CASE TITLE Otilia Sta. Ana v. Spouses Carpo G.R. NO.

164340

PONENTE NACHURA, J. DATE November 28, 2008

DOCTRINE The doctrine of primary jurisdiction precludes the courts from resolving a controversy over which
jurisdiction has initially been lodged in an administrative body of special competence. For agrarian
reform cases, jurisdiction is vested in the Department of Agrarian Reform (DAR); more specifically,
in the Department of Agrarian Reform Adjudication Board (DARAB).

Executive Order 229 vested the DAR with (1) quasi-judicial powers to determine and adjudicate
agrarian reform matters; and (2) jurisdiction over all matters involving the implementation of
agrarian reform, except those falling under the exclusive original jurisdiction of the Department of
Agriculture and the Department of Environment and Natural Resources.

FACTS Respondent Leon Carpo (Leon) and his brother Francisco G. Carpo are the registered co-owners of
a parcel of land designated as Lot No. 2175 with an area of 91,337 square meters, more or less. A
portion thereof, consisting of 3.5 hectares, pertained to Leon and his wife, respondent Aurora
Carpo. It was devoted to rice and corn production (subject land) and was tenanted by one
Domingo Pastolero, husband of Adoracion Pastolero. When Domingo passed away, Adoracion
together with her son Elpidio Pastolero, assumed the tenancy rights of Domingo over the subject
land.
However, on December 29, 1983, Adoracion, by executing a notarized Pinanumpaang Salaysay
with the conformity of Leon, and for a consideration, transferred her rights in favor of petitioner
Otilia Sta. Ana (petitioner) who, together with her husband, Marciano de la Cruz, became the new
tenants of the subject land.
At the outset, the parties had a harmonious tenancy relationship. Unfortunately, circumstances
transpired which abraded the relationship. The Department of Agrarian Reform (DAR) mediated in
order to amicably settle the controversy, but no settlement was reached by the parties. Thus, the
instant case.
In their Complaint for Ejectment due to Non-Payment of Lease Rentals, respondents alleged that it
was their agreement with petitioner and Marciano to increase the existing rentals from 36 cavans
to 45 cavans, and that, if respondents wanted to repossess the property, they only had to pay the
petitioner the amount of P72,500.00, the same amount paid by the latter to Adoracion.
Respondents further averred that despite repeated demands, petitioner refused to pay the actual
rentals from July 1985 to September 1989, in violation of Presidential Decree (P.D.) No. 817; and
that the subject land had been declared, upon the recommendation of the Human Settlements
Committee, suitable for commercial and industrial purposes, per Zoning Ordinance of 1981 of the
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 Municipality of Sta. Rosa, Laguna. Respondents prayed that petitioner be ejected from the subject
land and be directed to pay P75,016.00 as unpaid rentals.

Petitioner and Marciano denied that there was an agreement; that neither was there an
agreement as to the future surrender of the land in favor of the respondents; that they did not
refuse to pay the rentals because they even sent verbal and written notices to the respondents,
advising them to accept the same; and that in view of the latter’s failure to respond, petitioner and
Marciano were compelled to sell the harvest and to deposit the proceeds thereof in Savings
Account. As their special affirmative defense, petitioner and Marciano claimed that Marciano is a
farmer-beneficiary of the subject land pursuant to P.D. 27. Petitioner and Marciano

The PARAD ruled that petitioner and Marciano deliberately defaulted in the payment of the rentals
due the respondents. The PARAD also declared that the subject land is not covered by Presidential
Decree No. 27, Republic Act No. 6657, and Executive Order No. 228, based on the following:

“The defendant must have more than seven (7) hectares of land principally devoted to the planting
of palay. Area over seven (7) hectares shall be the one to be covered by PD 27 on Operation Land
Transfer (OLT). In the case at bar, defendants failed to prove that plaintiff has more than the
required riceland. In fact the subject 3.5 hectares are jointly owned by two. Hence, coverage for
OLT is remote.”

Petitioner and Marciano sought relief from the DARAB which ruled in their favor and held that for
non-payment of lease rentals to warrant the dispossession and ejectment of a tenant, the same
must be made in a willful and deliberate manner.

However, CA affirmed the factual findings of the PARAD that petitioner and Marciano failed to pay
the rentals and that there was no valid tender of payment. CA further held that the subject land
was not covered by P.D. 27, Republic Act (R.A.) No. 6657 and Executive Order (E.O.) No. 228, since
the same had become a residential, commercial and industrial land.

ISSUE/S Whether the CA erred in ruling that the subject land had already become residential, commercial
and/or industrial, thus, excluded from the coverage of our laws on agrarian reform

RULING/S The Supreme Court ruled in the affirmative.

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PARAD acted without jurisdiction when it held that the subject land was no longer covered by our
agrarian laws because of the retention rights of the respondents. The CA likewise acted without
jurisdiction when it ruled that the land had become non-agricultural based on a zoning ordinance
of 1981– on the strength of a mere vicinity map. These rulings violated the doctrine of primary
jurisdiction.

The doctrine of primary jurisdiction precludes the courts from resolving a controversy over which
jurisdiction has initially been lodged in an administrative body of special competence. For agrarian
reform cases, jurisdiction is vested in the Department of Agrarian Reform (DAR); more specifically,
in the Department of Agrarian Reform Adjudication Board (DARAB). Executive Order 229 vested
the DAR with:

(1) quasi-judicial powers to determine and adjudicate agrarian reform matters; and
(2) jurisdiction over all matters involving the implementation of agrarian reform, except those
falling under the exclusive original jurisdiction of the Department of Agriculture and the
Department of Environment and Natural Resources.

Agrarian disputes, as defined by law and settled in jurisprudence, are within the primary and
exclusive original jurisdiction of the PARAD and the DARAB, while issues of retention and non-
coverage of a land under agrarian reform, among others, are within the domain of the DAR
Secretary.

Thus, Section 3, Rule II of the 2003 DARAB Rules of Procedure provides:

SECTION 3. Agrarian Law Implementation Cases. – The Adjudicator or the Board shall have no
jurisdiction over matters involving the administrative implementation of RA No. 6657,
otherwise known as the Comprehensive Agrarian Reform Law (CARL) of 1988 and other
agrarian laws as enunciated by pertinent rules and administrative orders, which shall be under
the exclusive prerogative of and cognizable by the Office of the Secretary of the DAR in
accordance with his issuances

XXX

Verily, there is an established tenancy relationship between petitioner and respondents in this
case. An action for Ejectment for Non-Payment of lease rentals is clearly an agrarian dispute,
cognizable at the initial stage by the PARAD and thereafter by the DARAB. But issues with respect
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to the retention rights of the respondents as landowners and the exclusion/exemption of the
subject land from the coverage of agrarian reform are issues not cognizable by the PARAD and the
DARAB, but by the DAR Secretary because, as aforementioned, the same are Agrarian Law
Implementation (ALI) Cases.