CENTRAL MINDANAO UNIVERSITY REPRESENTED BY ITS PRESIDENT DR. LEONARDO A. CHUA, PETITIONER, VS. THE DEPARTMENT OF AGRARIAN REFORM ADJUDICATION BOARD, THE COURT OF APPEALS AND ALV…

This is a Petition for Review on Certiorari under Rule 65
of the Rules of Court to nullify the proceedings and decision of the Department
of Agrarian Reform Adjudication Board (DARAB for brevity) dated September 4,
1989 and to set aside the decision* of the Court of Appeals dated
August 20, 1990, affirming the decision of the DARAB which ordered the
segregation of 400 hectares of suitable, compact and contiguous portions of the
Central Mindanao University (CMU for brevity) land and their inclusion in the
Comprehensive Agrarian Reform Program (CARP for brevity) for distribution to
qualified beneficiaries, on the ground of lack of jurisdiction.

This case originated in a complaint filed by complainants calling
themselves as the Bukidnon Free Farmers and Agricultural Laborers Organization
(BUFFALO for brevity) under the leadership of Alvin Obrique and Luis Hermoso
against the CMU, before the Department of Agrarian Reform for Declaration of
Status as Tenants, under the CARP.

From the records, the following facts are evident. The petitioner, the CMU, is an agricultural
educational institution owned and run by the state located in the town of
Musuan, Bukidnon province. It started
as a farm school at Marilang, Bukidnon, in early 1910, in response to the
public demand for an agricultural school in Mindanao. It expanded into the Bukidnon National Agricultural High School
and was transferred to its new site in Managok near Malaybalay, the provincial
capital of Bukidnon.

In the early 1960’s, it was converted into a college with campus
at Musuan, until it became what is now known as the CMU, but still primarily an
agricultural university. From its
beginning, the school 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. On January 16, 1958 the President of the
Republic of the Philippines, the late Carlos
P. Garcia, “upon the recommendation of the Secretary of Agriculture
and Natural Resources, and pursuant to the provisions of Section 53, of
Commonwealth Act No. 141, as amended”, 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. A total land area comprising 3,080 hectares
was surveyed and registered and titled in the name of the petitioner under OCT
Nos. 160, 161 and 162.^[1]

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.

In the early 1960’s, the student population of the school was
less than 3,000. By 1988, the student
population had expanded to some 13,000 students, so that the school community
has an academic population (student, faculty and non-academic staff) of almost
15,000. To cope with the increase in
its enrollment, it has expanded and improved its educational facilities partly
from government appropriation and partly by self-help measures.

True to the concept of a land grant college, the school embarked
on self-help measures to carry out its educational objectives, train its
students, and maintain various activities which the government appropriation
could not adequately support or sustain. In 1984, the CMU approved Resolution No. 160, adopting a livelihood
program called “Kilusang Sariling Sikap Program” under which the land
resources of the University were leased to its faculty and employees. This arrangement was covered by a written
contract. 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 CMU 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. The location of the CMU at Musuan, Bukidnon,
which is quite a distance from the nearest town, was the proper setting for the
adoption of such a program. Among the
participants in this program were Alvin Obrique, Felix Guinanao, Joven
Caballero, Nestor Pulao, Danilo Vasquez, Aronio Pelayo and other complainants. Obrique was a Physics Instructor at the CMU
while the others were employees in the lowland rice project. The other complainants who were not members
of the faculty or non-­academic staff of the CMU, were hired workers or
laborers of the participants in this program. When petitioner Dr. Leonardo Chua became President of the CMU in July
1986, he discontinued the agri-business project for the production of rice,
corn and sugar cane known as 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. As Assistant Director of this agri-business
project, Obrique was found guilty of mishandling the CMU funds and was
separated from service by virtue of Executive Order No. 17, the re-organization
law of the CMU.

Sometime in 1986, under Dr. Chua as President, the CMU launched a
self-help project called CMU-Income Enhancement Program (CMU-IEP) to 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.

Under the terms of a 3-party Memorandum of Agreement^[2]
among the CMU, the CMU-Integrated Development Foundation (CMU-IDF) and groups
or “seldas” of 5 CMU employees, the CMU would provide the use of 4 to
5 hectares of land to a selda for one (1) calendar year. The CMU-IDF would provide researchers and
specialists to assist in the preparation of project proposals and to monitor
and analyze project implementation. The
selda in turn would pay to the CMU P100 as service fee and P1,000 per hectare
as participant’s land rental fee. In
addition, 400 kilograms of the Produce per year would be turned over or donated
to the CMU-IDF. The participants agreed
not to allow their hired laborers or members of their family to establish any
house or live within the vicinity of the project area and not to use the allocated
lot as collateral for a loan. It was
expressly provided that no tenant-landlord relationship would exist as a result
of the Agreement.

