Sta Rosa Development Corp VS Ca

9/8/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 367 9/8/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 367
HERRERA, REYNARIO U. LAZO, AGAPITO MATIENZO,

DIONISIO F. PETATE, LITO G. REYES, JOSE M.
SUBOL, CELESTINO G. TOPINO, ROSA C. AMANTE,
SOTERA CASALME, REMIGIO M. SILVERIO, THE
_______________
VOL. 367, OCTOBER 12, 2001 175
* FIRST DIVISION.
Sta. Rosa Realty Development Corporation vs. Court of
Appeals 176
*
G.R. No. 112526. October 12, 2001.
176 SUPREME COURT REPORTS ANNOTATED
STA. ROSA REALTY DEVELOPMENT CORPORATION, Sta. Rosa Realty Development Corporation vs. Court of
Appeals
petitioner, vs. COURT OF APPEALS, JUAN B. AMANTE,
FRANCISCO L. ANDAL, LUCIA ANDAL, ANDREA P.
AYENDE, LETICIA P. BALAT, FILOMENA B. BATINO,
ANICETO A. BURGOS, JAIME A. BURGOS, FLORENCIA SECRETARY OF AGRARIAN REFORM, DEPARTMENT
CANUBAS, LORETO A. CANUBAS, MAXIMO A. OF AGRARIAN REFORM ADJUDICATION BOARD,
CANUBAS, REYNALDO CARINGAL, QUIRINO C. LAND BANK OF THE PHILIPPINES, REGISTER OF
CASALME, BENIGNO A. CRUZAT, ELINO A. CRUZAT, DEEDS OF LAGUNA, DEPARTMENT OF
GREGORIO F. CRUZAT, RUFINO C. CRUZAT, SERGIO ENVIRONMENT AND NATURAL RESOURCES
CRUZAT, SEVERINO F. CRUZAT, VICTORIA DE REGIONAL EXECUTIVE DIRECTOR FOR REGION IV,
SAGUN, SEVERINO DE SAGUN, FELICISIMO A. and REGIONAL AGRARIAN REFORM OFFICER FOR
GONZALES, FRANCISCO A. GONZALES, GREGORIO REGION IV, respondents.
GONZALES, LEODEGARIO N. GONZALES, PASCUAL P.
GONZALES, ROLANDO A. GONZALES, FRANCISCO A. Agrarian Reform; Notices Required for Valid Implementation
JUANGCO, GERVACIO A. JUANGCO, LOURDES U. of the Comprehensive Agrarian Reform Program (CARP).—For a
LUNA, ANSELMO M. MANDANAS, CRISANTO valid implementation of the CARP Program, two notices are
MANDANAS EMILIO M. MANDANAS, GREGORIO A. required: (1) the notice of coverage and letter of invitation to a
MANDANAS, MARIO G. MANDANAS, TEODORO preliminary conference sent to the landowner, the representative
MANDANAS, CONSTANCIO B. MARQUEZ, EUGENIO B. of the BARC, LBP, farmer beneficiaries and other interested
MARQUEZ, ARMANDO P. MATIENZO, DANIEL D. parties pursuant to DAR A.O. No. 12, series of 1989; and (2) the
MATIENZO, MAXIMINO MATIENZO, PACENCIA P. notice of acquisition sent to the landowner under Section 16 of the
MATIENZO, DOROTEA L. PANGANIBAN, JUANITO T. CARL.
PEREZ, MARIANITO T. PEREZ, SEVERO M. PEREZ,
Same; Police Power; Eminent Domain; The implementation of
INOCENCIA S. PASQUIZA, BIENVENIDO F. PETATE,
the Comprehensive Agrarian Reform Law (CARL) is an exercise of
IGNACIO F. PETATE, JUANITO PETATE, PABLO A.
the State’s police power and the power of eminent domain.—The
PLATON, PRECILLO V. PLATON, AQUILINO B. SUBOL,
importance of the first notice, that is, the notice of coverage and
CASIANO T. VILLA, DOMINGO VILLA, JUAN T. VILLA,
the letter of invitation to a conference, and its actual conduct
MARIO C. VILLA, NATIVIDAD A. VILLA, JACINTA S.
cannot be understated. They are steps designed to comply with
ALVARADO, RODOLFO ANGELES, DOMINGO A.
the requirements of administrative due process. The
CANUBAS, EDGARDO L. CASALME, QUIRINO DE
implementation of the CARL is an exercise of the State’s police
LEON, LEONILO M. ENRIQUEZ, CLAUDIA P.
power and the power of eminent domain. To the extent that the
GONZALES, FELISA R. LANGUE, QUINTILLANO
CARL prescribes retention limits to the landowners, there is an
LANGUE, REYNALDO LANGUE, ROMEO S. LANGUE,
exercise of police power for the regulation of private property in
BONIFACIO VILLA, ROGELIO AYENDE, ANTONIO B.
accordance with the Constitution. But where, to carry out such
FERNANDEZ, ZACARLAS HERRERA, ZACARIAS
regulation, the owners are deprived of lands they own in excess of
www.central.com.ph/sfsreader/session/000001746b8add5a52e0e98b003600fb002c009e/t/?o=False 1/25 www.central.com.ph/sfsreader/session/000001746b8add5a52e0e98b003600fb002c009e/t/?o=False 2/25
the maximum area allowed, there is also a taking under the certified by the Housing and Land Use Regulatory Board. On
power of eminent domain. The taking contemplated is not mere January 5, 1994, the Sangguniang Bayan of Cabuyao, Laguna
limitation on the use of the land. What is required is the issued a Resolution voiding the Zoning classification of the lands
surrender of the title to and physical possession of the excess and at Barangay Casile as Park and declaring that the land was now
all beneficial rights accruing to the owner in favor of the farmer classified as agricultural land. The authority of the municipality
beneficiary. of Cabuyao, Laguna to issue zoning classification is an exercise of
Same; Same; Same; The law requires payment of just its police power, not the power of eminent domain. “A zoning
compensation in cash or Land Bank of the Philippines (LBP) ordinance is defined as a local city or municipal legislation which
bonds, not by trust account.—In the case at bar, DAR has logically arranges, prescribes, defines and apportions a given
executed the taking of the property in question. However, political subdivision into specific land uses as present and future
payment of just compensation was not in accordance with the projection of needs.”
procedural requirement. The law required payment in cash or Same; Same; Same; Lands classified as non-agricultural prior
LBP bonds, not by trust account as was done by DAR In to the effectivity of the CARL, may not be compulsorily acquired for
Association of Small Landowners in the Philippines v. Secretary of distribution to farmer beneficiaries.—In Natalia Realty, Inc. v.
Agrarian Reform, we held that “The CARP Law, for its part, Department of Agrarian Reform, we held that lands classified as
conditions the transfer of posses- non-agricultural prior to the effectively of the CARL, may not be
compulsorily acquired for distribution to farmer beneficiaries.
177 However, more than the classification of the subject land as
PARK is the fact that subsequent studies and survey showed that
the parcels of land in question form a vital part of a watershed
area.
VOL. 367, OCTOBER 12, 2001 177
178
Sta. Rosa Realty Development Corporation vs. Court of Appeals
sion and ownership of the land to the government on receipt of the 178 SUPREME COURT REPORTS ANNOTATED
landowner of the corresponding payment or the deposit by the
DAR of the compensation in cash or LBP bonds with an accessible
bank. Until then, title also remains with the landowner. No
outright change of ownership is contemplated either.” Same; Same; Same; The most important product of a
watershed is water which is one of the most important human
Same; Natural Resources; Watersheds; Words and Phrases;
necessity; Protection of watersheds is an “intergenerational
Watersheds generally are outside the commerce of man;
responsibility” that needs to be answered now.—The definition
Watersheds may be defined as “an area drained by a river and its
does not exactly depict the complexities of a watershed. The most
tributaries and enclosed by a boundary or divide which separates
important product of a watershed is water which is one of the
it from adjacent watersheds.”—Watersheds may be defined as “an
most important human necessity. The protection of watersheds
area drained by a river and its tributaries and enclosed by a
ensures an adequate supply of water for future generations and
boundary or divide which separates it from adjacent watersheds.”
the control of flashfloods that not only damage property but cause
Watersheds generally are outside the commerce of man, so why
loss of lives. Protection of watersheds is an “intergenerational
was the Casile property titled in the name of SRRDC? The answer
responsibility” that needs to be answered now.
is simple. At the time of the titling, the Department of Agriculture
and Natural Resources had not the declared the property as
PETITION for review on certiorari of a decision of the
watershed area.
Court of Appeals.
Same; Same; Same; Municipal Corporations; Zoning
Ordinances; Police Power; Eminent Domain; The authority of a The facts are stated in the opinion of the Court.
municipality to issue zoning classification is an exercise of its Romulo, Mabanta, Buenaventura, Sayoc & Delos
police power, not the power of eminent domain.—The parcels of Angeles Law Offices for petitioner.
land in Barangay Casile were declared as “PARK” by a Zoning Miguel M. Gonzales, Norberto L. Martinez and
Ordinance adopted by the municipality of Cabuyao in 1979, as Rosemarie M. Oseteo and Free Legal Assistance Group for
private respondents. On August 11, 1989, the Municipal Agrarian Reform

