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VOL. 474, OCTOBER 25, 2005 113

Danan vs. Court of Appeals
*
G.R. No. 132759. October 25, 2005.

ALEJANDRO DANAN, TIRSO LINGAD, JR., AMADO

BELLEZA, CARLITO SANTOS, LADISLAO DANAN,
RUBEN SAMBAT, RODRIGO DANAN, ABEDNIDO
DANAN, FELIX ESCUETA, ROMEO TALA, ADELOMO
BALUYOT, PEDRO TALA, RUBEN MANGANTI,
PAQUITO CRUZ, RICARDO DIMARUCUT, RUFINO DEL
ROSARIO, MARCOS PANGAN, LAURA MANIAGO,
LAMBERTO DANAN, FLORNARDO MANANSALA,

_______________

* SECOND DIVISION.

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114 SUPREME COURT REPORTS ANNOTATED

Danan vs. Court of Appeals

DOMINADOR ARTOLA, ROBERTO ZUÑIGA, JR., JOSE

MENDOZA, ROMAN BERNAL, BENEDICTO DANAN,
JOEL DANAN, RODRIGO PAULE, JIMMY MANALAC,
FELICIANO MACASPAC, MARIANO MANANSALA,
SILVESTRE MANUEL, FAUSTINO PANGAN,
FLORENCIO PANGAN, CONRADO CARLOS, RODRIGO
PANGAN, MAXIMINIANO DANAN, PESCASIO
DIMARUCUT, DANIEL DANAN, LUCIANO MANLAPAZ,
ARMANDO DANAN, FELICIANO MALLARI,
REYNALDO MUSNI, RODEL ZUNIGA, SOTERO
MONTEMAYOR, RICARDO DANAN, ALFREDO
MORALES, JESUS NUNAG, ABRAHAM MANUYAG,
PEDRO MERCADO, OSCAR MANALILI, FORTUNATO
MANUEL, ROSITA BERNAL, RUBEN MIRANDA,
NICOLAS MANANSALA, JOSE MANLAPAZ, JR.,
DIOSDADO LINGAD, MONICA TALA, JULIE CORTES,
ANDRES PAULE, RONNIE PAULE, CARLITO AGUILUS,
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ROMEO BALINGIT, BENIGNO PORTALES, ARNEL

SAMBAT, ALFREDO ALFARO, ROMEO ALFARO,
FELICIANO BUCAD, SR., ONADAB ISIP, CARLITO
DIMACALI, JAIME BAUTISTA, ELIAS BALINGIT,
REMY CARLOS, MARIANO SANTOS, FEDERICO
MANLAPAZ, REYNALDO SANTOS, ADELAIDA CALMA,
GREGORIO CALMA, PEPITO ALFARO, FERNANDO
MANANSALA, JOE RAMMIE EMILIA, ROGELIO
CORTES, DOMINADOR MALIT, ELPIDIO TALA,
RODRIGO TALA, SALVADOR TALA, ROMEO TALA,
REMEO DANAN, EDUARDO DANAN, CEZAR DANAN,
BENJAMIN PANGAN, DOMINGO SUMANDAL, MOISES
SUSI, RODOLFO GERVACIO, SR., RODOLFO
GERVACIO, JR., JESUS BERNAL, ALFREDO SANTOS,
FORTUNATO DANAN, FRANCISCO MACASPAC,
EDWIN MACASPAC, FELICISIMO MACASPAC,
DIOSDADO MACASPAC, REYNALDO TIMBANG,
EULOGIO MACASPAC, RICARDO CHAVEZ, RUBEN
MANUYAG, DELFIN TALA, TOMAS PAULE, CLARO
SUBA, DIOSDADO FLORES, FRANCISCO NORALES,
VENANCIO FLORES, DANTE FLORES, AGUSTIN
ARIOLA, RICARDO ARIOLA, ARTEMIO FLORES,
FELICIANO BUCOD, JR., ROLANDO SERRANO,
JUANITO LINTAG, TOMAS TALA, LEONARDO
RONQUILLO, LAMBERTO TALA, RICARDO LINGAD,
ANOTNIO SANTOS, IGNACIO