Initially, participation in the CMU-IEP was extended only to
workers and staff members who were still employed with the CMU and was not made
available to former workers or employees. In the middle of 1987, to cushion the impact of the discontinuance of
the rice, corn and sugar cane project on the lives of its former workers, the
CMU allowed them to participate in the CMU-IEP as special participants.

Under the terms of a contract called Addendum To Existing
Memorandum of Agreement Concerning Participation To The CMU-Income Enhancement
Program^[3]
a former employee would be grouped with an existing selda of his choice and
provided one (1) hectare for a lowland rice project for one (1) calendar
year. He would pay the land rental
participant’s fee of P1,000.00 per hectare but on a charge-to-crop basis. He would also be subject to the same
prohibitions as those imposed on the CMU employees. It was also expressly provided that no tenant – landlord
relationship would exist as a result of the Agreement.

The one-year contracts expired on June 30, 1988. Some contracts were renewed. Those whose contracts were not renewed were
served with notices to vacate.

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.

On the basis of the above facts, the DARAB found that the private
respondents were not tenants and cannot therefore be beneficiaries under the
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.

The petitioner CMU, in seeking a review of the decisions of the
respondents DARAB and the Court of Appeals, raised the following issues:

1.) Whether or not the DARAB has jurisdiction to
hear and decide Case No. 005 for Declaration of Status of Tenants and coverage
of land under the CARP.

2.) Whether or not respondent Court of Appeals
committed serious errors and grave abuse of discretion amounting to lack of
jurisdiction in dismissing the Petition for Review on Certiorari and
affirming the decision of DARAB.

In their complaint, docketed as DAR Case No. 5, filed with the
DARAB, 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
situated at Sinalayan, Valencia, Bukidnon and Musuan, Bukidnon, consisting of
about 1,200 hectares. We agree with the
DARAB’s finding that Obrique, et. al. are not tenants. Under the terms of the written agreement
signed by Obrique, et. al., pursuant to the livelihood program called
“Kilusang Sariling Sikap Program”, it was expressly stipulated that
no landlord-tenant relationship existed between the CMU and the faculty and
staff (participants in the project). The CMU did not receive any share from the harvest/fruits of the land
tilled by the participants. What the
CMU collected was a nominal service fee and land use participant’s fee in
consideration of all the kinds of assistance given to the participants by the
CMU. Again, the agreement signed by the
participants under the CMU-IEP clearly stipulated that no landlord-tenant
relationship existed, and that, the participants are not share croppers nor
lessees, and the CMU did not share in the produce of the participants’ labor.

In the same paragraph of their complaint, complainants claim that
they are landless peasants. This
allegation requires proof and should not be accepted as factually true. Obrique is not a landless peasant. The facts showed he was a Physics Instructor
at CMU holding a very responsible position and was separated from the service
on account of certain irregularities he committed while Assistant Director of
the Agri-Business Project of cultivating lowland rice. Others may, at the moment, own no land in
Bukidnon but they may not necessarily be so destitute in their places of
origin. No proof whatsoever appears in
the record to show that they are landless peasants.

The evidence on record establish without doubt that the
complainants were originally authorized or given permission to occupy certain
areas of the CMU property for a definite purpose — to carry out certain
university projects as part of the CMU’s program of activities pursuant to its
avowed purpose of giving training and instruction in agricultural and other
related technologies, using the land and other resources of the institution as
a laboratory for these projects. Their
entry into the land of the CMU was with the permission and written consent of the
owner, the CMU, for a limited period and for a specific purpose. After the expiration of their privilege to
occupy and cultivate the land of the CMU, their continued stay was unauthorized
and their settlement on the CMU’s land was without legal authority. A person entering upon lands of another, not
claiming in good faith the right to do so by virtue of any title of his own, or
by virtue of some agreement with the owner or with one whom he believes holds
title to the land, is a squatter.^[4]
Squatters cannot enter the land of another surreptitiously or by stealth, and
under the umbrella of the CARP, claim rights to said property as landless
peasants. Under Section 73 of R.A.
6657, persons guilty of committing prohibited acts of forcible entry or illegal
detainer do not qualify as beneficiaries and may not avail themselves of the
rights and benefits of agrarian reform. Any such person who knowingly and wilfully violates the above provision
of the Act shall be punished with imprisonment or fine at the discretion of the
Court.

In view of the above, the private respondents, not being tenants
nor proven to be landless peasants, cannot qualify as beneficiaries under the
CARP.