Officer (MARO) of Cabuyao, Laguna issued a notice of
PARDO, J.: coverage to petitioner and invited its officials or6
representatives to a conference on August 18, 1989.
The case before the Court is a petition for 1review on
During the meeting, the following were present:
certiorari of the decision of the Court of Appeals affirming
representatives of petitioner, the Land Bank of the
the decision of the Department of Agrarian Reform
2 Philippines, PARCCOM, PARO of Laguna, MARO of
Adjudication Board (hereafter, DARAB) ordering the
Laguna, the BARC Chairman of Barangay Casile and some
compulsory acquisition of petitioner’s property under the
potential farmer beneficiaries, who are residents of
Comprehensive Agrarian Reform Program (CARP).
Barangay Casile, Cabuyao, Laguna. It was the consensus
Petitioner Sta. Rosa Realty Development Corporation
and recommendation of the assembly that the landholding
(hereafter, SRRDC) was the registered owner of two parcels
of SRRDC be placed under compulsory acquisition.
of land, situated at Barangay Casile, Cabuyao, Laguna
On August 17, 1989, petitioner filed with the Municipal
covered by TCT Nos. 81949 and 84891, with a total area of
Agrarian Reform Office (MARO), Cabuyao, Laguna a
254.6 hectares. According to petitioner, the parcels of land
“Protest and Objection” to the compulsory acquisition of the
are watersheds, which provide clean
property on the ground that the area was not appropriate
for agricultural purposes. The area was rugged in terrain
_____________ with slopes of 18% and above and that
1 In CA-G.R. SP No. 27234, promulgated on November 05, 1993,
Martin, Jr., J., ponente, Chua and Guerrero, JJ., concurring, Rollo, Vol. I, ______________
pp. 228-258. 3 Petition, Rollo, Vol. 1, p. 10.
2 DARAB (Case No. JC-IV-LAG-0001) entitled Juan Amante, et al. vs. 4 Petition, Regional Trial Court, Laguna, docketed as Civil Case No. B-
Sta. Rosa Realty Development Corporation, promulgated on December 19,
2333, Rollo, Vol. I, p. 11.
1991, Rollo, Vol. I, pp. 133-136. 5 Civil Cases Nos. 250, 258, 260, 262 and 266, p. 11.
6 Petition, Annex “A”, Rollo, Vol. I, p. 55.
179
180
VOL. 367, OCTOBER 12, 2001 179
Sta. Rosa Realty Development Corporation vs. Court of 180 SUPREME COURT REPORTS ANNOTATED
Appeals
Appeals
potable water to the Canlubang community, and 3that
ninety (90) light industries are now located in the area. the occupants of the land were squatters, who were not
Petitioner alleged that respondents usurped its rights entitled to any land as beneficiaries.
7
over the property, thereby destroying the ecosystem.4 On August 29, 1989, the farmer beneficiaries together
Sometime in December 1985, respondents filed a civil case with the BARC chairman answered the protest and
with the Regional Trial Court, Laguna, seeking an objection stating that the slope of the land is not 18% but
easement of a right of way to and from Barangay Casile. By only 5-10% and that the land is suitable and economically
way of counterclaim, however, petitioner sought the viable for agricultural purposes, as evidenced by the
ejectment of private respondents. Certification of the Department of Agriculture,
In October 1986 to August 1987, petitioner filed with the municipality of Cabuyao, Laguna.
8
Municipal Trial Court, Cabuyao, Laguna 5 separate On September 8, 1989, MARO Belen dela Torre made a
complaints for forcible entry against respondents. summary investigation report and forwarded the
After the filling of the ejectment cases, respondents Compulsory Acquisition Folder Indorsement (CAFI) to the
petitioned the Department of Agrarian Reform (DAR) for Provincial Agrarian Reform Officer (hereafter, PARO).
9
the compulsory acquisition of the SRRDC property under On September 21, 1989, PARO Durante Ubeda
the CARP. forwarded his endorsement of the compulsory acquisition to
the Secretary of Agrarian Reform. On March 28, 1990, Executive Director Emmanuel S.
On November 23, 1989, Acting Director Eduardo C. Galvez wrote Land Bank President Deogracias Vistan to
Visperas of the Bureau of Land Acquisition and forward the two (2) claim folders involving the property of
Development, DAR forwarded two (2) Compulsory SRRDC to the DARAB for it to conduct summary
Acquisition Claim Folders covering the landholding of proceedings to determine the just compensation for the
SRRDC, covered by TCT Nos. T-81949 and T-84891 to the land.
President, Land10 Bank of the Philippines for further review On April 6, 1990, petitioner sent a letter to the Land
and evaluation. Bank of the Philippines stating that its property under the
On December 12, 1989, Secretary of Agrarian Reform aforesaid land titles were exempt from CARP coverage
Miriam Defensor
11
Santiago sent two (2) notices of because they had been classified as watershed area and
acquisition to petitioner, stating that petitioner’s were the subject of a pending petition for land conversion.
landholdings covered by TCT Nos. 81949 and 84891, On May 10, 1990, Director Narciso Villapando of BLAD
containing an area of 188.2858 and 58.5800 hectares, turned over the two (2) claim folders (CACF’s) to the
valued at P4,417,735.65 and P1,220,229.93, respectively, Executive Director of the DAR Adjudication Board for
had been placed under the Comprehensive Agrarian proper administrative valuation. Acting on the CACF’s, on
Reform Program. 12
September 10, 1990, the Board promulgated a resolution
On February 6, 1990, petitioner SRRDC in two letters asking the office of the Secretary of Agrarian Reform (DAR)
separately addressed to Secretary Florencio B. Abad and to first resolve two (2) issues before13it proceeds with the
the Director, summary land valuation proceedings.
The issues that need to be threshed out were as follows:
______________ (1) whether the subject parcels of land fall within the
coverage of the Compulsory Acquisition Program of the
7 Petition, Annex “B”, Rollo, Vol I, pp. 56-57. CARP; and (2) whether the petition for land conversion of
8 Original Record, Folder I, Letter of Felicito B. Buban, Department of the parcels of land may be granted.
Agriculture, dated August 29, 1989. On December 7, 1990, the Office of the Secretary, DAR,
9 Ibid., Summary Investigation Report. through the Undersecretary for Operations (Assistant
10 Original Record, Folder II. Secretary for Luzon Operations) and the Regional Director
11 Folder I, Notice of Acquisition. of Region IV, submitted a
12 Ibid., Letters.
____________
181
13 Folder, JC-R-IV-LAG-0001-GO, Decision DARAB, pp. 23-25.
VOL. 367, OCTOBER 12, 2001 181 182