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Danan vs. Court of Appeals

TRESVALLES, ERNESTO PITUC, TEOFILO MUNOZ,

BIENVENIDO BELLEZA, MANUEL MAGUIAT, OFELIA
MIGUEL, PEDRO TALA, ALEJANDRO TALA, RODRIGO
SERRANO, FRANCISCO BERNARTE, OSCAR
SERRANO, CONSOLACION SERRANO, CEZAR
SERRANO, JOSE BERNARTE, JESUS BERNARTE,
CALIXTO SERRANO, ROBERTO MALLARI, ARNOLD
PATRICIA, REYNALDO OSBUAL, WILFREDO
TAPALLA, ELIZALDE FAPREQUILAN, REYNALDO
CASTRO, LUISITO MALLARI, ANTONIO CASTRO,
MARCELO MANANSALA, MARFELA AQUINO,
HERMOGENES LACAP, VIRGILIO MANANSALA,
NESTOR DATU, ROMEO DATU, ALEGRIA BELLEZA,
PURITA MIRANDO, MARIA PEREZ, ALBERTO DELA

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CRUZ, ARTURO DELA CRUZ, GENERITO TALA,

CELESTINO TAPALLA, JIMMY TAPALLA, MIKE
TAPALLA, REMIGIO OSBUAL, MYRNA MIGUEL,
EDUARDO ESCUETA, CONRADO MALLARI, AVELINO
MIGUEL, VICTORINO TALA, IGNACIO DELA CRUZ,
ROLANDO OSBUAL and ROLANDO MASANQUE,
petitioners, vs. THE HONORABLE COURT OF APPEALS
and ESTRELLA ARRASTIA, respondents.

G.R. No. 132866. October 25, 2005.*

THE COURT OF APPEALS and THE DEPARTMENT OF

AGRARIAN REFORM ADJUDICATION BOARD,
petitioners, vs. ESTRELLA ARRASTIA, respondent.

Agrarian Reform Law; Tenancy; Mere occupation or

cultivation of an agricultural land does not automatically convert
a tiller or farmworker into an agricultural tenant recognized
under agrarian laws.—Mere occupation or cultivation of an
agricultural land does not automatically convert a tiller or
farmworker into an agricultural tenant recognized under agrarian
laws. The essential requisites of a tenancy relationship are: (1)
the parties are the landowner and the tenant; (2) the subject is
agricultural land; (3) there is consent among the parties; (4) the
purpose is agricultural production; (5) there is personal
cultivation; and (6) there is sharing of harvests. All these
requisites must concur in order to create a tenancy relationship
between the parties. In the case at bar, it has not been sufficiently
established that private petitioners’ occupation and cultivation of
the disputed property was with the consent of the landowners.

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Danan vs. Court of Appeals

Same; Same; Constitutional Law; The right of retention is a

constitutionally guaranteed right, which is subject to qualification
by the legislature. For as long as the area to be retained is compact
or contiguous and does not exceed the retention ceiling of five (5)
hectares, a landowner’s choice of the area to be retained must
prevail.—The right of retention is a constitutionally guaranteed
right, which is subject to qualification by the legislature. It serves
to mitigate the effects of compulsory land acquisition by balancing
the rights of the landowner and the tenant and by implementing
the doctrine that social justice was not meant to perpetrate an

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injustice against the landowner. A retained area, as its name

denotes, is land which is not supposed to anymore leave the
landowner’s dominion, thus sparing the government from the
inconvenience of taking land only to return it to the landowner
afterwards, which would be a pointless process. For as long as the
area to be retained is compact or contiguous and does not exceed
the retention ceiling of five (5) hectares, a landowner’s choice of
the area to be retained must prevail. Moreover, Administrative
Order No. 4, series of 1991, which supplies the details for the
exercise of a land-owner’s retention rights, likewise recognizes no
limit to the prerogative of the landowner, although he is
persuaded to retain other lands instead to avoid dislocation of
farmers. Therefore, there is no legal and practical basis to order
the commencement of the administrative proceedings for the
placement of respondent Arrastia’s land under the CARP since
her property’s land area falls below the retention limit of five (5)
hectares.

PETITIONS for review on certiorari of the decision and

resolution of the Court of Appeals.

The facts are stated in the opinion of the Court.

     Anselmo M. Carlos for petitioner in G.R. No. 132759.
          Ida R. Makalinao-Javier and Mylene T. Marcia-
Creencia for private respondent.

