Department of Agrarian Reform vs. Department of Education, Culture and Sports

A government-owned agricultural land is not exempt from CARP coverage under Section 10 of R.A. No. 6657 unless the land itself is actually, directly, and exclusively used and found necessary for school sites, campuses, or experimental farm stations for educational purposes; the mere use of lease income derived from the land for educational purposes does not satisfy the exemption.

In 1921, Esteban Jalandoni donated two agricultural lots (Lot No. 2509 and Lot No. 817-D, totaling 189.2462 hectares) located in Negros Occidental to the Bureau of Education, now the Department of Education, Culture and Sports (DECS). Titles were transferred to DECS under TCT No. 167175. On July 15, 1985, DECS leased the properties to Anglo Agricultural Corporation for ten agricultural crop years, subsequently renewing the lease for another ten years. The lands were primarily planted to sugarcane. No legislative or presidential act classified the lands as mineral, forest, residential, commercial, or industrial, leaving them as alienable and disposable lands of the public domain suitable for agriculture.

• The Donated Properties: Esteban Jalandoni donated Lot 2509 (111.4791 hectares) and Lot 817-D (77.7671 hectares) to respondent DECS in 1921. Titles were issued in DECS's name.
• Lease to Private Corporation: DECS leased the agricultural lands to Anglo Agricultural Corporation on July 15, 1985, for ten crop years (1984-1985 to 1993-1994). The lease was renewed for another ten crop years (1995-1996 to 2004-2005).
• Petition for CARP Coverage: On June 10, 1993, farmworkers claiming to be regular farmworkers of the subject lands filed a petition for CARP coverage with the MARO of Escalante.
• Administrative Approval: MARO Piñosa issued a Notice of Coverage and recommended approval. On August 7, 1998, DAR Regional Director Dominador B. Andres approved the CARP coverage, directing the acquisition and distribution of the landholdings to qualified beneficiaries. The DAR Secretary affirmed this order on appeal.
• Judicial Reversal: DECS successfully assailed the DAR Secretary's order before the Court of Appeals, which set aside the coverage order, prompting the DAR to elevate the matter to the Supreme Court.

• Exemption Requirement: Petitioner DAR argued that the subject lands are not exempt from CARP coverage because the properties are not actually, directly, and exclusively used as school sites or campuses, having been leased to a private agricultural corporation.
• Use of Land vs. Income: Petitioner maintained that the exemption under Section 10, R.A. No. 6657 requires the land per se, not merely the income derived therefrom, to be actually, directly, and exclusively used for educational purposes.

• Educational Purpose of Income: Respondent DECS sought exemption from CARP coverage on the ground that all income derived from the contract of lease with Anglo Agricultural Corporation was actually, directly, and exclusively used for educational purposes, specifically for the repairs and renovations of schools in the nearby locality.

• CARP Exemption: Whether government-owned agricultural lands leased to a private corporation are exempt from CARP coverage on the ground that the lease income is used for educational purposes.
• Qualification of Beneficiaries: Whether the farmers working the subject lands are qualified CARP beneficiaries.

• CARP Exemption: The exemption was denied. Section 10 of R.A. No. 6657 explicitly requires that the land itself must be "actually, directly, and exclusively used and found to be necessary" for school sites, campuses, or experimental farm stations operated for educational purposes. Applying the plain meaning rule (verba legis), the statutory language admits no interpretation whereby the use of income substitutes for the actual use of the land. Because the subject lands were leased to Anglo Agricultural Corporation for the furtherance of its business—not for educational purposes—the exemption does not apply. The case was distinguished from Central Mindanao University v. DARAB, where the land was used as part of a research program with direct participation of faculty and students, thereby satisfying the requirement that the land itself be used for educational purposes.
• Qualification of Beneficiaries: The Court of Appeals' finding that the farmers were not qualified beneficiaries was reversed. The identification and selection of CARP beneficiaries are matters strictly involving the administrative implementation of CARP, vested in the DAR Secretary under Section 15 of R.A. No. 6657. The BARC certified the farmers as potential beneficiaries, and the MARO issued a Notice of Coverage. Absent grave abuse of discretion, courts must exercise great caution in substituting their own determination for that of the administrative agency.

• Plain Meaning Rule (Verba Legis) — Where the words of a statute are clear, plain, and free from ambiguity, they must be given their literal meaning and applied without attempted interpretation. Applied to Section 10 of R.A. No. 6657, the explicit requirement that the land be "actually, directly, and exclusively used" for educational purposes precludes interpreting the provision to allow exemption based merely on the use of lease income for educational ends.
• Administrative Expertise in CARP Implementation — The identification and selection of CARP beneficiaries are matters involving strictly the administrative implementation of the CARP, vested in the Secretary of Agrarian Reform. Courts will not substitute their judgment for that of the administrative agency absent a showing of grave abuse of discretion.

• "The importance of the phrase 'actually, directly, and exclusively used and found to be necessary' cannot be understated... The words of the law are clear and unambiguous. Thus, the 'plain meaning rule' or verba legis in statutory construction is applicable in this case."
• "To be exempt from the coverage, it is the land per se, not the income derived therefrom, that must be actually, directly and exclusively used for educational purposes."

• Central Mindanao University v. Department of Agrarian Reform Adjudication Board, G.R. No. 100091 (1992) — Distinguished. In CMU, the subject land was reserved for the college and utilized as an experimental farm station with faculty and student participation, satisfying the requirement that the land itself be used for educational purposes. The subject lands in the present case were leased to a private corporation for business, not educational, purposes.
• Osea v. Malaya, G.R. No. 139821 (2002) — Followed regarding the application of the plain meaning rule or verba legis in statutory construction.
• Lercana v. Jalandoni, G.R. No. 132286 (2002) — Cited to support the principle that the identification and selection of CARP beneficiaries are matters involving strictly the administrative implementation of the CARP.

• Section 10, Republic Act No. 6657 (as amended by R.A. No. 7881) — Enumerates lands exempt from CARP coverage, specifically "Lands actually, directly and exclusively used and found to be necessary for national defense, school sites and campuses, including experimental farm stations operated by public or private schools for educational purposes." Interpreted strictly to require the land itself, not merely its income, to be used for the enumerated educational purposes.
• Section 4, Republic Act No. 6657 — Defines CARP coverage to include all public and private agricultural lands. Applied to include the subject alienable and disposable lands of the public domain suitable for agriculture.
• Section 3(b) and (c), Republic Act No. 6657 — Defines "agriculture, agricultural enterprises or agricultural activity" and "agricultural land." Applied to classify the subject properties as agricultural lands, there being no legislative or presidential act classifying them otherwise.
• Section 15, Republic Act No. 6657 — Vests in the DAR, in coordination with the BARC, the registration of qualified agrarian reform beneficiaries. Applied to uphold the DAR Secretary's administrative determination of the farmers' qualifications.

Davide, Jr., C.J., (Chairman), Carpio, and Azcuna, JJ.