Appeals
182 SUPREME COURT REPORTS ANNOTATED
Bureau of Land Acquisition and Distribution, sent its Sta. Rosa Realty Development Corporation vs. Court of
Appeals
formal protest, protesting not only the amount of
compensation offered by DAR for the property but also the
two (2) notices of acquisition. report answering the two issues raised. According to them,
On March 17, 1990, Secretary Abad referred the case to firstly, by virtue of the issuance of the notice of coverage on
the DARAB for summary proceedings to determine just August 11, 1989, and notice of acquisition on December 12,
compensation under R.A. No. 6657, Section 16. 1989, the property is covered under compulsory acquisition.
On March 23, 1990, the LBP returned the two (2) claim Secondly, Administrative Order No. 1, Series of 1990,
folders previously referred for review and evaluation to the Section IV D also supports the DAR position on the
Director of BLAD mentioning its inability to value the coverage of the said property. During the consideration of
SRRDC landholding due to some deficiencies. the case by the Board, there was no pending petition for

land conversion specifically concerning the parcels of land finding that private respondents illegally entered the
in question. SRRDC property, and ordered them evicted.
On February 19, 1991, the Board sent a notice of On July 11, 1991, DAR Secretary Benjamin T. Leong
hearing to all the parties interested, setting the hearing for issued a memorandum directing the Land Bank of the
the administrative valuation of the subject parcels of land Philippines to open a trust account in favor of SRRDC, for
on March 6, 1991. However, on February 22, 1991, Atty. P5,637,965.55, as valuation for the SRRDC property.
Ma. Elena P. Hernandez-Cueva, counsel for SRRDC, wrote On December 19, 1991, DARAB promulgated a decision,
the Board requesting for its assistance in the the decretal portion of which reads:
reconstruction of the records of the case because the
records could not be found as her co-counsel, Atty. Ricardo “WHEREFORE, based on the foregoing premises, the Board
Blancaflor, who originally handled the case for SRRDC and hereby orders:
had possession of all the records of the case was on
“1. The dismissal for lack of merit of the protest against the
indefinite leave and could not be contacted. The Board
compulsory coverage of the landholdings of Sta. Rosa
granted counsel’s request and moved the hearing to April 4,
Realty Development Corporation (Transfer Certificates of
1991.
Title Nos. 81949 and 84891 with an area of 254.766
On March 18, 1991, SRRDC, submitted a petition to the
hectares) in Barangay Casile, Municipality of Cabuyao,
Board for the latter to resolve SRRDC’s petition for
Province of Laguna under the Comprehensive Agrarian
exemption from CARP coverage before any administrative
Reform Program is hereby affirmed;
valuation of their landholding could be had by the Board.
“2. The Land Bank of the Philippines (LBP) to pay Sta. Rosa
On April 4, 1991, the initial DARAB hearing of the case
Realty Development Corporation the amount of Seven
was held and subsequently, different dates of hearing were
Million Eight Hundred Forty-One Thousand, Nine
set without objection from counsel of SRRDC. During the
Hundred Ninety Seven Pesos and Sixty-Four centavos
April 15, 1991 hearing, the subdivision plan of subject
(P7,841,997.64) for its landholdings covered by the two (2)
property at Casile, Cabuyao, Laguna was submitted and
Transfer Certificates of Title mentioned above. Should
marked as Exhibit “5” for SRRDC. At the hearing on April
there be a rejection of the payment tendered, to open, if
23, 1991, the Land Bank asked for a period of one month to
none has yet been made, a trust account for said amount
value the land in dispute.
in the name of Sta. Rosa Realty Development Corporation;
At the hearing on April 23, 1991, certification from
Deputy Zoning Administrator Generoso B. Opina was
presented. The certification issued on September 8, 1989, _______________
stated that the parcels of
14 Original Records, Folder of Exhibits III, Certification from the Office
183 of the Deputy Zoning Administrator.
15 Vol. I, DARAB Folder, Manifestation and Motion.
16 Petition, Annex “B”, Judgment, Judge Rodrigo V. Cosico, presiding,
VOL. 367, OCTOBER 12, 2001 183
CA Rollo, pp. 98-111. In Civil Case Nos. 250, 258, 260, 262, and 226.
Appeals 184
land subject of the case were classified as “industrial Park” 184 SUPREME COURT REPORTS ANNOTATED
per Sanguniang Bayan Resolution No. 45-89 dated March
14
29, 1989.
Appeals
To avert any opportunity that the DARAB might
distribute the lands to the farmer beneficiaries,
15
on April
30, 1991, petitioner filed a petition with DARAB to “3. The Register of Deeds of the Province of Laguna to cancel
disqualify private respondents as beneficiaries. However, with dispatch Transfer Certificate of Title Nos. 84891 and
