ISLANDERS CARP-FARMERS G.R. No. 159089
BENEFICIARIES MULTI-PURPOSE
COOPERATIVE, INC., Present:
Petitioner,
Panganiban,
CJ,
Chairman,
- versus - Ynares-Santiago,
Austria-Martinez,
Callejo, Sr., and
Chico-Nazario, JJ
LAPANDAY AGRICULTURAL
AND DEVELOPMENT Promulgated:
CORPORATION,
Respondent. May 3, 2006
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PANGANIBAN, CJ:
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T |
he Department of Agrarian Reform
Adjudication Board (DARAB) has jurisdiction to determine and adjudicate all
agrarian disputes involving the implementation of the Comprehensive Agrarian
Reform Law (CARL). Included in the
definition of agrarian disputes are those arising from other tenurial
arrangements beyond the traditional landowner-tenant or lessor-lessee
relationship. Expressly, these
arrangements are recognized by Republic Act 6657 as essential parts of agrarian
reform. Thus, the DARAB has jurisdiction
over disputes arising from the instant Joint Production Agreement entered into
by the present parties.
The Case
Before us
is a Petition for Review[1]
under Rule 45 of the Rules of Court, seeking to reverse the June 30, 2003
Decision[2] of
the Court of Appeals (CA) in CA-GR CV No. 65498. The assailed Decision disposed as follows:
“WHEREFORE, premises
considered, the appealed decision dated
The Facts
The facts of the case are narrated by
the CA in this wise:
“On
“Almost
three years after, on
“[Respondent]
then filed a Motion to Dismiss on
“On
August 21, 1996, [respondent] then filed a case at the DARAB for Breach of
Contract, Specific Performance, Injunction with Restraining Order, Damages and
Attorney’s Fees. On
“The
[RTC] then issued [its] decision on
“[Petitioner],
before [the CA], rais[ed] the following errors on appeal:
‘I
‘THE [RTC] GRAVELY ERRED IN DISMISSING THE CASE AT
BAR ON THE GROUND OF LACK OF JURISDICTION.
‘II
‘THE [RTC] GRAVELY ERRED IN NOT DECLARING THE JOINT
PRODUCTION AGREEMENT AS NULL AND VOID AB INITIO’”[4]
Ruling of the
Court of Appeals
Finding the relationship between the
parties to be an agricultural leasehold, the CA held that the issue fell
squarely within the jurisdiction of the DARAB.
Hence, the appellate court ruled that the RTC had correctly dismissed
the Complaint filed by petitioner.
Moreover, being in the nature of an
agricultural leasehold and not a shared tenancy, the Joint Production Agreement
entered into by the parties was deemed valid by the CA. The agreement could not be considered
contrary to public policy, simply because one of the parties was a corporation.
Hence,
this Petition.[5]
Issues
Petitioner raises the following issues
for the Court’s consideration:
“I
“Whether
or not x x x the x x x Court of Appeals gravely erred in affirming the
dismissal of the case at bench by RTC of Tagum City on the ground that it has
no jurisdiction over the subject matter and nature of the suit.
“II
“Whether
or not x x x the x x x Court of Appeals gravely erred in finding that the
‘Joint Production Agreement’ is valid instead of declaring it as null and void
ab initio, its provisions, terms and condition, cause and purposes being
violative of [t]he express mandatory provision of R.A. 6657.
“III
“Whether
or not x x x the x x x Court of Appeals gravely erred in holding that the
‘Joint Production Agreement’ is a leasehold contract and therefore valid.
“IV
“Whether
or not x x x the x x x Court of Appeals gravely erred in interpreting and
applying the prevailing doctrines and jurisprudence delineating the
jurisdiction between the regular court and DARAB on the matter of agricultural
land and tenancy relationship.”[6]
Simply put, the question to be
resolved by the Court is this: which of the various government agencies has
jurisdiction over the controversy?
The Court’s
Ruling
The Petition has no merit.
