
On 18 April 1979, Presidential Proclamation No. 1637 set aside 20,312 hectares of land located in
the Municipalities of Antipolo, San Mateo and Montalban as townsite areas to absorb the population
overspill in the metropolis which were designated as the Lungsod Silangan Townsite. The NATALIA
properties are situated within the areas proclaimed as townsite reservation.
Since private landowners were allowed to develop their properties into low-cost housing subdivisions
within the reservation, petitioner Estate Developers and Investors Corporation (EDIC, for brevity), as
developer of NATALIA properties, applied for and was granted preliminary approval and locational
clearances by the Human Settlements Regulatory Commission. The necessary permit for Phase I of
the subdivision project, which consisted of 13.2371 hectares, was issued sometime in 1982; 4 for
Phase II, with an area of 80,000 hectares, on 13 October 1983; 5 and for Phase III, which consisted of the
remaining 31.7707 hectares, on 25 April 1986. 6 Petitioner were likewise issued development
permits 7 after complying with the requirements. Thus the NATALIA properties later became the Antipolo
Hills Subdivision.
On 15 June 1988, R.A. 6657, otherwise known as the "Comprehensive Agrarian Reform Law of
1988" (CARL, for brevity), went into effect. Conformably therewith, respondent Department of
Agrarian Reform (DAR, for brevity), through its Municipal Agrarian Reform Officer, issued on 22
November 1990 a Notice of Coverage on the undeveloped portions of the Antipolo Hills Subdivision
which consisted of roughly 90.3307 hectares. NATALIA immediately registered its objection to the
notice of Coverage.

EDIC also protested to respondent Director Wilfredo Leano of the DAR Region IV Office and twice
wrote him requesting the cancellation of the Notice of Coverage.
On 17 January 1991, members of the Samahan ng Magsasaka sa Bundok Antipolo, Inc. (SAMBA,
for the brevity), filed a complaint against NATALIA and EDIC before the DAR Regional Adjudicator to
restrain petitioners from developing areas under cultivation by SAMBA members. 8 The Regional
Adjudicator temporarily restrained petitioners from proceeding with the development of the subdivision.
Petitioners then moved to dismiss the complaint; it was denied. Instead, the Regional Adjudicator issued
on 5 March 1991 a Writ of Preliminary Injunction.
Petitioners NATALIA and EDIC elevated their cause to the DAR Adjudication Board (DARAB);
however, on 16 December 1991 the DARAB merely remanded the case to the Regional Adjudicator
for further proceedings. 9
In the interim, NATALIA wrote respondent Secretary of Agrarian Reform reiterating its request to set
aside the Notice of Coverage. Neither respondent Secretary nor respondent Director took action on
the protest-letters, thus compelling petitioners to institute this proceeding more than a year
thereafter.
NATALIA and EDIC both impute grave abuse of discretion to respondent DAR for including
undedeveloped portions of the Antipolo Hills Subdivision within the coverage of the CARL. They
argue that NATALIA properties already ceased to be agricultural lands when they were included in
the areas reserved by presidential fiat for the townsite reservation.
Public respondents through the Office of the Solicitor General dispute this contention. They maintain
that the permits granted petitioners were not valid and binding because they did not comply with the
implementing Standards, Rules and Regulations of P.D. 957, otherwise known as "The Subdivision
and Condominium Buyers Protective Decree," in that no application for conversion of the NATALIA
lands from agricultural residential was ever filed with the DAR. In other words, there was no valid
conversion. Moreover, public respondents allege that the instant petition was prematurely filed
because the case instituted by SAMBA against petitioners before the DAR Regional Adjudicator has
not yet terminated. Respondents conclude, as a consequence, that petitioners failed to fully exhaust
administrative remedies available to them before coming to court.
The petition is impressed with merit. A cursory reading of the Preliminary Approval and Locational
Clearances as well as the Development Permits granted petitioners for Phases I, II and III of the
Antipolo Hills Subdivision reveals that contrary to the claim of public respondents, petitioners
NATALIA and EDIC did in fact comply with all the requirements of law.
Petitioners first secured favorable recommendations from the Lungsod Silangan Development
Corporation, the agency tasked to oversee the implementation of the development of the townsite
reservation, before applying for the necessary permits from the Human Settlements Regulatory
Commission. 10 And, in all permits granted to petitioners, the Commission
stated invariably therein that the applications were in "conformance" 11 or "conformity" 12 or
"conforming" 13 with the implementing Standards, Rules and Regulations of P.D. 957. Hence, the
argument of public respondents that not all of the requirements were complied with cannot be sustained.

