Central Mindanao University vs. Department of Agrarian Reform Adjudication Board

A state agricultural university’s titled land reservation actually, directly and exclusively used and found necessary for school site/campus and experimental farm stations is exempt from the CARP under Section 10 of R.A. 6657 and outside DARAB jurisdiction; DARAB cannot order its segregation for future beneficiaries after finding the complainants are not tenants or beneficiaries.

CMU is a state agricultural university established to promote agriculture and industry, and its land reservation was granted by the State for educational purposes. R.A. 6657, the Comprehensive Agrarian Reform Law of 1988, defines the scope of the CARP and exempts from coverage lands actually, directly and exclusively used and found necessary for school sites and campuses, including experimental farm stations operated by public or private schools for educational purposes.

CMU began as a farm school at Marilang, Bukidnon in early 1910, expanded into the Bukidnon National Agricultural High School, and later became a college at Musuan before becoming the Central Mindanao University. On January 16, 1958, President Carlos P. Garcia issued Proclamation No. 476, upon the recommendation of the Secretary of Agriculture and Natural Resources and pursuant to Section 53 of Commonwealth Act No. 141, as amended, withdrawing from sale or settlement and reserving for the Mindanao Agricultural College a site that would become the CMU campus. A total land area of 3,080 hectares was surveyed and registered and titled in CMU’s name under OCT Nos. 160, 161 and 162. During the cadastral hearing, several tribes belonging to cultural communities opposed the registration and claimed ancestral lands; some claims were granted, reducing the titled area from 3,401 hectares to 3,080 hectares.

In 1984, CMU approved Resolution No. 160, adopting the “Kilusang Sariling Sikap Program” under which the university leased land resources to its faculty and employees under a written contract. Under the program, faculty and staff formed groups of five members each, and CMU provided technical know-how, practical training and assistance so that each group could cultivate 4 to 5 hectares for a lowland rice project. Each group paid CMU a service fee and a land use participant’s fee; the contract prohibited participants and their hired workers from establishing houses or living in the project area and from using the cultivated land as collateral, and it expressly stipulated that no landlord-tenant relationship existed between CMU and the faculty or employees. Among the participants were Alvin Obrique, a Physics Instructor at CMU, and Felix Guinanao, Joven Caballero, Nestor Pulao, Danilo Vasquez, Aronio Pelayo and other complainants; the other complainants who were not faculty or non-academic staff were hired workers or laborers of the participants.

When Dr. Leonardo Chua became President of CMU in July 1986, he discontinued the Agri-Business Management and Training Project for rice, corn and sugar cane due to losses. Some CMU personnel, including the complainants, were laid off; Obrique, who had been Assistant Director of the project, was found guilty of mishandling CMU funds and was separated from service by virtue of Executive Order No. 17, the reorganization law of CMU. Also in 1986, under Dr. Chua, CMU launched the CMU-Income Enhancement Program (CMU-IEP) to develop unutilized land resources, promote self-reliance, provide socio-economic and technical training in actual field project implementation, and augment faculty and staff income.

Under a three-party Memorandum of Agreement among CMU, the CMU-Integrated Development Foundation (CMU-IDF), and groups or “seldas” of five CMU employees, CMU provided the use of 4 to 5 hectares of land to a selda for one calendar year; CMU-IDF provided researchers and specialists to assist in project proposals and monitor implementation; and the selda paid CMU P100 as service fee and P1,000 per hectare as participant’s land rental fee, and turned over or donated 400 kilograms of produce per year to CMU-IDF. The participants agreed not to allow hired laborers or family members to establish houses or live within the vicinity of the project area and not to use the allocated lot as collateral, and the agreement expressly provided that no tenant-landlord relationship would exist. Initially, participation was limited to current workers and staff; in the middle of 1987, to cushion the impact of the discontinued rice, corn and sugar cane project, CMU allowed former workers to participate as special participants under an Addendum to Existing Memorandum of Agreement Concerning Participation to the CMU-Income Enhancement Program, under which a former employee was grouped with an existing selda, given one hectare for a lowland rice project for one calendar year, paid the P1,000 per hectare land rental participant’s fee on a charge-to-crop basis, and was subject to the same prohibitions and the express no tenant-landlord relationship clause.

The one-year contracts expired on June 30, 1988; some were renewed, while those not renewed were served 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 service, and the alleged harassment by school authorities precipitated the complaint. In DAR Case No. 5, Obrique and others claimed they were tenants of CMU and/or landless peasants occupying about 1,200 hectares of CMU land in Sinalayan, Valencia, Bukidnon and Musuan, Bukidnon. The DARAB found that they were not tenants and could not be beneficiaries under the CARP; it also found that the land was not directly, actually and exclusively used for school sites because it had been leased to Philippine Packing Corporation (now Del Monte Philippines), that CMU failed to show actual use to the exclusion of others, and that there was no definite and concrete showing that the land was essentially indispensable for educational purposes.