TINGA, J.:

This deals with two separate Rule 45 petitions, later

consolidated, filed by the Department of Agrarian Reform
Adjudication Board (“DARAB”) and Alfredo Danan, et al.
Both petitions seek the reversal of the Court of Appeals’
Decision in CA-G.R. SP No. 33796, which reversed and set
aside the DARAB Decision in DARAB Case

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Danan vs. Court of Appeals

No. 1551 and its Resolution denying petitioners’ motion for

reconsideration.
Petitioners (“private petitioners”) in G.R. No. 132759 are
all residents of Lubao, Pampanga, claiming to be
cultivating a vast landholding owned by the heirs of
Teodorica Reinares Arrastia, Leticia Arrastia Montenegro
and Juanita Arrastia (“Arrastia heirs”). Said property has
an aggregate area of approximately three hundred (300)
hectares and is situated at the Barangays of Lourdes,
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Baruya, and San Isidro, all within the Municipality of

Lubao, Pampanga. The records of the case show that the
landholding had been subdivided and distributed among
the Arrastia heirs and the corresponding certificates of
titles issued accordingly.
Petitioner in G.R. No. 132866 is the DARAB, the
adjudication arm of the Department of Agrarian Reform
(“DAR”) that is tasked to implement the government’s
comprehensive agrarian reform program (“CARP”).
The common respondent in both petitions is Estrella
Arrastia, one of the Arrastia heirs and a co-owner of the
disputed property. Respondent Arrastia own 4.4630
hectares of the disputed property.
The factual antecedents are as follows:
Sometime in 1976, a certain Rustico Coronel leased the
subject property for a period of1
twelve (12) years or until
the crop year 1987 to 1988. On September 27, 1986,
persons claiming to be farmers and residents of Barangay
Lourdes and Barangay San Rafael signed a joint resolution
as members of the Aniban ng mga Manggagawa sa
Agrikultura (“AMA”) to enter and lease the subject
property from the Arrastia heirs. Then Pampanga
Governor Brien Guiao favorably endorsed the resolution to
then Minister of Environment and Natural Resources
Heherson Alvarez. On the basis of said resolution but
without the consent of the landowners, the AMA members,
who are herein petitioners, entered the disputed land,
cleared portions thereof and planted various crops thereon.
This culminated in a violent confrontation on May 21,

_______________

1 CA Decision, p. 5; G.R. No. 132866, Rollo, p. 40.

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1988 that 2led to the filing of criminal charges against AMA

members.
On June 2, 1988, the AMA filed a complaint with
petitioner DARAB, docketed as DARAB Case No. 0001,
praying that respondent Arrastia be prevented from
destroying standing crops on the disputed property and
from fencing said property and that petitioners be allowed
to continue with their farming thereon. On August 15,
1988, the DARAB ordered the DAR Regional Director to
3
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3
conduct an ocular inspection on the disputed property. The
inspection team submitted an Ocular/Investigation Report
with the observation that there were no substantially
significant plantings on the disputed property. The
Municipal Agrarian Reform Officer (“MARO”) of Lubao,
Pampanga also submitted a report dated September 21,
1989, recommending the disqualification of private 4
petitioners from availing of the benefits under the CARP.
On October 5, 1988, the DARAB issued an order denying
AMA’s motion for authority to cultivate. The order became
final and executory on July 29, 1989, after5
the DARAB
denied AMA’s motion for reconsideration.
On behalf of her co-heirs and co-owners, Arrastia
instituted an action against private petitioners for violation
of Section 73(b) of Republic Act (R.A.) No. 6657 on October
9, 1989. Arrastia’s complaint, docketed as Agrarian Case
No. 2000, was raffled to Branch 48 of the Regional Trial
Court of San Fernando, Pampanga on October 9, 1989. The
trial court, sitting as a special agrarian court (“SAC”),
issued a temporary restraining order, and subsequently a
preliminary injunction, both enjoining private petitioners
from entering and cultivating the disputed property.
On November 29, 1989, private petitioners filed a
complaint for injunction and damages before the Provincial
Agrarian Reform Adjudication Board (“PARAD”) against
Arrastia, alleging that they