As a matter of fact, there was even no need for petitioners to secure a clearance or prior approval
from DAR. The NATALIA properties were within the areas set aside for the Lungsod Silangan
Reservation. Since Presidential Proclamation No. 1637 created the townsite reservation for the
purpose of providing additional housing to the burgeoning population of Metro Manila, it in effect
converted for residential use what were erstwhile agricultural lands provided all requisites were met.
And, in the case at bar, there was compliance with all relevant rules and requirements. Even in their
applications for the development of the Antipolo Hills Subdivision, the predecessor agency of
HLURB noted that petitioners NATALIA and EDIC complied with all the requirements prescribed by
P.D. 957.
The implementing Standards, Rules and Regulations of P.D. 957 applied to all subdivisions and
condominiums in general. On the other hand, Presidential Proclamation No. 1637 referred only to
the Lungsod Silangan Reservation, which makes it a special law. It is a basic tenet in statutory
construction that between a general law and a special law, the latter prevails. 14
Interestingly, the Office of the Solicitor General does not contest the conversion of portions of the
Antipolo Hills Subdivision which have already been developed. 15 Of course, this is contrary to its
earlier position that there was no valid conversion. The applications for the developed and undeveloped
portions of subject subdivision were similarly situated. Consequently, both did not need prior DAR
approval.
We now determine whether such lands are covered by the CARL. Section 4 of R.A. 6657 provides
that the CARL shall "cover, regardless of tenurial arrangement and commodity produced, all public
and private agricultural lands." As to what constitutes "agricultural land," it is referred to as "land
devoted to agricultural activity as defined in this Act and not classified as mineral, forest, residential,
commercial or industrial land." 16 The deliberations of the Constitutional Commission confirm this
limitation. "Agricultural lands" are only those lands which are "arable and suitable agricultural lands" and
"do not include commercial, industrial and residential lands." 17
Based on the foregoing, it is clear that the undeveloped portions of the Antipolo Hills Subdivision
cannot in any language be considered as "agricultural lands." These lots were intended for
residential use. They ceased to be agricultural lands upon approval of their inclusion in the Lungsod
Silangan Reservation. Even today, the areas in question continued to be developed as a low-cost
housing subdivision, albeit at a snail's pace. This can readily be gleaned from the fact that SAMBA
members even instituted an action to restrain petitioners from continuing with such development.
The enormity of the resources needed for developing a subdivision may have delayed its completion
but this does not detract from the fact that these lands are still residential lands and outside the
ambit of the CARL.
Indeed, lands not devoted to agricultural activity are outside the coverage of CARL. These include
lands previously converted to non-agricultural uses prior to the effectivity of CARL by government
agencies other than respondent DAR. In its Revised Rules and Regulations Governing Conversion
of Private Agricultural Lands to Non-Agricultural Uses, 18 DAR itself defined "agricultural land" thus
. . . Agricultural lands refers to those devoted to agricultural activity as defined in R.A.
6657 and not classified as mineral or forest by the Department of Environment and