CMU’s land utilization program allocated its 3,080-hectare reservation as follows: 1,016.40 hectares for livestock and pasture; 616 hectares for upland crops; 462 hectares for campus and residential sites; 400.40 hectares for irrigated rice; 308 hectares for watershed and forest reservation; 154 hectares for fruit and tree crops; and 123.20 hectares for agricultural experimental stations. 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 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, CMU adopted a blueprint for the exclusive use and utilization of said areas to carry out its own research and agricultural experiments.

• DARAB Jurisdiction: Petitioner argued that DARAB had no jurisdiction to hear and decide DAR Case No. 5 for Declaration of Status of Tenants and coverage under the CARP because the CMU land is exempt under Section 10 of R.A. 6657 as land actually, directly and exclusively used and found necessary for school site and campus, including experimental farm stations, and DARAB jurisdiction is limited to implementation of the CARP over covered lands.
• Authority to Hear and Adjudicate: Petitioner maintained that DARAB had no authority to hear, try and adjudicate the case involving a portion of CMU’s titled school site, which is actually, directly and exclusively used and found by the school to be necessary for its purposes.
• Grave Abuse of Discretion: Petitioner argued that the CA committed serious errors and grave abuse of discretion amounting to lack of jurisdiction in dismissing the Petition for Review on Certiorari and affirming the DARAB decision.

• DARAB Jurisdiction: Whether DARAB has jurisdiction to hear and decide DAR Case No. 5 for Declaration of Status of Tenants and coverage of the CMU land under the CARP.
• Authority to Order Segregation: Whether DARAB has authority to order the segregation of 400 hectares of CMU’s private titled land for CARP distribution after finding the complainants are not tenants or beneficiaries.
• CA Grave Abuse of Discretion: Whether the CA committed serious errors and grave abuse of discretion amounting to lack of jurisdiction in dismissing the Petition for Review on Certiorari and affirming the DARAB decision.

• DARAB Jurisdiction: No. DARAB jurisdiction is limited to implementation of the CARP over lands covered by it; the CMU land is exempt under Section 10 of R.A. 6657 as land actually, directly and exclusively used and found necessary for school site/campus and experimental farm stations.
• Authority to Order Segregation: No. Having found the complainants were not tenants or beneficiaries, DARAB had no legal authority to order the segregation of 400 hectares of CMU’s private titled property for future beneficiaries; the order was grave abuse of discretion.
• CA Grave Abuse of Discretion: Yes. The CA affirmed a DARAB decision issued without jurisdiction and with grave abuse of discretion; the SC declared both decisions null and void and set them aside.

• DARAB Jurisdiction: Sections 4 and 10 of R.A. 6657 define CARP coverage and exemptions. DARAB’s quasi-judicial power under Section 13 and Section 17 of E.O. No. 129-A and Section 50 of R.A. 6657 is limited to agrarian disputes in the implementation of the CARP, meaning lands falling within CARP coverage. The CMU reservation is not alienable and disposable public domain, is not in excess of specific limits determined by Congress, and is private land registered and titled in CMU’s name. It is exempt under Section 10 because the lands are actually, directly and exclusively used and found necessary for school site and campus, including experimental farm stations for educational purposes, and for establishing seed and seedling research and pilot production centers. The DARAB’s dictionary-based narrow construction ignored the nature of CMU as a land grant college and its need for vast agricultural land for future expansion; the school is in the best position to determine what lands are necessary for its avowed objectives, and neither DARAB nor CA may substitute its judgment unless the evidentiary facts manifestly show CMU has no real need. Thus DARAB had no jurisdiction over the portion of CMU’s titled school site.
• Authority to Order Segregation: An agrarian dispute is a controversy relating to tenurial rights over lands devoted to agriculture. DARAB found Obrique et al. were not share tenants or leaseholders and not landless peasants; Obrique was a Physics Instructor separated for irregularities, and no proof showed the others were landless peasants. Their entry was with CMU’s permission for a limited period and specific purpose; after expiration, continued stay was unauthorized, and squatters cannot claim CARP rights as landless peasants under Section 73 of R.A. 6657. Since the complainants were not entitled to the rights demanded, DARAB’s order to segregate 400 hectares of CMU’s private property for future beneficiaries exceeded its authority; a quasi-judicial body cannot award beyond what the complainants demanded, and doing so was grave abuse of discretion equivalent to lack of jurisdiction.
• CA Grave Abuse of Discretion: Grave abuse of discretion implies capricious and whimsical exercise of judgment equivalent to lack of jurisdiction. The CA affirmed in toto the DARAB decision even though DARAB had no jurisdiction over exempt CMU land and had ordered segregation despite finding the complainants were not beneficiaries. The evidence was sufficient to sustain a finding of grave abuse of discretion by both DARAB and CA; the SC therefore declared both decisions null and void and set them aside.