_______________

2 CA Decision, p. 6; id., at p. 41.

3 Ibid.
4 CA Decision, p. 7; id., at p. 42.
5 Ibid.

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Danan vs. Court of Appeals

were actual tillers of the disputed property who were

forcibly evicted by Arrastia from their tenanted lots
through the use of armed men. In their complaint, docketed
as DARAB Regional Case No. 161-P’ 89, they prayed that
Arrastia be restrained from preventing them from
reoccupying the property in question. Upon referral of the
matter to the respective Barangay Agrarian Reform
Committees (“BARC”) of the Barangays of Lourdes, San
Isidro, and San Rafael, BARC officials reported that the
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dispute could no longer be settled amicably. In particular,

the BARC of Barangay San Rafael (Baruya), Lubao
informed the hearing officer that private petitioners were
tenants or actual tillers of the disputed property. The
Lubao MARO6
also submitted the reports of other BARC
officials.
On the basis of the reports submitted by BARC officials
and private petitioners’ affidavits, the hearing officer
issued on December 9, 1990 an order granting a
preliminary injunction to restrain Arrastia from disturbing
private petitioners in the tilling of the disputed property.
The PARAD hearing officer also directed the MARO to act
on the petition for
7
the coverage of the disputed property
under the CARP.
Meanwhile, on January 30, 1991, Arrastia filed an
omnibus motion in DARAB Case No. 0001, questioning the
jurisdiction of the hearing officer to issue an order of
injunction. The DARAB denied said motion and
subsequently issued the writ of injunction on September
22, 1992.
Arrastia filed an answer in DARAB Regional Case No.
161-P’ 89, interposing the defense that the disputed land
was not devoted to agriculture and that private petitioners
were not tenants thereof.
After due hearing, the PARAD rendered a decision in
DARAB Regional Case No. 161-P’ 89 on May 13, 1993,
declaring that the subject property is covered by the CARP
and that private petitioners are qualified beneficiaries of
the program. The adjudicator also issued an injunction
prohibiting Arrastia from disturbing private

_______________

6 PARAD Decision, p. 3; G.R. No. 132759, Rollo, p. 68.

7 PARAD Decision, p. 4; id., at p. 69.

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petitioners’ occupation of the property. The dispositive

portion of the decision reads:

“WHEREFORE, PREMISES CONSIDERED, this Board hereby

renders judgment:

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(1) Confirming and declaring that the subject landholding

with an area of 300 hectares, more or less, situated at
Barangays Lourdes, San Isidro and San Rafael (Baruya),
Lubao, Pampanga, owned by the defendant and her co-
owners are agricultural land subject to the coverage of RA
No. 6657, and that plaintiffs are qualified beneficiaries
who enjoy the benefits of agrarian laws including the right
to an award of the lands they actually till in accordance
with the procedure therein;
(2) Making the preliminary injunction hereto forthwith
issued, prohibiting the defendant and her co-owners and
all other persons claiming any right or title under them,
from continuing to exclude plaintiffs and from re-entry
and re-occupation of the subject landholding as
agricultural tenants and their restoration thereat, final
and permanent; and
(3) Ordering the defendant and her co-owners to pay
plaintiffs
8
the amount of P10,000.00 as attorney’s fees, plus
costs.”

Arrastia appealed the aforementioned decision to petitioner

DARAB. The appeal was docketed as DARAB Case No.
1551. On March 28, 1994, the DARAB rendered its decision
modifying the appealed judgment, the dispositive portion of
which reads:

“WHEREFORE, premises considered, the appeal is DISMISSED.

The judgment of the Provincial Adjudicator is hereby modified as
follows:

1. Declaring Dominador Flores, Rodrigo Serrano, Oscar

Salazar, Alejandro Danan, Tirso Lingad, Francisco Santos,
Dante Danan, Jesus Castro, Amado Escueta, Marcos Susi,
Francisco Bernate, Felix Escueta, Ladislao Danan,
Lamberto Danan, Carlito Santos, Orlando Santos, Jose
Manansala, Eulalio Danan, Eddie Escueta, Conrado
Castro, Pedro Tala and Victorino Tala to be agricultural
lessees on their respective tillages, and ordering their
reinstatement on the land;
2. Ordering the rest of the Plaintiffs-Appellees to be
reinstated on the land and to possess and occupy their
respective areas of cultivation;