Natural Resources (DENR) and its predecessor agencies, and not classified in town
plans and zoning ordinances as approved by the Housing and Land Use Regulatory
Board (HLURB) and its preceding competent authorities prior to 15 June 1988 for
residential, commercial or industrial use.
Since the NATALIA lands were converted prior to 15 June 1988, respondent DAR is bound by such
conversion. It was therefore error to include the undeveloped portions of the Antipolo Hills
Subdivision within the coverage of CARL.
Be that as it may, the Secretary of Justice, responding to a query by the Secretary of Agrarian
Reform, noted in an Opinion 19 that lands covered by Presidential Proclamation No. 1637, inter alia, of
which the NATALIA lands are part, having been reserved for townsite purposes "to be developed as
human settlements by the proper land and housing agency," are "not deemed 'agricultural lands' within
the meaning and intent of Section 3 (c) of R.A. No. 6657. " Not being deemed "agricultural lands," they
are outside the coverage of CARL.
Anent the argument that there was failure to exhaust administrative remedies in the instant petition,
suffice it to say that the issues raised in the case filed by SAMBA members differ from those of
petitioners. The former involve possession; the latter, the propriety of including under the operation
of CARL lands already converted for residential use prior to its effectivity.
Besides, petitioners were not supposed to wait until public respondents acted on their letter-protests,
this after sitting it out for almost a year. Given the official indifference, which under the circumstances
could have continued forever, petitioners had to act to assert and protect their interests. 20
In fine, we rule for petitioners and hold that public respondents gravely abused their discretion in
issuing the assailed Notice of Coverage of 22 November 1990 by of lands over which they no longer
have jurisdiction.
WHEREFORE, the petition for Certiorari is GRANTED. The Notice of Coverage of 22 November
1990 by virtue of which undeveloped portions of the Antipolo Hills Subdivision were placed under
CARL coverage is hereby SET ASIDE.
SO ORDERED.

GABINO ALITA, JESUS JULIAN, JR., JESUS JULIAN, SR., PEDRO RICALDE, VICENTE
RICALDE and ROLANDO SALAMAR, petitioners,
vs.
THE HONORABLE COURT OF APPEALS, ENRIQUE M. REYES, PAZ M. REYES and FE M.
REYES,respondents.
Bureau of Agrarian Legal Assistance for petitioners.
Leonardo N. Zulueta for Enrique Reyes, et al. Adolfo S. Azcuna for private respondents.

PARAS, J.:
Before us is a petition seeking the reversal of the decision rendered by the respondent Court of
Appeals**on March 3, 1987 affirming the judgment of the court a quo dated April 29, 1986, the
dispositive portion of the trial court's decision reading as follows;
WHEREFORE, the decision rendered by this Court on November 5, 1982 is hereby
reconsidered and a new judgment is hereby rendered:
1. Declaring that Presidential Decree No. 27 is inapplicable to lands obtained thru the
homestead law,
2. Declaring that the four registered co-owners will cultivate and operate the
farmholding themselves as owners thereof; and
3. Ejecting from the land the so-called tenants, namely; Gabino Alita, Jesus Julian,
Sr., Jesus Julian, Jr., Pedro Ricalde, Vicente Ricalde and Rolando Salamar, as the
owners would want to cultivate the farmholding themselves.

No pronouncement as to costs.
SO ORDERED. (p. 31, Rollo)
The facts are undisputed. The subject matter of the case consists of two (2) parcels of land, acquired
by private respondents' predecessors-in-interest through homestead patent under the provisions of
Commonwealth Act No. 141. Said lands are situated at Guilinan, Tungawan, Zamboanga del Sur.
Private respondents herein are desirous of personally cultivating these lands, but petitioners refuse
to vacate, relying on the provisions of P.D. 27 and P.D. 316 and appurtenant regulations issued by
the then Ministry of Agrarian Reform (DAR for short), now Department of Agrarian Reform (MAR for
short).
On June 18, 1981, private respondents (then plaintiffs), instituted a complaint against Hon. Conrado
Estrella as then Minister of Agrarian Reform, P.D. Macarambon as Regional Director of MAR Region
IX, and herein petitioners (then defendants) for the declaration of P.D. 27 and all other Decrees,
Letters of Instructions and General Orders issued in connection therewith as inapplicable to
homestead lands.
Defendants filed their answer with special and affirmative defenses of July 8, 1981.
Subsequently, on July 19, 1982, plaintiffs filed an urgent motion to enjoin the defendants from
declaring the lands in litigation under Operation Land Transfer and from being issued land transfer
certificates to which the defendants filed their opposition dated August 4, 1982.
On November 5, 1982, the then Court of Agrarian Relations 16th Regional District, Branch IV,
Pagadian City (now Regional Trial Court, 9th Judicial Region, Branch XVIII) rendered its decision
dismissing the said complaint and the motion to enjoin the defendants was denied.
On January 4, 1983, plaintiffs moved to reconsider the Order of dismissal, to which defendants filed
their opposition on January 10, 1983.
Thus, on April 29, 1986, the Regional Trial Court issued the aforequoted decision prompting
defendants to move for a reconsideration but the same was denied in its Order dated June 6, 1986.
On appeal to the respondent Court of Appeals, the same was sustained in its judgment rendered on
March 3, 1987, thus:
WHEREFORE, finding no reversible error thereof, the decision appealed from is
hereby AFFIRMED.
SO ORDERED. (p. 34, Rollo)
Hence, the present petition for review on certiorari.