The questioned decision of the Adjudication Board, affirmed in toto
by the Court of Appeals, segregating 400 hectares from the CMU land is
primarily based on the alleged fact that the land subject hereof is “not
directly, actually and exclusively used for school sites, because the same was
leased to Philippine Packing Corporation (now Del Monte Philippines)”.

In support of this view, the Board held that the “respondent
University failed to show that it is using actually, really, truly and in fact,
the questioned area to the exclusion of others, nor did it show that the same
is directly used without any intervening agency or person”,^[5]
and “there is no definite and concrete showing that the use of said lands
are essentially indispensable for educational purposes.”^[6]
The reliance by the respondents Board and Appellate Tribunal on the technical
or literal definition from Moreno’s Philippine Law Dictionary and Black’s Law
Dictionary, may give the ordinary reader a classroom meaning of the phrase
“is actually directly and exclusively”, but in so doing they missed
the true meaning of Section 10, R.A. 6657, as to what lands are exempted or
excluded from the coverage of the CARP.

The pertinent provisions of R.A. 6657, otherwise known as the
Comprehensive Agrarian Reform Law of 1988, are as follows:

Sec. 4. SCOPE. — The Comprehensive
Agrarian Reform Law of 1988 shall cover, regardless of tenurial arrangement and
commodity produced, all public and private agricultural lands as provided in
Proclamation No. 131 and Executive Order No. 229 including other lands of the
public domain suitable for agriculture.

More specifically, the following lands are covered by the
Comprehensive Agrarian Reform Program:

(a) All alienable and disposable lands of the
public domain devoted to or suitable for agriculture. No reclassification of forest or mineral lands to agricultural
lands shall be undertaken after the approval of this Act until Congress, taking
into account ecological, developmental and equity considerations, shall have
determined by law, the specific limits of the public domain;

(b) All lands of the public
domain in excess of the specific limits as determined by Congress in the
preceding paragraph;

(c) All other lands owned
by the Government devoted to or suitable for agriculture; and

(d) All private lands
devoted to or suitable for agriculture regardless of the agricultural products
raised or that can be raised thereon.

Sec. 10 EXEMPTIONS AND EXCLUSIONS. –Lands actually, directly and
exclusively used and found to be necessary for parks, wildlife, forest
reserves, reforestation, fish sanctuaries and breeding grounds, watersheds and
mangroves, national defense, school sites and campuses including
experimental farm stations operated by public or private schools for
educational purposes, seeds and seedlings research and pilot production centers,
church sites and convents appurtenant thereto, mosque sites and Islamic centers
appurtenant thereto, communal burial grounds and cemeteries, penal colonies and
penal farms actually worked by the inmates, government and private research and
quarantine centers and all lands with eighteen percent (18%) slope and over,
except those already developed shall be exempt from the coverage of this Act. (Underscoring supplied).

The construction given by the DARAB to Section 10 restricts the land area of the CMU to
its present needs or to a land area presently, actively exploited and utilized
by the university in carrying out its present educational program with its
present student population and academic facility — overlooking the very
significant factor of growth of the university in the years to come. By the nature of the CMU, which is a school
established to promote agriculture and industry, the need for a vast tract of
agricultural land for future programs of expansion is obvious. At the
outset, the CMU was conceived in the same manner as land grant colleges in
America, a type of educational institution which blazed the trail for the
development of vast tracts of unexplored and undeveloped agricultural lands in
the Mid-West. What we now know as Michigan
State University, Penn State University and Illinois State University, started
as small land grant colleges, with meager funding to support their ever
increasing educational programs. They
were given extensive tracts of agricultural and forest lands to be developed to
support their numerous expanding activities in the fields of agricultural
technology and scientific research. Funds for the support of the educational programs of land grant colleges
came from government appropriation, tuition and other student fees, private
endowments and gifts, and earnings from miscellaneous sources.^[7]
It was in this same spirit that President Garcia issued Proclamation No. 476,
withdrawing from sale or settlement and reserving for the Mindanao Agricultural
College (forerunner of the CMU) a land reservation of 3,080 hectares as its
future campus. It was set up in
Bukidnon, in the hinterlands of Mindanao, in order that it can have enough
resources and wide open spaces to grow as an agricultural educational
institution, to develop and train future farmers of Mindanao and help attract
settlers to that part of the country.

