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FINAL EXAMINATIONS

AGRARIAN REFORM LAW AND SOCIAL LEGISLATION


21 October 2016
RULES
Please read the following rules carefully and ensure strict compliance
therewith. Non-compliance will result in either demerits in the final score or
an outright zero mark for the question involved, or the appropriate penalty
provided. Dura lex sed lex.
1. Limit your answers per sub-question to only one (1) page of your
Bluebook.
2. Ensure your handwriting is legible. Write in block if necessary. I have
great tolerance for atrocious handwriting so if I cannot understand
what you have written with all the more reason that your future Bar
Examiner will not understand your answers in the Bar Exam.
3. Answer the questions in the order they are provided in the
questionnaire.
4. Strictly no erasures. If you make a mistake and need to revise your
answer, simply strike them out by drawing a single line across the
word/s you wish to erase.
5. ABSOLUTELY NO CHEATING. The Proctor is authorized to confiscate
Bluebooks if he has probable cause to believe that cheating or any
form of dishonesty has been, is being or is about to be committed.
Those guilty will automatically receive a failing grade for this course.
QUESTIONS
I.
With the enactment of Republic Act No. 9700 (RA 9700) on 07 August
2009, Congress granted a five (5) year extension of the implementation of
the Governments Comprehensive Agrarian Reform Program (CARP). In so
doing, it envisioned the final acquisition and distribution of all remaining
unacquired and undistributed agricultural lands from the effectivity of this
Act until June 30, 2014. Acting pursuant to its renewed mandate, the
Department of Agrarian Reform (DAR) vigorously commenced land
acquisition and distribution proceedings throughout the Philippines issuing
dozens of Notices of Coverage that placed thousands of hectares of land
under CARP coverage through the Compulsory Acquisition. In 2014, and
before the 30 June 2014 deadline, the DAR reported to the Congressional
Oversight Committee on Agrarian Reform that around 283,473 hectares of
agricultural land have yet to be issued with Notices of Coverage. According
to the DAR, the non-issuance of a notice of coverage over these lands before
the lapse of the 30 June 2014 deadline would effectively prevent the CARP
coverage of these properties thereby gravely prejudicing the thousands of
tenants, farmers and farmworkers. Thus, the DAR, supported by numerous
farmer collectives and civil society organizations, implored Congress to enact
another law extending yet again the implementation of the CARP to allow the
CARP coverage of these properties to commence and proceed to completion.

A. Define agrarian reform under Philippine law.


Enumerate the modes of implementation of agrarian
reform allowed under Philippine law. (5pts)
Assume that Congress and President Rodrigo Roa Duterte heeded the
collective call of the DAR, farmer groups and civil society organizations by
enacting a law which provided for a two (2) year extension of the DARs
power to commence and complete land acquisition and distribution
proceedings under the CARP. An organization called the National Union of
Philippine Landowners (NUPL), representing the remaining landowners of
the uncovered 283,473 hectares of agricultural land, filed a petition before
the Supreme Court questioning the constitutionality of the CARP extension
law arguing that the two (2) year extension violated their constitutional right
to due process. According to NUPL, their landowners had acquired a vested
right of ownership over their lands which the State may no longer violate by
extending the CARP.
B. Assume you are one of the Justices of the Supreme Court,
would you grant or deny NUPLs Petition? Why? (10pts)
II.
Following President Dutertes successful state visit to China, the Philippine
Government announced that there is booming demand for cash crop exports
to China such as sugar, coffee, pineapples and bananas. One of your clients,
a pineapple farmer based in Tagaytay informed you that he and his fellow
agrarian reform beneficiaries (ARBs) have been approached by
representatives from the Philippine Department of Agriculture (DA) and the
Cereal, Oil, and Foodstuffs Importing and Exporting Corporation ( COFCO, a
Chinese Government-Owned-And-Controlled Corporation) to broker a supply
agreement of export quality pineapples to China. Your client informs you that
the DA Representative is vigorously encouraging him and his fellow to join
this business opportunity by having them all sign a document entitled
Agricultural Memorandum of Agreement (the Agreement) with COFCO
which provided among others, the following:
1. Establishment of a joint venture corporation entitled Sino-Tagaytay
Agricultural Corporation (the JVC) which shall exer
2. The JVC shall have an authorized capital stock of P1Billion consisting
of 1 Million shares of stock with a par value of P1,000.00 per share.
All shares of stock are to subscribed and held by stockholders as
follows :
a. Chinese stockholders and nominees holding: 750,000 shares
of stock on the basis of the following assets to be contributed
to the JVC:
i. Contribution of various equipment and improvements to
land P300Million;
ii. Trade
Secrets,
Business-Know-How,
Intellectual Property P300Million; and