• CARP exemption for school sites and campuses — Section 10 of R.A. 6657 exempts from CARP coverage lands actually, directly and exclusively used and found necessary for school sites and campuses, including experimental farm stations operated by public or private schools for educational purposes, and for seeds and seedling research and pilot production centers. The SC applied this to CMU’s 3,080-hectare titled reservation, rejecting DARAB’s narrow dictionary-based reading.
• DARAB jurisdiction limited to CARP implementation — DARAB has quasi-judicial power only over agrarian disputes involving lands covered by the CARP; it has no jurisdiction over lands exempt under Section 10. The SC held that because the CMU land is exempt, DARAB could not hear and decide the case over the 400-hectare portion.
• School’s determination of necessary lands — A school is in the best position to determine when and what lands are found necessary for its avowed objectives; DARAB and CA cannot substitute their judgment unless the evidentiary facts manifestly show the school has no real need for the land. Applied to CMU as a land grant college needing room for future expansion.
• Quasi-judicial body cannot award beyond demand — A quasi-judicial body that finds complainants are not entitled to the rights they demand cannot order private property to be awarded to future beneficiaries; such an order is grave abuse of discretion equivalent to lack of jurisdiction. Applied when DARAB ordered segregation of 400 hectares despite finding complainants not tenants or beneficiaries.
• Squatters not CARP beneficiaries — Under Section 73 of R.A. 6657, persons guilty of forcible entry or illegal detainer do not qualify as beneficiaries and may not avail themselves of agrarian reform rights. The SC held that complainants who entered CMU land with permission for a limited period and continued after expiration were unauthorized occupants/squatters and could not claim as landless peasants under the CARP.

• “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.” — Defines DARAB jurisdiction and excludes exempt school lands from its authority.
• “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 for the land.” — Establishes deference to the school’s determination of necessary lands absent manifest evidence of no real need.
• “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.” — Holds that DARAB cannot order segregation after finding the complainants have no beneficiary status.
• “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.” — States the rule that a quasi-judicial body cannot award private property to future beneficiaries beyond the demand of unsuccessful complainants.

• Mayor and Council of City of Forsyth vs. Hooks, 184 S.E. 724 (1936) — Cited in the decision for the definition of a squatter: a person entering upon lands of another without claiming good faith right by title or agreement with the owner is a squatter.

• Section 4, R.A. 6657 — Defines the scope of the CARP over public and private agricultural lands; the SC used it to show that DARAB jurisdiction is limited to lands covered by the CARP.
• Section 10, R.A. 6657 — Exempts lands actually, directly and exclusively used and found necessary for school sites and campuses, including experimental farm stations operated by public or private schools for educational purposes, and seeds and seedling research and pilot production centers; applied to the CMU reservation.
• Section 73, R.A. 6657 — Disqualifies persons guilty of forcible entry or illegal detainer from being beneficiaries; applied to the complainants whose continued stay after expiration of permission was unauthorized.
• Section 13, Executive Order No. 129-A — Creates the DARAB and vests it with powers and functions over adjudication of agrarian reform cases; the SC used it with Section 50 to define DARAB jurisdiction.
• Section 17, Executive Order No. 129-A — Vests the DAR with quasi-judicial powers to determine and adjudicate agrarian reform matters and exclusive original jurisdiction over all matters including implementation of agrarian reform; the SC treated it as a repetition of Section 50, R.A. 6657 and limited to CARP implementation.
• Section 50, R.A. 6657 — Vests the DAR with primary jurisdiction to determine and adjudicate agrarian reform matters and original jurisdiction over all matters involving implementation of agrarian reform; the SC held this does not extend to exempt lands.
• Section 3, R.A. 6657 — Defines an agrarian dispute as any controversy relating to tenurial rights over lands devoted to agriculture; the SC noted that DARAB found no tenancy.
• Proclamation No. 476 (Jan. 16, 1958) — Issued pursuant to Section 53, Commonwealth Act No. 141, as amended, withdrawing from sale or settlement and reserving 3,080 hectares for the Mindanao Agricultural College; the SC treated the reservation as the school site/campus of CMU.