DARAB refused to address the issue of beneficiaries. 81949 and new one be issued in the name of the Republic
In the meantime, on January 20, 1992, the (Regional of the Philippines, free from liens and encumbrances;
16
Trial Court, Laguna, Branch 24, rendered a decision,
“4. The Department of Environment and Natural Resources On December 15, 1993, the Court issued a Resolution
either through its Provincial Office in Laguna or the which reads:
Regional Office, Region IV, to conduct a final segregation
survey on the lands covered by Transfer Certificate of “G.R. Nos. 112526 (Sta. Rosa Realty Development Corporation vs.
Title Nos. 84891 and 81949 so the same can be transferred Court of Appeals, et. al.)—Considering the compliance, dated
by the Register of Deeds to the name of the Republic of the December 13, 1993, filed by counsel for petitioner, with the
Philippines; resolution of December 8, 1993 which required petitioner to post a
cash bond or surety bond in the amount of P1,500,000.00 Pesos
“5. The Regional Office of the Department of Agrarian Reform
before issuing a temporary restraining order prayed for,
through its Municipal and Provincial Agrarian Reform
manifesting that it has posted a CASH BOND in the same
Office to take immediate possession on the said
amount with the Cashier of the Court as evidenced by the
landholding after Title shall have been transferred to the
attached official receipt No. 315519, the Court resolved to ISSUE
name of the Republic of the Philippines, and distribute the
the Temporary Retraining Order prayed for.
same to the immediate issuance of Emancipation Patents
“The Court therefore, resolved to restrain: (a) the Department
to the farmer-beneficiaries as determined by the 17 of Agrarian Reform Adjudication Board from enforcing its decision
Municipal Agrarian Reform Office of Cabuyao, Laguna.”
dated December 19, 1991 in DARAB Case No. JC-R-IV-LAG-0001,
which was affirmed by the Court of Appeals in a Decision dated
On January 20, 1992, the Regional Trial Court, Laguna, 18
November 5, 1993, and which ordered, among others, the
Branch 24, rendered a decision in Civil Case No. B-2333
Regional Office of the Department of Agrarian Reform through its
ruling that respondents were builders in bad faith.
Municipal and Provincial Reform Office to take immediate
On February 6, 1992, petitioner filed with the Court of
19
possession of the landholding in dispute after title shall have been
Appeals a petition for review of the DARAB decision. On
transferred to the name of the Republic of the Philippines and to
November 5, 1993, the Court of Appeals promulgated a
distribute the same through the immediate issuance of
decision affirming the decision of DARAB. The decretal
Emancipation Patents to the farmer-beneficiaries as determined
portion of the Court of Appeals decision reads:
by the Municipal Agrarian Officer of Cabuyao, Laguna, (b) The
“WHEREFORE, premises considered, the DARAB decision dated Department of Agrarian Reform and/or the Department of
September 19, 1991 is AFFIRMED, without prejudice to Agrarian Reform Adjudication Board, and all persons acting for
petitioner Sta. Rosa Realty Development Corporation ventilating and in their behalf and under their authority from entering the
its case with the Special Agrarian Court on the issue of just properties involved in this case and from introducing permanent
20
compensation.” infrastructures thereon; and (c) the private respondents from
further clearing the said properties of their green cover by the
cutting or burning of trees and other vegetation, effective today
_____________ 22
until further orders from this Court.”
17 Folder JC-R-IV-LAG-0001-C.O., Decision, penned by Benjamin T.
Leong, Chairman, concurred in by Renato B. Padilla, Lorenzo R. Reyes, The main issue raised is whether the property in question
Leopoldo M. Serrano, Jr. and Josefina M. Sidiangco, members. is covered by CARP despite the fact that the entire
18 Petition, Annex “F”, Vol I, SC Rollo, pp. 70-83. property was formed part of a watershed area prior to the
19 Docketed as CA-G.R. SP No. 27234. enactment of R.A. No. 6657.
20 CA Rollo, Decision, Martin, Jr., J., ponente, Chua and Guerrero, JJ.,
concurring, pp. 499-529. ______________
185 21 Petition filed on November 24, 1993. G.R. No. 112526, Rollo, Vol. I,
pp. 2-52. On September 28, 1994, the Court gave due course to the petition
G.R. No. 112526, Rollo, Vol. II, pp. 780-781.
VOL. 367, OCTOBER 12, 2001 185 22 Resolution, Rollo, pp. 296-300.
Appeals 186
21
Hence, this petition. 186 SUPREME COURT REPORTS ANNOTATED
Sta. Rosa Realty Development Corporation vs. Court of Philippines. The DAR shall thereafter proceed with the
Appeals redistribution of the land to the qualified beneficiaries.
Under Republic Act No. 6657, there are two modes of 187
acquisition of private land: compulsory and voluntary. In