Sole Issue:
Jurisdiction
Section 50 of Republic Act 6657[7] and Section 17
of Executive Order 229[8] vests in the Department
of Agrarian Reform (DAR) the primary and exclusive jurisdiction, both original
and appellate, to determine and adjudicate all matters involving the implementation
of agrarian reform.[9] Through Executive Order 129-A,[10] the President
of the
Moreover, Rule II of the Revised Rules
of the DARAB provides as follows:
“Section 1. Primary and Exclusive
Original and Appellate Jurisdiction. -- The Board shall have primary and
exclusive jurisdiction, both original and appellate, to determine and
adjudicate all agrarian disputes
involving the implementation of the Comprehensive Agrarian Reform Program
(CARP) under Republic Act No. 6657, Executive Order Nos. 228 and 129-A,
Republic Act No. 3844 as amended by Republic Act No. 6389, Presidential Decree
No. 27 and other agrarian laws and their implementing rules and
regulations. Specifically, such
jurisdiction shall include but not be limited to cases involving the following:
a) The rights and obligations of persons, whether natural or juridical, engaged in the
management, cultivation and use of all agricultural lands covered by the CARP
and other agrarian laws[.]”[12]
The subject matter of the present
controversy falls squarely within the jurisdiction of the DARAB. In question are the rights and obligations of
two juridical persons engaged in the management,
cultivation and use of
agricultural land acquired through the Comprehensive Agrarian Reform Program
(CARP) of the government.
Petitioner contends that, there being no tenancy or leasehold
relationship between the parties, this case does not constitute an agrarian
dispute that falls within the DARAB’s jurisdiction.[13]
We clarify. To prove tenancy or an agricultural leasehold
agreement, it is normally necessary to establish the following elements:
1) the parties are the landowner and the tenant or agricultural lessee; 2) the
subject matter of the relationship is a piece of agricultural land; 3) there is
consent between the parties to the relationship; 4) the purpose of the
relationship is to bring about agricultural production; 5) there is personal cultivation on the part of the tenant or agricultural
lessee; and 6) the harvest is shared between the landowner and the tenant
or agricultural lessee.[14]
In the present case, the fifth element
of personal cultivation is clearly absent.
Petitioner is thus correct in claiming that the relationship between the
parties is not one of tenancy or agricultural leasehold. Nevertheless, we believe that the present
controversy still falls within the sphere of agrarian disputes.
An agrarian dispute “refers to any controversy relating to tenurial
arrangements -- whether leasehold, tenancy, stewardship or otherwise -- over
lands devoted to agriculture. Such
disputes include those concerning farm workers’ associations or representations
of persons in negotiating, fixing, maintaining, changing or seeking to arrange
terms or conditions of such tenurial arrangements. Also included is any controversy relating to the terms and conditions
of transfer of ownership from landowners to farm workers, tenants and other
agrarian reform beneficiaries -- whether the disputants stand in the proximate
relation of farm operator and beneficiary, landowner and tenant, or lessor and
lessee.”[15]
It is clear that the above definition
is broad enough to include disputes arising from any tenurial arrangement
beyond that in the traditional landowner-tenant or lessor-lessee relationship.
Tenurial Arrangements
Recognized by Law
The assailed Joint Production
Agreement[16] is a
type of joint economic enterprise. Joint economic enterprises are partnerships
or arrangements entered into by Comprehensive Agrarian Reform Program (CARP)
land beneficiaries and investors to implement agribusiness enterprises in
agrarian reform areas.[17]
Recognizing that agrarian reform extends
beyond the mere acquisition and redistribution of land, the law acknowledges
other modes of tenurial arrangements to effect the implementation of CARP.[18]
In line
with its power to issue rules and regulations to carry out the objectives of
Republic Act 6657,[19] the DAR
issued Administrative Order No. 2, Series of 1999, which issued “Rules and Regulations Governing Joint
Economic Enterprises in Agrarian Reform Areas.” These rules and regulations were to
provide CARP beneficiaries with alternatives to sustain operations of
distributed farms and to increase their productivity.[20]
Section
10 of this administrative order states as follows:
“SEC. 10. Resolution
of Disputes– As a rule, voluntary methods, such
as mediation or conciliation and arbitration, shall be preferred in resolving
disputes involving joint economic enterprises.
The specific modes of resolving disputes shall be stipulated in the
contract, and should the parties fail to do so, the procedure herein shall
apply.
“The
aggrieved party shall first request the other party to submit the matter to
mediation or conciliation by trained mediators or conciliators from DAR,
non-governmental organizations (NGOs), or the private sector chosen by them.
x
x x x x x x x x
“Should
the dispute remain unresolved, it may be brought to either of the following for
resolution depending on the principal cause of action:
‘(a) DAR
Adjudication Board (DARAB) if it involves interpretation and enforcement of an
agribusiness agreement or an agrarian dispute as defined in Sec. 3(d) of RA
6657[.]’”