and

Other

iii. Operating Capital P150Million.

b. ARBs holding the remaining 250,000 shares of stock on the


basis of the following asset contribution to the JVC:
i. Existing improvements on the agricultural properties
P100Million; and
ii. Monetized value of lease rights to the property
P150Million.
3. The Board of Directors of the JVC shall have a total of 15 members
whose membership is distributed, as follows:
a. Eight (8) members nominated by COFCO;
b. Five (5) members nominated by the ARBs; and
c. Two (2) members from the DA to be nominated upon
agreement between the ARBs and COFCO.
4. An undertaking that the JVC shall declare dividends distributing all
quarterly profits according to the ratio of shareholdings held by the
parties to the JVC; and
5. The term of the Agreement shall be twenty-five (25) years which
shall be renewed automatically in its entirety in the absence of any
agreement between COFCO and the ARBs superseding the same.
A. Define an Agri-Business Venture Agreement (AVA). Is
the Agreement as described above an AVA? Explain
briefly (5pts)
B. As counsel for the ARBs, would you advise your clients to
sign the Agreement? Why or why not? (10pts)
Assuming that COFCO and the ARBs proceeded to sign the Agreement
anyway as drafted. However, when submitted for approval by the DAR,
Secretary of Agrarian Reform Rafael Mariano refused to approve the
Agreement foregoing provisions as manifestly anti-farmer and a
throwback to oppressive feudalism and therefore, contrary to agrarian
reform laws.
C. Assuming that COFCO is keen on executing an agreement
with your clients and is willing to make all concessions to
make
the
deal
push
through,
what
amendments/proposals would you make on behalf of your
clients to convince Secretary Mariano to approve the
Agreement? (10pts)
III.
Your clients, the four (4) remaining heirs of the late Atty. Manuel Afable, are
co-owners of a 158.77-hectare property located in Carcar, Cebu (Afable
Property). Sometime in 2013, the DAR issued a Notice of Coverage at the
instance of several occupants of the Afable Property and began CARP
acquisition and distribution proceedings thereon. Upon your investigation,
you discovered that the Municipal Council of Carcar previously enacted an
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ordinance on 26 August 1982 (1982 Ordinance) reclassifying certain areas