the case at bar, the Department of Agrarian Reform sought VOL. 367, OCTOBER 12, 2001 187
the compulsory acquisition of subject property under R.A.
No. 6657, Section 16, to wit:
Appeals
“Sec. 16. Procedure for Acquisition of Private Lands.—For
purposes of acquisition of private lands, the following procedures f.) Any party who disagrees with the decision may bring the
23
shall be followed: matter to the court of proper jurisdiction for final
determination of just compensation.
a.) After having identified the land, the landowners and the
beneficiaries, the DAR shall send its notice to acquire the In compulsory acquisition of private lands, the landholding,
land to the owners thereof, by personal delivery or the landowners and farmer beneficiaries must first be
registered mail, and post the same in a conspicuous place identified. After identification, the DAR shall send a notice
in the municipal building and barangay hall of the place of acquisition to the landowner, by personal delivery or
where the property is located. Said notice shall contain the registered mail, and post it in a conspicuous place in the
offer of the DAR to pay corresponding value in accordance municipal building and barangay hall of the place where
with the valuation set forth in Sections 17, 18, and other the property is located.
pertinent provisions hereof. Within thirty (30) days from receipt of the notice of
b.) Within thirty (30) days from the date of the receipt of acquisition, the landowner, his administrator or
written notice by personal delivery or registered mail, the representative shall inform the DAR of his acceptance or
landowner, his administrator or representative shall rejection of the offer.
inform the DAR of his acceptance or rejection of the offer. If the landowner accepts, he executes and delivers a
c.) If the landowner accepts the offer of the DAR, the LBP deed of transfer in favor of the government and surrenders
shall pay the landowner the purchase price of the land the certificate of title. Within thirty (30) days from the
within thirty (30) days after he executes and delivers a execution of the deed of transfer, the Land Bank of the
deed of transfer in favor of the government and other Philippines (LBP) pays the owner the purchase price. If the
muniments of title. landowner accepts, he executes and delivers a deed of
d.) In case of rejection or failure to reply, the DAR shall transfer in favor of the government and surrenders the
conduct summary administrative proceedings to certificate of title. Within thirty days from the execution of
determine the compensation for the land requiring the the deed of transfer, the Land Bank of the Philippines
landowner, the LBP and other interested parties to submit (LBP) pays the owner the purchase price. If the landowner
fifteen (15) days from receipt of the notice. After the rejects the DAR’s offer or fails to make a reply, the DAR
expiration of the above period, the matter is deemed conducts summary administrative proceedings to
submitted for decision. The DAR shall decide the case determine just compensation for the land. The landowner,
within thirty (30) days after it is submitted for decision. the LBP representative and other interested parties may
e.) Upon receipt by the landowner of the corresponding
submit evidence on just compensation within fifteen days
payment, or, in case of rejection or no response from the
from notice. Within thirty days from submission, the DAR
shall decide the case and inform the owner of its decision
landowner, upon the deposit with an accessible bank
and the amount of just compensation.
designated by the DAR of the compensation in cash or in
LBP bonds in accordance with this act, the DAR shall
Upon receipt by the owner of the corresponding
make immediate possession of the land and shall request
payment, or, in case of rejection or lack of response from
the proper Register of Deeds to issue Transfer Certificate
the latter, the DAR shall deposit the compensation in cash
of Titles (TCT) in the name of the Republic of the
or in LBP bonds with an accessible bank. The DAR shall
immediately take possession of the land and cause the
issuance of a transfer certificate of title in the name of the
Republic of the Philippines. The land shall then be a) CARP CA Form 1—MARO investigation report
redistributed to the farmer beneficiaries. Any party may b) CARP CA Form No. 2—Summary investigation
question the deci- report findings and evaluation
c) CARP CA Form 3—Applicant’s Information sheet
______________
d) CARP CA Form 4—Beneficiaries undertaking
23 R.A. No. 6657, Sec. 57. e) CARP CA Form 5—Transmittal report to the PARO
188 189
188 SUPREME COURT REPORTS ANNOTATED VOL. 367, OCTOBER 12, 2001 189
Sta. Rosa Realty Development Corporation vs. Court of Sta. Rosa Realty Development Corporation vs. Court of
Appeals Appeals
sion of the DAR in the special agrarian courts The MARO/BARC shall certify that all information contained in
(provisionally the Supreme Court designated branches of the above-mentioned forms have been examined and verified by
the regional trial court as special agrarian courts) for final him and that the same are true and correct.
determination of just compensation.
The DAR has made compulsory acquisition the priority 3. Send notice of coverage and a letter of invitation to a
mode of land acquisition to hasten the implementation of conference/meeting to the landowner covered by the
the Comprehensive Agrarian Reform Program (CARP). Compulsory Case Acquisition Folder. Invitations to the
Under Sec. 16 of the CARL, the first step in compulsory said conference meeting shall also be sent to the
acquisition is the identification of the land, the landowners prospective farmer-beneficiaries, the BARC
and the farmer beneficiaries. However, the law is silent on representatives, the Land Bank of the Philippines (LBP)
how the identification process shall be made. To fill this representative, and the other interested parties to discuss
gap, on July 26, 1989, the DAR issued Administrative the inputs to the valuation of the property.
Order No. 12, series of 1989, which set the operating
procedure in the identification of such lands. The procedure He shall discuss the MARO/BARC investigation report and
is as follows: solicit the views, objection, agreements or suggestions of the
participants thereon. The landowner shall also ask to indicate his
A. The Municipal Agrarian Reform Officer (MARO), retention area. The minutes of the meeting shall be signed by all
with the assistance of the pertinent Barangay participants in the conference and shall form an integral part of
Agrarian Reform Committee (BARC), shall: the CACF.
1. Update the masterlist of all agricultural lands 4. Submit all completed case folders to the Provincial
covered under the CARP in his area of Agrarian Reform Officer (PARO).
responsibility; the masterlist should include such
information as required under the attached CARP B. The PARO shall:
masterlist form which shall include the name of the
1. Ensure the individual case folders are forwarded to him by
landowner, landholding area, TCT/OCT number,
his MAROs.
and tax declaration number.
2. Immediately upon receipt of a case folder, compute the
2. Prepare the Compulsory Acquisition Case Folder
valuation of the land in accordance with A.O. No. 6, series
(CACF) for each title (OCT/TCT) or landholding
of 1988. The valuation worksheet and the related CACF
covered under Phase I and II of the CARP except
valuation forms shall be duly certified correct by the
those for which the landowners have already filed
PARO and all the personnel who participated in the
applications to avail of other modes of land
accomplishment of these forms.
acquisition. A case folder shall contain the following
duly accomplished forms:
3. In all cases, the PARO may validate the report of the bank, in case of rejection or non-response, the Secretary
MARO through ocular inspection and verification of the shall immediately direct the pertinent Register of Deeds to
property. This ocular inspection and verification shall be issue the corresponding Transfer Certificate of Title (TCT)
mandatory when the computed value exceeds P500,000 in the name of the Republic of the Philippines. Once the
per estate. property is transferred, the DAR, through the PARO, shall
4. Upon determination of the valuation, forward the case take possession of the land for redistribution to qualified
folder, together with the duly accomplished valuation beneficiaries.”
forms and his recommendations, to the Central Office.
191
190
VOL. 367, OCTOBER 12, 2001 191