The present
controversy involves the interpretation and enforcement of the terms of the
Joint Production Agreement. Thus, the
case clearly falls within the jurisdiction of the DARAB. This Court in fact recognized the authority
of the DAR and the DARAB when it ruled thus:
“All controversies on the implementation of the
Comprehensive Agrarian Reform Program (CARP) fall under the jurisdiction of the
Department of Agrarian Reform (DAR), even though they raise questions that are
also legal or constitutional in nature.
All doubts should be resolved in favor of the DAR, since the law has
granted it special and original authority to hear and adjudicate agrarian
matters.”[21]
Validity of the Joint
Production Agreement
As already discussed
above, jurisdiction over the present controversy lies with the DARAB. As the RTC had correctly dismissed the case
on the ground of lack of jurisdiction, it was superfluous for the trial court
-- and the CA for that matter -- to have ruled further on the issue of the
validity of the agreement.
The doctrine of primary jurisdiction precludes the courts from
resolving a controversy over which jurisdiction has initially been lodged with
an administrative body of special competence.[22]
Since the DARAB had already ruled in a separate case on the validity
of the Joint Venture Agreement,[23] the proper remedy for petitioner was to question the Board’s
judgment through a timely appeal with the CA.[24] Because of the manifest lack of jurisdiction on the part
of the RTC, we must defer any opinion on the other issues raised by petitioner until
an appropriate review of a similar case reaches this Court.[25]
WHEREFORE, the Petition is DENIED. Costs against petitioner.
SO ORDERED.
ARTEMIO
V. PANGANIBAN
Chairman,
First Division
W E C O N C U R:
CONSUELO YNARES-SANTIAGO MA. ALICIA AUSTRIA-MARTINEZ
Associate Justice Associate Justice
ROMEO J. CALLEJO, SR.
MINITA V. CHICO-NAZARIO
Associate Justice
Associate Justice
Pursuant
to Section 13, Article VIII of the Constitution, I certify that the conclusions
in the above Decision were reached in consultation before the case was assigned
to the writer of the opinion of the Court’s Division.
ARTEMIO V. PANGANIBAN
Chief Justice
[1] Rollo,
pp. 11-29.
[2]
[3] Assailed CA Decision, p. 6; id. at 36.
[4]
[5] The
case was deemed submitted for decision on
[6] Petitioner’s
Memorandum, pp. 6-7; rollo, pp. 166-167. Original in uppercase.
[7] Otherwise
known as the “Comprehensive Agrarian Reform Law of 1988,”
“SEC. 50. Quasi-Judicial Powers of the DAR. -
The DAR is hereby vested with primary jurisdiction to determine and adjudicate
agrarian reform matters and shall have exclusive original jurisdiction over all
matters involving the implementation of agrarian reform, except those falling
under the exclusive jurisdiction of the Department of Agricultural (DA) and the
Department of Environment and Natural Resources (DENR).”
[8] “Providing the Mechanisms for the Implementation of the
Comprehensive Agrarian Reform Program,”
[9] Ramos v. Stateland Investment Corporation,
GR No. 161973,
[10]
“Reorganizing and Strengthening the Department of
Agrarian Reform and for Other Purposes,”
“SECTION 13. Agrarian Reform Adjudication Board.
— There is hereby created an Agrarian Reform Adjudication Board under the
Office of the Secretary. The Board shall be composed of the Secretary as
Chairman, two (2) Undersecretaries as may be designated by the Secretary, the
Assistant Secretary for Legal Affairs, and three (3) others to be appointed by
the President upon the recommendation of the Secretary as members. A
Secretariat shall be constituted to support the Board. The Board shall assume
the powers and functions with respect to the adjudication of agrarian reform
cases under Executive Order No. 229 and this Executive Order. These powers and
functions may be delegated to the regional offices of the Department in
accordance with rules and regulations to be promulgated by the Board.”
[11] Heirs of Dela Cruz v. Heirs of Cruz, GR
No. 162890,
[12] Italics
supplied. The present case was filed in
1996 under the 1994 DARAB Rules of Procedure.