The pivotal issue is whether or not lands obtained through homestead patent are covered by the
Agrarian Reform under P.D. 27.
The question certainly calls for a negative answer.
We agree with the petitioners in saying that P.D. 27 decreeing the emancipation of tenants from the
bondage of the soil and transferring to them ownership of the land they till is a sweeping social
legislation, a remedial measure promulgated pursuant to the social justice precepts of the
Constitution. However, such contention cannot be invoked to defeat the very purpose of the
enactment of the Public Land Act or Commonwealth Act No. 141. Thus,
The Homestead Act has been enacted for the welfare and protection of the poor. The
law gives a needy citizen a piece of land where he may build a modest house for
himself and family and plant what is necessary for subsistence and for the
satisfaction of life's other needs. The right of the citizens to their homes and to the
things necessary for their subsistence is as vital as the right to life itself. They have a
right to live with a certain degree of comfort as become human beings, and the State
which looks after the welfare of the people's happiness is under a duty to safeguard
the satisfaction of this vital right. (Patricio v. Bayog, 112 SCRA 45)
In this regard, the Philippine Constitution likewise respects the superiority of the homesteaders'
rights over the rights of the tenants guaranteed by the Agrarian Reform statute. In point is Section 6
of Article XIII of the 1987 Philippine Constitution which provides:
Section 6. The State shall apply the principles of agrarian reform or stewardship,
whenever applicable in accordance with law, in the disposition or utilization of other
natural resources, including lands of public domain under lease or concession
suitable to agriculture, subject to prior rights, homestead rights of small settlers, and
the rights of indigenous communities to their ancestral lands.
Additionally, it is worthy of note that the newly promulgated Comprehensive Agrarian Reform Law of
1988 or Republic Act No. 6657 likewise contains a proviso supporting the inapplicability of P.D. 27 to
lands covered by homestead patents like those of the property in question, reading,
Section 6. Retention Limits. ...
... Provided further, That original homestead grantees or their direct compulsory heirs
who still own the original homestead at the time of the approval of this Act shall retain
the same areas as long as they continue to cultivate said homestead.'
WHEREFORE, premises considered, the decision of the respondent Court of Appeals sustaining the
decision of the Regional Trial Court is hereby AFFIRMED.
SO ORDERED

Roxas and Co., Inc. vs Court of Appeals

GR 127876
December 17, 1999

Facts: This case involves three haciendas in Nasugbu Batangas owned by

petitioner and the validity of the acquisition of these by the government
under RA 6657 or the Comprehensive Agrarian Reform Law of 9188.
Petitioner Roxas and Co. is a domestic corporation and is the registered
owner of three haciendas, namely Hacienda Palico, Banilad and Caylaway.
The events of this case occurred during the incumbency of then President
Aquino, in the exercise of legislative power, the President signed on July 22,
1987, Proclamation No. 131 instituting a Comprehensive Agrarian Reform
Program and Executive Order No. 229 providing the mechanisms necessary
to initially implement the program. Congress passed Republic Act No.

6657; the Act was signed by the President on June 10, 1988 and took effect
on June 15, 1988. Before the laws effectivity, petitioner filed with respondent
DAR a voluntary offer to sell Hacienda Caylaway pursuant to the provisions
of EO No. 229. Haciendas Palico and Banilad were later placed under
compulsory acquisition by respondent DAR in accordance with the CARL.