190 SUPREME COURT REPORTS ANNOTATED Sta. Rosa Realty Development Corporation vs. Court of
Appeals
Administrative Order No. 12, Series of 1989 requires that
The LBP representative and the MARO concerned shall be the Municipal Agrarian Reform Officer (MARO) keep an
furnished a copy each of his report. updated master list of all agricultural lands under the
CARP in his area of responsibility containing all the
C. DAR Central Office, specifically through the Bureau of required information. The MARO prepares a Compulsory
Land Acquisition and Distribution (BLAD), shall: Acquisition Case Folder (CACF) for each title covered by
CARP. The MARO then sends the landowner a “Notice of
1. Within three days from receipt of the case folder from the Coverage” and a “letter of invitation” to a
PARO, review, evaluate and determine the final land “conference/meeting” over the land covered by the CACF.
valuation of the property covered by the case folder. A He also sends invitations to the prospective farmer-
summary review and evaluation report shall be prepared beneficiaries, the representatives of the Barangay Agrarian
and duly certified by the BLAD Director and the personnel Reform Committee (BARC), the Land Bank of the
directly participating in the review and final valuation. Philippines (LBP) and other interested parties to discuss
2. Prepare, for the signature of the Secretary or her duly the inputs to the valuation of the property and solicit
authorized representative, a notice of acquisition (CARP views, suggestions, objections or agreements of the parties.
Form 8) for the subject property. Serve the notice to the At the meeting, the landowner is asked to indicate his
landowner personally or through registered mail within retention area.
three days from its approval. The notice shall include The MARO shall make a report of the case to the
among others, the area subject of compulsory acquisition, Provincial Agrarian Reform Officer (PARO) who shall
and the amount of just compensation offered by DAR. complete the valuation of the land. Ocular inspection and
3. Should the landowner accept the DAR’s offered value, the verification of the property by the PARO shall be
BLAD shall prepare and submit to the Secretary for mandatory when the computed value of the estate exceeds
approval the order of acquisition. However, in case of P500,000.00. Upon determination of the valuation, the
rejection or non-reply, the DAR Adjudication Board PARO shall forward all papers together with his
(DARAB) shall conduct a summary administrative recommendation to the Central Office of the DAR. The
hearing to determine just compensation, in accordance DAR Central Office, specifically, the Bureau of Land
with the procedures provided under Administrative Order Acquisition and Distribution (BLAD) shall prepare, on the
No. 13, series of 1989. Immediately upon receipt of the signature of the Secretary or his duly authorized
DARAB’s decision on just compensation, the BLAD shall representative, a notice of acquisition of the subject
prepare and submit to the Secretary for approval the property. From this point, the provisions of Section 16 of
required order of acquisition. R.A. No. 6657 shall apply.
4. Upon the landowner’s receipt of payment, in case of For a valid implementation of the CARP Program, two
acceptance, or upon deposit of payment in the designated notices are required: (1) the notice of coverage and letter of
invitation to a preliminary conference sent to the
landowner, the representative of the BARC, LBP, farmer Article 67 of the Water Code of the Philippines (P.D. No.
beneficiaries and other interested parties pursuant to DAR 1067) provides:
A.O. No. 12, series of 1989; and (2) the notice of acquisition
sent to the landowner under Section 16 of the CARL. “Art. 67. Any watershed or any area of land adjacent to any
The importance of the first notice, that is, the notice of surface water or overlying any ground water may be declared by
coverage and the letter of invitation to a conference, and its the Department of Natural resources as a protected area. Rules
actual conduct cannot be understated. They are steps and Regulations may be promulgated by such Department to
designed to comply with the requirements of prohibit or control such activities by the owners or occupants
administrative due process. The implementation of the thereof within the protected area which may damage or cause the
CARL is an exercise of the State’s police power and the deterioration of the surface water or ground water or
power of eminent domain. To the extent that the CARL
prescribes reten- ______________
192 24 175 SCRA 343, 391 (1989).