While this Rule has been revised, the jurisdiction of the DARAB has
remained substantially the same under the 2003 Rules of Procedure. The new Rules of Procedure of the DARAB, Rule
II, Sec. 1, reads:
“SECTION 1. Primary and Exclusive Original
Jurisdiction. The Adjudicator shall have
primary and exclusive original jurisdiction to determine and adjudicate the
following cases:
“1.1 The rights and obligations of persons,
whether natural or juridical, engaged in the management, cultivation, and use
of all agricultural lands covered by Republic Act (RA) No. 6657, otherwise
known as the Comprehensive Agrarian Reform Law (CARL), and other related agrarian
laws[.]”
[13] Petitioner’s
Memorandum, p. 9; rollo, p. 169.
[14] Dandoy v. Tongson, GR No. 144652,
[15] Bautista v. Mag-isa, 438 SCRA 259, 265,
[16] Rollo, pp. 38-45.
[17] DAR
Administrative Order No. 2, Sec. 5 (c), Series of 1999. Sec. 5 (c) states in full:
“Joint Economic Enterprises
generally refer to partnerships or arrangements between beneficiaries and
investors to implement an agribusiness enterprise in agrarian reform
areas. It may take any of the following
forms:
(i)
Joint
Venture whereby the beneficiaries contribute use of the land held individually
or in common and the facilities and improvements if any. On the other hand, the investor furnishes
capital and technology for production, processing and marketing of agricultural
goods, or construction, rehabilitation, upgrading and operation of agricultural
capital assets, infrastructure, and facilities.
It has a personality separate and distinct from its components;
(ii)
Production,
Processing and Marketing Agreement whereby the beneficiaries engage in the
production and processing of agricultural products and directly sell the same
to the investor who provides loans and technology;
(iii)
Build-Operate-Transfer
Scheme whereby the investor introduces, rehabilitates or upgrades, at his own
cost, capital assets, infrastructure, services and facilities applied to the
production, processing and marketing of agricultural products at his own cost,
and operates the same for an agreed period, upon expiration of which,
collective ownership thereof is consolidated with the beneficiaries who own the
land where the improvements and facilities are located;
(iv)
Management
Contract whereby the beneficiaries hire the services of a contractor who may be
an individual, partnership or corporation to assist in the management and
operation of the farm in exchange for a fixed wage and/or commission;
(v)
Service
Contract whereby the beneficiaries engage for a fee the services of a
contractor for mechanized land preparation, cultivation, harvesting,
processing, post-harvest operations, and other farm activities;
(vi)
Lease
Contract whereby the beneficiaries bind themselves to give to the investor the
enjoyment or use of their land for a price certain and for a definite period;
(vii)
Any
combination of the preceding schemes; or
(viii) Such other schemes that will promote
the productivity of agrarian reform areas consistent with existing laws[.]
[18] Republic Act No. 6657 Sec. 35 (2)
authorizes the DAR to enter into contracts with interested private parties on
long-term basis or through joint venture agreements or build-operate-transfer
schemes for the purpose of providing infrastructure and facilities to CARP
farmer beneficiaries and affected landowners.
Sec.
44 (3) further provides for the “[c]ontinuous processing of applications for lease-back arrangements,
joint venture agreements and other schemes that will optimize the operating
size for agriculture production and also promote both security of tenure and
security of income to farmer beneficiaries: Provided, That lease-back
arrangements should be the last resort.”
Executive Order No.
129-A, Sec. 4 (h), also authorizes the DAR to “develop and implement
alternative land tenure systems such as cooperative farming and agro-industrial
estates, among others.”
[19] Republic
Act No. 6657, Sec. 49 provides: “The [Presidential Agrarian Reform Council] and
the DAR shall have the power to issue rules and regulations, whether
substantive or procedural, to carry out the objects and purposes of this Act. Said rules shall take effect ten (10) days
after publication in two (2) national newspapers of general circulation.”
[20] DAR
Administrative Order No. 2, Series of 1999, Sec. 1.
[21] Department
of Agrarian Reform v.
[22] Ros v. Department of Agrarian Reform, 468
SCRA 471,
[23] DARAB
Decision dated
[24] DARAB
Rules of Procedure, Rule XV, Sec. 1, provides:
“SECTION 1. Appeal to the Court of Appeals. Any decision, order, resolution, award or
ruling of the Board on any agrarian dispute or any matter pertaining to the
application, implementation, enforcement, interpretation of agrarian reform
laws or rules and regulations promulgated thereunder, may be brought on appeal
within fifteen (15) days from receipt of a copy thereof, to the Court of
Appeals in accordance with the Rules of Court.”
[25] See
Cadwallader v. Abeleda, 98 SCRA 123,