of the Municipality into agricultural, industrial, commercial and residential
areas. Your investigation resulted in evidence establishing that the property
of your clients was found to be covered within the light industrial zone as
defined by the 1982 Ordinance.
A. Is the DAR correct in covering the Afable Property under
CARP? Why or why not? (10pts)
In his last will and testament, the late Atty. Manuel Afable directed his heirs
that the Afable Property be developed as a low-cost, socialized housing
project in partnership with the Provincial Government of Cebu for the benefit
of Cebus rural and urban poor. In recognition of their late fathers wishes,
the Heirs negotiated with the local government of Carcar who agreed and
passed the necessary ordinance reclassifying the Afable Property into
residential use to allow the Heirs to proceed with the development of the
socialized housing project. However, the Provincial Agrarian Reform Officer of
Cebu (PARO) filed a case before the Regional Trial Court (RTC) of Cebu
requesting for a court order to stop any development of the socialized
housing project. The PARO argued that implementation proposed socialized
housing project violated Section 65 of the Comprehensive Agrarian Reform
Law (CARL) which required a prior DAR conversion permit
B. What are the legal ground/s for conversion of properties
under Section 65 of the CARL? (5pts)
C. If you were the Presiding Judge of the RTC of Cebu, how
will you rule on the PAROs case? (10pts)
IV.
After decades of litigation involving the agricultural nature of the land the
DARs compliance with the procedure of CARP coverage, the DAR was finally
able to distribute Certificates of Land Ownership Award (CLOAs) to qualified
agrarian reform beneficiaries (ARBs) of Hacienda Maria in Agusan del Sur.
These CLOAs were registered with the Registry of Deeds of Agusan del Sur in
2003. In 2016, the new management of Hacienda Maria filed a case with the
DAR Secretary seeking the cancellation of the registered CLOAs on the
ground that the registrants of these CLOAs were not listed as farmworkers in
the roll of employees of Hacienda Maria. DAR Secretary Mariano denied
Hacienda Marias petition on the ground that the CLOAs had long become
indefeasible and can no longer be questioned more than thirteen (13) years
from registration thereof. On appeal, the Court of Appeals reversed pointing
out that while the DAR duly identified the ARBs of Hacienda Maria as
qualified under CARL, the fact remained that their names did not appear in
Hacienda Marias list of employees and therefore cannot be considered as
qualified beneficiaries under CARP. The case was appealed by the ARBs to
the Supreme Court.
A. Assume you are one of the Justices of the Supreme Court,
how would you resolve the appeal? (10pts)
V.
Arriba Foods Corporation (AFC) originally owned a huge tract of agricultural
land totaling 1,400 hectares of land located in Mati, Davao Oriental devoted
to production of export quality Cavendish Bananas. Following the enactment
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of CARL, AFC offered these lands to the DAR hoping to avail of the Voluntary
Offer to Sell (VOS) Incentive under the CARL. Instead of processing AFCs
VOS offer, the DAR proceeded to cover AFCs property through Compulsory
Acquisition. In a swift processing of CARP requirements, the DAR was able to
distribute AFCs property to ARBs by 1996. The DAR and Land Bank of the
Philippines (Land Bank) jointly determined the total value of AFCs property
in the amount of P165,000.00 per hectare or P231 Million, computed using
the following formula:
LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)
LV = Land Value
CNI = Capitalized Net Income
CS = Comparable Sales
MV = Market Value per Tax Declaration
Accordingly, Land Bank paid AFC the amount of P231 Million in 1996.
Believing its property to be worth more than P231 Million, AFC filed in 1996 a
case for determination of just compensation with the Department of Agrarian
Reform Adjudication Board (DARAB). However, no action was taken by the
DARAB. Thus, AFC filed in 2001 a complaint for just compensation with the
Special Agrarian Court (SAC). The SAC appointed a panel of commissioners
to determine the true value of AFCs property. After receiving evidence of
market values of lands from the City Assessor of Mati, Davao Oriental,
comparative sales values of nearby lands and the value of improvements on
the property, the SAC found that AFCs property was worth P1.4 Billion and
rendered judgment accordingly.
Aggrieved, DAR and Land Bank appealed to the Court of Appeals insisting on
their valuation of the property as computed using Land Banks formula. The
Court of Appeals, however, affirmed the SAC prompting DAR and Land Bank
to appeal to the Supreme Court.
A. Assume you are one of the Justices of the Supreme Court,
would you agree with Land Banks insistence that the
value of the property should be P231 Million only? Why or
why not? (10pts)
B. Under the facts of this case, is an award of interest on
the amount of just compensation justified? (5pts)
VI.
Enumeration:
1. How many hectares is the maximum retention area granted to
landowners under Section 6 of CARL? (2pts)
2. Enumerate four (4) grounds for exemption/exclusion from
CARP. (2 pts each)

Bonus:
1. Explain the Voluntary Offer to Sell Incentive under the CARL
(5pts)
2. Enumerate as many as you can all laws (Republic Acts,

Presidential Decrees, Proclamations, Executive Orders, etc.)


pertaining to agrarian reform [Title of the Law or its Numerical
Designation will be accepted] (2pts each)