25 In CA-G.R. SP No. 27234.
192 SUPREME COURT REPORTS ANNOTATED 193

Appeals VOL. 367, OCTOBER 12, 2001 193
tion limits to the landowners, there is an exercise of police
power for the regulation of private property in accordance interfere with the investigation, use, control, protection,
with the Constitution. But where, to carry out such management or administration of such waters.”
regulation, the owners are deprived of lands they own in
excess of the maximum area allowed, there is also a taking Watersheds may be defined as “an area drained by a river
under the power of eminent domain. The taking and its tributaries and enclosed by a boundary or divide
contemplated is not mere limitation on the use of the land. which separates it from adjacent watersheds.” Watersheds
What is required is the surrender of the title to and generally are outside the commerce of man, so why was the
physical possession of the excess and all beneficial rights Casile property titled in the name of SRRDC? The answer
accruing to the owner in favor of the farmer beneficiary. is simple. At the time of the titling, the Department of
In the case at bar, DAR has executed the taking of the Agriculture and Natural Resources had not the declared
property in question. However, payment of just the property as watershed area. The parcels of land in
compensation was not in accordance with the procedural Barangay Casile were declared as “PARK” by a Zoning
requirement. The law required payment in cash or LBP Ordinance adopted by the municipality of Cabuyao in 1979,
bonds, not by trust account as was done by DAR. as certified by the Housing and Land Use Regulatory
In Association of Small Landowners in the Philippines v. Board. On January 5, 1994, the Sangguniang
26
Bayan of
Secretary of Agrarian Reform, we held that “The CARP Cabuyao, Laguna issued a Resolution voiding the Zoning
Law, for its part, conditions the transfer of possession and classification of the lands at Barangay Casile as Park and
ownership of the land to the government on receipt of the declaring that the land was now classified as agricultural
landowner of the corresponding payment or the deposit by land.
the DAR of the compensation in cash or LBP bonds with an The authority of the municipality of Cabuyao, Laguna to
accessible bank. Until then, title also remains with the issue zoning classification is an exercise of its police power,
landowner. No outright change of ownership is not the power of eminent domain. “A zoning ordinance is
24
contemplated either.” defined as a local city or municipal legislation which
Consequently, petitioner questioned before the Court of logically arranges, prescribes, defines and apportions a
Appeals DARAB’s decision ordering the compulsory given political subdivision into specific
27
land uses as present
25
acquisition of petitioner’s property. Here, petitioner and future projection of needs.”
pressed the question of whether the property was a In Natalia
28
Realty, Inc. v. Department of Agrarian
watershed, not covered by CARP. Reform, we held that lands classified as non-agricultural
prior to the effectively of the CARL, may not be detrimental effects. On the Casile side this would mean direct
compulsorily acquired for distribution to farmer siltation of the Mangumit river which drains to the water
beneficiaries. impounding reservoir below. On the Kabanga-an side, this would
However, more than the classification of the subject land mean destruction of forest covers which acts as recharged areas of
as PARK is the fact that subsequent studies and survey the Matang Tubig springs. Considering that the people have little
showed that the parcels29of land in question form a vital if no direct interest in the protection of the Matang Tubig
part of a watershed area. structures they couldn’t care less even if it would be destroyed.
The Casile and Kabanga-an watersheds can be considered a
_______________ most vital life support system to thousands of inhabitants directly
and indirectly affected by it. From these watersheds come the
26 Comment of private respondents, Annex “1”, Rollo, Vol. I, pp. 331-332. natural God-given precious resource—water. x x x x x
27 P.D. No. 449, Sec. 4 (b). Clearing and tilling of the lands are totally inconsistent with
28 225 SCRA 278, 283 [1993]. sound watershed management. More so, the introduction of earth
29 Petition, Annex “K” (Annex “B” of), G.R. No. 112526, Rollo, Vol. I, p. disturbing activities like road building and erection of permanent
225; Reply, Annex “G”, G.R. No. 112526, Rollo, Vol. I, pp. 455-521. infrastructures. Unless the pernicious agricultural activities of
the Casile farmers are immediately stopped, it would not be long
194
before these watersheds would cease to be of value. The impact of
watershed degredation threatens the livelihood of thousands of
194 SUPREME COURT REPORTS ANNOTATED people dependent upon it. Toward this, we hope
Sta. Rosa Realty Development Corporation vs. Court of 195

Appeals
VOL. 367, OCTOBER 12, 2001 195

Now, petitioner has offered to prove that the land in
dispute is a “watershed or part of the protected area for Sta. Rosa Realty Development Corporation vs. Court of Appeals
watershed purposes.” Ecological balances and
environmental disasters in our day and age seem to be that an acceptable comprehensive watershed development policy
interconnected. Property developers and tillers of the land and program be immediately formulated and implemented before
must be aware of this deadly combination. In the case at the irreversible damage finally happens.
bar, DAR included the disputed parcels of land for Hence, the following are recommended:
compulsory acquisition simply because the land was
7.2 The Casile farmers should be relocated and given financial
allegedly devoted to agriculture and was titled to SRRDC,
assistance.
hence, private and alienable land that may be subject to
CARP. 7.3 Declaration of the two watersheds as critical and in need
However, the scenario has changed, after an in-depth of immediate rehabilitation.
study, survey and reassessment. We cannot ignore the fact 7.4 A comprehensive and detailed watershed management
that the disputed parcels of land form a vital part of an plan and program be formulated and implemented by the
area that need to be protected for watershed purposes. In a Canlubang Estate 30in coordination with pertinent
report of the Ecosystems Research and Development government agencies.”
Bureau (ERDB), a research arm of the DENR, regarding
the environmental assessment of the Casile and Kabanga- The ERDB report was prepared by a composite team
an river watersheds, they concluded that: headed by Dr. Emilio Rosario, the ERDB Director, who
holds a doctorate degree in water resources from U.P. Los
“The Casile barangay covered by CLOA in question is situated in Baños in 1987; Dr. Medel Limsuan, who obtained his
the heartland of both watersheds. Considering the barangays doctorate degree in watershed management from Colorado
proximity to the Matangtubig waterworks, the activities of the University (US) in 1989; and Dr. Antonio M. Dano, who
farmers which are in conflict with proper soil and water obtained his doctorate degree in Soil and Water
conservation practices jeopardize and endanger the vital Management Conservation from U.P. Los Baños in 1993.
waterworks. Degradation of the land would have double edge