In line with its avowed purpose as an agricultural and technical
school, the University adopted a land utilization program to develop and
exploit its 3,080-hectare land reservation as follows:^[8]

No. of Hectares Percentage

a. Livestock and Pasture                             1,016.40                      33

b. Upland Crops                                          616                          
20

c. Campus and Residential
sites                462                          
15

d. Irrigated rice                                             400.40                     
13

e. Watershed and forest
reservation                   308                          
10

f. Fruit and Tree Crops                                154                           5

g. Agricultural
Experimental stations                     123.20                      4

3,080.00                     100%

The first land use plan of the CMU was prepared in 1975 and since
then it has undergone several revisions in line with changing economic
conditions, national economic policies and financial limitations and
availability of resources. The CMU,
through Resolution No. 160 S. 1984, pursuant to its development plan, adopted a
multi?disciplinary applied research extension and productivity program
called the “Kilusang Sariling Sikap Project” (CMU?KSSP). The objectives^[9]
of this program were:

1. Provide researchers who shall assist in (a)
preparation of proposal; (b) monitor project implementation; and (c) collect
and analyze all data and information relevant to the processes and results of
project implementation;

2. Provide the use of land within the
University reservation for the purpose of establishing a lowland rice project
for the party of the Second Part for a period of one calendar year subject to
discretionary renewal by the Party of the First Part;

3. Provide practical training to the Party of
the Second Part on the management and operation of their lowland project upon
request of Party of the Second Part; and

4. Provide technical assistance in the form of
relevant livelihood project specialists who shall extend expertise on
scientific methods of crop production upon request by Party of the Second Part.

In return for the technical assistance extended by the CMU, the
participants in a project pay a nominal amount as service fee. The self-reliance program was an adjunct to
the CMU’s lowland rice project.

The portion of the CMU land leased to the Philippine Packing
Corporation (now Del Monte Phils., Inc.) was leased long before the CARP was passed. The agreement with the Philippine Packing Corporation was not a lease but a Management and Development Agreement, a joint
undertaking where use by the Philippine Packing Corporation of the land was
part of the CMU research program, with the direct participation of faculty and
students. Said contracts with the Philippine Packing Corporation and others
of a similar nature (like MM-Agraplex) were made prior to the enactment of R.A.
6657 and were directly connected to the purpose and objectives of the CMU as an
educational institution. As soon as the
objectives of the agreement for the joint use of the CMU land were achieved as
of June 1988, the CMU adopted a blue print for the exclusive use and
utilization of said areas to carry out its own research and agricultural
experiments.

As to the determination of when and what lands are found to be
necessary for use by the CMU, the school is in the best position to resolve
and answer the question and pass upon the problem of its needs in relation to
its avowed objectives for which the land was
given to it by the State. Neither the DARAB nor the Court of Appeals has the right to substitute
its judgment or discretion on this matter, unless the evidentiary facts are so
manifest as to show that the CMU has no real need for the land.

It is our opinion
that the 400 hectares ordered segregated by the DARAB and affirmed by the Court
of Appeals in its Decision dated
August 20, 1990, is not covered by the CARP because:

(1) It is not alienable and
disposable land of the public domain;

(2) The CMU land
reservation is not in excess of specific limits as determined by Congress;

(3) It is private land
registered and titled in the name of its lawful owner, the CMU;

(4) 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. (Underlining).

Under Section 4 and Section 10
of R.A. 6657, it is crystal clear that the jurisdiction of the DARAB is
limited only to matters involving the implementation of the CARP. More specifically, it is restricted to
agrarian cases and controversies involving lands falling within the coverage of
the aforementioned program. It does not
include those which are actually, directly and exclusively used and found to be
necessary for, among such purposes, school sites and campuses for setting up
experimental farm stations, research and pilot production centers, etc.

Consequently, the DARAB has no power to try, hear and adjudicate
the case pending before it involving a portion
of the CMU’s titled school site,
as the portion of the CMU land
reservation ordered segregated is actually,
directly and exclusively used and found by the school to be necessary for its
purposes. The CMU has constantly raised
the issue of the DARAB’s lack of
jurisdiction and has questioned the respondent’s authority to hear, try
and adjudicate the case at bar. Despite
the law and the evidence on record tending to establish that the fact that the
DARAB had no jurisdiction, it made the adjudication now subject of review.

Whether the DARAB has the authority to order the segregation of a portion of a private property titled
in the name of its lawful owner, even if the claimant is not entitled as a
beneficiary, is an issue we feel we must resolve. The quasi-judicial powers of the DARAB are provided in Executive
Order No. 129-A, quoted hereunder in so
far as pertinent to the issue at bar:

Sec. 13 — AGRARIAN REFORM ADJUDICATION BOARD — There is hereby
created an Agrarian Reform Adjudication Board under the Office of the
Secretary. x x x. The Board shall assume the powers and
functions with respect to adjudication of agrarian reform cases under Executive
Order 229 and this Executive Order x x x.