Petitioner was informed that 1,023.999 hectares of its land in Hacienda Palico
were subject to immediate acquisition and distribution by the government
under the CARL. Meanwhile in a letter dated May 4, 1993, petitioner applied
with the DAR for conversion of Haciendas Palico and Banilad from agricultural
to non-agricultural lands under the provisions of the CARL. Despite
petitioners application for conversion, respondent DAR proceeded with the
acquisition of the two Haciendas. The Land Bank of the Philippines trust
accounts as compensation for Hacienda Palico were replaced by respondent
DAR with cash and LBP bonds. On October 22, 1993, from the title of the
Hacienda, respondent DAR registered Certificate of Land Ownership Award
No. 6654. On October 30, 1993, CLOAs were distributed to farmer
beneficiaries. On December 18, 1991, the LBP certified certain amounts in
cash and LBP bonds had been earmarked as compensation for petitioners
land in Hacienda Banilad. On May 4, 1993, petitioner applied for conversion
of both Haciendas Palico and Banilad. Hacienda Caylaway was voluntarily
offered for sale to the government on May 6, 1988 before the effectivity of
the CARL. Nevertheless, on August 6, 1992, petitioner, through its President,
Eduardo Roxas, sent a letter to the Secretary of respondent DAR withdrawing
its VOS of Hacienda Caylaway. The Sangguniang Bayan of Nasugbu,
Batangas allegedly authorized the reclassification of Hacienda Caylaway
from agricultural to non-agricultural. As a result, petitioner informed
respondent DAR that it was applying for conversion of Hacienda Caylaway
from agricultural to other uses. Respondent DAR Secretary informed
petitioner that a reclassification of the land would not exempt it from
agrarian reform.
On August 24, 1993, petitioner instituted a case with respondent DAR
Adjudication Board praying for the cancellation of the CLOAs issued by
respondent DAR in the name of the farmers. Petitioner alleged that the
Municipality of Nasugbu, where the haciendas are located, had been
declared a tourist zone, that the land is not suitable for agricultural
production, and that the Sangguniang Bayan of Nasugbu had reclassified the
land to non-agricultural. Respondent DARAB held that the case involved the

prejudicial question of whether the property was subject to agrarian reform;

hence, this question should be submitted to the Office of the Secretary of
Agrarian Reform for determination.
Petitioner filed a petition with the CA. It questioned the expropriation of its
properties under the CARL and the denial of due process in the acquisition of
its landholdings. Meanwhile, the petition for conversion of the three
haciendas was denied. Petitioners petition was dismissed by the CA. Hence,
this recourse.
Issue: Whether or not the acquisition proceedings over the haciendas were
valid and in accordance with the law.
Held: No, for a valid implementation of the CAR Program, two notices are
required first the Notice of Coverage and letter of invitation to a preliminary
conference sent to the landowner, the representatives of the BARC, LBP,
farmer beneficiaries and other interested parties and second, the Notice of
Acquisition sent to the landowner under Section 16 of the CARL. The
importance of the first notice, the Notice of Coverage and the letter of
invitation to the conference, and its actual conduct cannot be
understated. They are steps designed to comply with the requirements of
administrative due process. The implementation of the CARL is an exercise
of the States police power and the power of eminent domain. To the extent
that the CARL prescribes retention limits to the landowners, there is an
exercise of police power for the regulation of private property in accordance
with the Constitution. But where, to carry out such regulation, the owners are
deprived of lands they own in excess of the maximum area allowed, there is
also a taking under the power of eminent domain. In this case, respondent
DAR claims that it sent a letter of invitation to petitioner corporation, through
Jaime Pimentel, the administrator of Hacienda Palico but he was not
authorized as such by the corporation. The SC stressed that the failure of
respondent DAR to comply with the requisites of due process in the
acquisition proceedings does not give the SC the power to nullify the CLOAs
already issued to the farmer beneficiaries. The Court said, to assume the
power is to short-circuit the administrative process, which has yet to run its
regular course. Respondent DAR must be given the chance to correct its
procedural lapses in the acquisition proceedings. In Hacienda Palico alone,
CLOA's were issued to 177 farmer beneficiaries in 1993. Since then until the
present, these farmers have been cultivating their lands. It goes against the
basic precepts of justice, fairness and equity to deprive these people,
through no fault of their own, of the land they till. The petition is granted in

part and the acquisition proceedings over the three haciendas are nullified
for respondent DAR's failure to observe due process.