Also, DENR Secretary Angel Alcala submitted a grounds, watersheds and mangroves, national defense, school
Memorandum for the President dated September 7, 1993 sites and campuses including experimental farm stations
(Subject: PFVR HWI Ref.: 933103 Presidential Instructions operated by public or private schools for educational purposes,
on the Protection of Watersheds of the Canlubang Estates seeds and seedlings research and pilot production centers, church
at Barrio Casile, Cabuyao, Laguna) which reads: sites and convents appurtenent thereto, communal burial grounds
and cemeteries, penal colonies and penal farms actually worked
“It is the opinion of this office that the area in question must be by the inmates, government and private research and quarantine
maintained for watershed purposes for ecological and centers, and all lands with eighteen percent (18%) slope and over,
environmental considerations, among others. Although the 88 except those already developed shall be exempt from coverage of
families who are the proposed CARP beneficiaries will be affected, this Act.”
it is important that a larger view of the situation be taken as one
should also consider the adverse effect on thousands of residents Hence, during the hearing at DARAB, there was proof
downstream if the watershed will not be protected and showing that the disputed parcels of land may be excluded
maintained for watershed purposes. from the compulsory acquisition coverage of CARP because
“The foregoing considered, it is recommended that if possible, of its very high slopes.
an alternate area be allocated for the affected farmers, and that To resolve the issue as to the true nature of the parcels
the Canlubang Estates be mandated to protect and maintain
31
the of land involved in the case at bar, the Court directs the
area in question as a permanent watershed reserved.” DARAB to conduct a re-evaluation of the issue.
IN VIEW WHEREOF, the Court SETS ASIDE the
_____________ decision of the Court of Appeals in CA-G.R. SP No. 27234.
In lieu thereof, the Court REMANDS the case to the
30 Reply, Annex “A”, Rollo, Vol. II, pp. 583-584. DARAB for re-evaluation and determination of the nature
31 Rollo, Vol. I, Memorandum, Secretary Alcala to FVR, p. 225. of the parcels of land involved to resolve the issue of its
coverage by the Comprehensive Land Reform Program.
196
In the meantime, the effects of the CLOAs issued by the
DAR to supposed farmer beneficiaries shall continue to be
196 SUPREME COURT REPORTS ANNOTATED stayed by the
Sta. Rosa Realty Development Corporation vs. Court of 197
Appeals
VOL. 367, OCTOBER 12, 2001 197

The definition does not exactly depict the complexities of a
watershed. The most important product of a watershed is Sta. Rosa Realty Development Corporation vs. Court of
water which is one of the most important human Appeals
necessities. The protection of watersheds ensures an
adequate supply of water for future generations and the temporary restraining order issued on December 15, 1993,
control of flashfloods that not only damage property but which shall remain in effect until final decision on the case.
cause loss of lives. Protection of watersheds is an No costs.
“intergenerational responsibility” that needs to be SO ORDERED.
answered now.
Another factor that needs to be mentioned is the fact Davide, Jr. (C.J.) and Ynares-Santiago, JJ., concur.
that during the DARAB hearing, petitioner presented proof Puno, J., No part due to relationship.
that the Casile property has slopes of 18% and over, which Kapunan, J., On official leave.
exempted the land from the coverage of CARL. R.A. No.
6657, Section 10, provides: Judgment set aside, case remanded to DARAB.
“Section 10. Exemptions and Exclusions.—Lands actually, directly Notes.—While the right to a balanced and healthful
and exclusively used and found to be necessary for parks, wildlife, ecology is to be found under the Declaration of Principles
forest reserves, reforestration, fish sanctuaries and breeding and State Policies and not under the Bill of Rights, it does
not follow that it is less important than any of the civil and
9/8/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 367
political rights enumerated in the latter. Such a right

belongs to a different category of rights altogether for it
concerns nothing less than self-preservation and self-
perpetuation—aptly and fittingly stressed by the
petitioners—the advancement of which may even be said to
predate all governments and constitutions. As a matter of
fact, these basic rights need not even be written in the
Constitutions for they are assumed to exist from the
inceptions of humankind. (Oposa vs. Factoran, Jr., 224
SCRA 792 [1993])
The content and the manner of just compensation
provided for in Section 18 of the CARP Law is not violative
of the Constitution. (Santos vs. Land Bank of the
Philippines, 340 SCRA 59 [2000])
——o0o——
198
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9/8/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 367 9/8/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 367

HERRERA, REYNARIO U. LAZO, AGAPITO MATIENZO,

private respondents. On August 11, 1989, the Municipal Agrarian Reform

VOL. 367, OCTOBER 12, 2001 181 182

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acquisition of private land: compulsory and voluntary. In

VOL. 367, OCTOBER 12, 2001 191

192 24 175 SCRA 343, 391 (1989).

192 SUPREME COURT REPORTS ANNOTATED 193

Sta. Rosa Realty Development Corporation vs. Court of

Sta. Rosa Realty Development Corporation vs. Court of 195

VOL. 367, OCTOBER 12, 2001 195

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VOL. 367, OCTOBER 12, 2001 197

political rights enumerated in the latter. Such a right

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