Sec. 17 — QUASI-JUDICIAL POWERS OF THE DAR. — The DAR is hereby
vested with quasi-judicial powers to determine and adjudicate agrarian reform
matters and shall have exclusive original jurisdiction over all matters
including implementation of Agrarian Reform.

Section 50 of R.A. 6657 confers on the
DAR quasi-judicial powers as follows:

The DAR is hereby vested with primary jurisdiction to determine and
adjudicate agrarian reform matters and shall have original jurisdiction over
all matters involving the implementation of agrarian reform x x x.

Section 17 of Executive Order No. 129-A
is merely a repetition of Section 50, R.A. 6657. There is no doubt that the DARAB has jurisdiction to try and
decide any agrarian dispute in the implementation of the CARP. An agrarian dispute is defined by the same
law as any controversy relating to tenurial rights whether leasehold, tenancy
stewardship or otherwise over lands devoted to agriculture.^[10]

In the case at bar, the DARAB found that the complainants are not
share tenants or lease holders of the CMU, yet it ordered the “segregation
of a suitable compact and contiguous area of Four Hundred Hectares, more or
less”, from the CMU land reservation, and directed the DAR Regional
Director to implement its order of segregation. Having found that the complainants in this agrarian dispute for
Declaration of Tenancy Status are not entitled to claim as beneficiaries of the
CARP because they are not share tenants or leaseholders, its order for the
segregation of 400 hectares of the CMU land was without legal authority. We do not believe that the quasi-judicial function of the DARAB carries
with it greater authority than ordinary courts to make an award beyond what was
demanded by the complainants/petitioners, even in an agrarian dispute. Where the quasi-judicial body finds that the
complainants/petitioners are not entitled to the rights they are demanding, it
is an erroneous interpretation of authority for that quasi-judicial body to
order private property to be awarded to future beneficiaries. The order segregating 400 hectares of the CMU
land was issued on a finding
that the complainants are not entitled as beneficiaries, and on an erroneous
assumption that the CMU land which is excluded or exempted under the law is
subject to the coverage of the CARP. Going beyond what was asked by the complainants who were not entitled to
the relief prayed for, constitutes a grave
abuse of discretion because it
implies such capricious and whimsical exercise of judgment as is equivalent to lack of
jurisdiction.

The education of the youth and agrarian reform are admittedly
among the highest priorities in the government socio-economic programs. In this case, neither need give way to the
other. Certainly, there must still be vast
tracts of agricultural land in Mindanao outside the CMU land reservation which
can be made available to landless peasants, assuming the claimants here, or
some of them can qualify as CARP
beneficiaries. To our mind, the taking of the CMU land which had been
segregated for educational purposes for distribution to yet uncertain beneficiaries
is a gross misinterpretation of the authority and jurisdiction granted by law
to the DARAB.

The decision in this case is of far-reaching significance as far as it concerns state colleges and
universities whose resources and research facilities may be gradually eroded by
misconstruing the exemptions from the CARP. These state colleges and universities are the main vehicles for our
scientific and technological advancement in the field of agriculture, so vital
to the existence, growth and development of this country.

It is the opinion of this Court, in the light of the foregoing
analysis and for the reasons indicated, that the evidence is sufficient to sustain a finding of
grave abuse of discretion by respondents Court of Appeals and DAR Adjudication
Board. We hereby declare the decision
of the DARAB dated September 4, 1989 and the decision of the Court of Appeals
dated August 20, 1990, affirming the decision of the quasi-judicial body, as
null and void and hereby order that they be set aside, with costs against the
private respondents.

SO ORDERED.

Gutierrez, Jr., Cruz, Feliciano, Padilla, Bidin, Griño-Aquino,
Medialdea, Regalado, Davide, Jr., Romero, Nocon, and
Melo, JJ., concur.

Narvasa, C.J., on official leave.

Bellosillo, J., no part, I took
part in the deliberations.

*
Justice Alfredo Marigomen, ponente; Justices Josue N. Bellosillo and
Filemon H. Mendoza, concurring.

^[1]
Exhibits 1, 1-A and 1-B.

^[2]
Exhibit “U”.

^[3]
Exhibit “V”.

^[4]
Mayor and Council of City of Forsyth, et. al. vs. Hooks,
184 S.E. 724 (1936).

^[5]
Rollo, p. 84.

^[6]
Rollo, Ibid.

^[7]
Taken from U.S. DHEW Bulletin, “Status of Land Grant Colleges and
Universities”, LEBA.

^[8]
Annex C of Exhibit W.

^[9]
Rollo, pp. 206-207.

^[10]
Section 3, R.A. 6657.