_______________

8 PARAD Decision, p. 17; id., at p. 82.

121

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Danan vs. Court of Appeals

3. Ordering the Regional Director of the Department of

Agrarian Reform, Region III, San Fernando, Pampanga,
the Provincial Agrarian Reform Officer for the Province of
Pampanga and the Municipal Reform Officer for the
Municipality of Lubao, Province of Pampanga to
immediately undertake administrative processes for the
coverage of the land under Republic Act No. 6657 and
other applicable agrarian laws, DAR Administrative
Order No. 1, Series of 1993, DAR Department
Memorandum Circular No. 04, Series of 1993 and other
DAR rules and regulations taking into consideration the
qualifications of Appellees to be beneficiaries of the
program as well as the right of retention of the owners of
the subject landholding and the last paragraph of Section
6, Republic Act No. 6657 which provides:

Upon the effectivity of this Act, any sale, disposition, lease, management
contract or transfer of possession of private lands executed by the
original landowner in violation of this Act shall be null and void;
Provided, however, That those executed prior to this Act shall be valid
only when registered with the Register of Deeds within the period of
three (3) months after the effectivity of this Act. Thereafter, all Register
of Deeds shall inform the DAR within thirty (30) days of any transaction
involving agricultural lands in excess of five (5) hectares.

4. Ordering Defendant-Appellant, or any person or persons

acting for and in behalf, to refrain from committing any
act or acts which will disturb or in any way adversely
interfere with the peaceful possession, occupation and
farming activities of Appellees on the land itself;
5. Ordering Defendant-Appellant to pay Plaintiff-Appellees
the reasonable amount of Twenty Thousand Pesos
(P20,000.00) as attorney’s fees plus costs of the suit; and
6. Ordering the Regional Sheriff of the DAR Regional
Adjudication Board, Region III, to implement this Order
and submit a return to this Board within seven (7) days
from receipt of this Order. This decision is immediately
executory
9
pursuant to Section 50 of Republic Act No.
6657.”

Aggrieved, Arrastia elevated the controversy to the Court

of Appeals, which reversed and set aside the decision of the
DARAB.

_______________
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9 DARAB Decision, p. 30; id., at pp. 114-115.

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On the issue of whether private petitioners are qualified

beneficiaries under the CARP, the appellate court ruled in
the negative mainly on the basis of the report of MARO
Josefina Vidal which was quoted at length in its Decision.
In the said report, the MARO recommended the
disqualification of private petitioners from the coverage of
the CARP in view of their continued violation of Sections
22 and 23 of Executive Order No. 229, under which
persons, associations, or entities which prematurely enter
lands covered by agrarian reform shall be permanently
disqualified from CARP coverage and cited for contempt,
respectively. The Court of Appeals also found private
petitioners guilty of violating the temporary restraining
order and preliminary injunction issued by the SAC in
Agrarian Case No. 2000 and also the temporary restraining
issued by the Court of Appeals itself on April 13, 1994. The
appeals court denied the motions for reconsideration
separately filed by private petitioners. Hence, the petitions
before this Court.
In its petition, DARAB raised the following issues:

1.1. THE HONORABLE COURT OF APPEALS ERRED

WHEN IT SET ASIDE THE ENTIRETY OF THE
DECISION APPEALED FROM, TO INCLUDE
THE ORDER TO PLACE THE DISPUTED
LANDHOLDINGS UNDER CARP COVERAGE,
ON THE SOLE BASIS OF THE FINDING THAT
PRIVATE RESPONDENTS (FARMERS) THEREIN
WERE DISQUALIFIED AS FARMER
BENEFICIARIES;
1.2. THE HONORABLE COURT OF APPEALS ERRED
WHEN IT RULED ON THE DISQUALIFICATION
OF ALL THE FARMERS (PRIVATE
RESPONDENTS THEREIN), IRRESPECTIVE OF
WHETHER THEY (OR SOME) ARE
AGRICULTURAL TENANTS OR NOT, ON THE
SOLE BASIS OF A FIELD REPORT THAT WAS
PREPARED AND SUBMITTED WITHOUT THE
FARMERS AT LEAST GIVEN OPPORTUNITY TO
BE HEARD,
10
THUS, VIOLATIVE OF DUE
PROCESS.
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In turn, private petitioners in their petition impute the

following errors to the Court of Appeals:

_______________

10 Id., at p. 37.

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Danan vs. Court of Appeals

1. RESPONDENT COURT GRAVELY ERRED IN

NOT GIVING FIRST DUE COURSE TO THE
PETITION IN CA-G.R. NO. 33796 AND
REQUIRED THE DARAB TO ELEVATE TO IT
THE RECORDS OF DARAB CASE NO. 1551
INCLUDING ALL THE EVIDENCE PRESENTED
SO IT COULD HAVE FULLY APPRECIATED ALL
THE FACTS INSTEAD OF MERELY RELYING
ON THE PLEADINGS FILED BEFORE IT.
2. THE RESPONDENT COURT GRAVELY ERRED
IN IGNORING FUNDAMENTAL RULES OF
ADMINISTRATIVE DUE PROCESS BY ITS
FAILURE AND REFUSAL TO CONSIDER
SUBSTANTIVE EVIDENCE INTRODUCED BY
PETITIONERS IN THE PROCEEDINGS IN
DARAB CASE NO. 161-P’89 AND DARAB CASE
NO. 1551 RESULTING IN FINDINGS WHICH
ARE NOT ONLY CONTRARY TO LAW AND THE
EVIDENCE ON RECORD BUT ARE FURTHER
PATENTLY PARTIAL TO PRIVATE
RESPONDENTS.
3. THE RESPONDENT COURT GRAVELY ERRED
IN MAKING CONCLUSIONS FROM ITS REVIEW
OF THE DARAB DECISION IN DARAB CASE NO.
1551 WITHOUT ANY BASIS ON THE DECISION
ITSELF THUS CITING ERRORS IN THE SAID
DECISION WHICH WERE NOT ACTUALLY
MADE BY THE DARAB.
4. THE RESPONDENT COURT GRAVELY ERRED
IN REVERSING THE FINDINGS OF FACTS OF
THE DARAB WITHOUT DUE REGARD TO
EVIDENCE11
PRESENTED BEFORE THE
LATTER.

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The two petitions advance two main arguments: first, the

Court of Appeals’ finding that private petitioners are
ineligible to become CARP beneficiaries is without factual
or evidentiary basis; second, the Court of Appeals’ reversal
of the DARAB’s order to undertake administrative
proceedings for the acquisition of the subject property for
agrarian reform purposes is premature.
Private petitioners contend that the Court of Appeals’
declaration that they are not qualified beneficiaries of the
CARP has no evidentiary basis because it failed to order
the transmittal of the DARAB records, particularly the
reports of the different BARC officials establishing tenancy
relationship between private petitioners and the owners of
the disputed property. For its part, DA-

_______________

11 G.R. No. 132866, Rollo, p. 20.

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Danan vs. Court of Appeals

RAB denies having categorically declared in its decision in

DARAB Case No. 1551 that private petitioners are
qualified beneficiaries because the administrative
proceeding to determine the beneficiaries entitled under
R.A. No. 6657 was yet to be undertaken not by DARAB but
by the administrative officials of DAR. DARAB also
describes as arbitrary and unilateral the MARO report
quoted by the appellate court in support of its ruling that
private petitioners prematurely entered the disputed
property.
The resolution of the issue on private petitioners’
eligibility under the CARP calls for a review of the evidence
on record to determine whether or not the conclusion of the
Court of Appeals has factual basis. At the outset, it should
be noted that the jurisdiction of this Court in a petition for
review on certiorari under Rule 45 of the Rules of Court is
limited to reviewing only errors of law, as it is not a trier of
facts. It is a settled doctrine that findings of fact of the
Court of Appeals are binding and conclusive upon this
Court, not to be disturbed unless: (1) the conclusion is a
finding grounded entirely on speculation, surmise and
conjecture; (2) the inference made is manifestly mistaken;
(3) there is grave abuse of discretion; (4) the judgment is
based on a misapprehension of facts; (5) the findings of fact
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are conflicting; (6) the Court of Appeals went beyond the

issues of the case and its findings are contrary to the
admissions of both appellant and appellees; (7) the findings
of fact of the Court of Appeals are contrary to those of the
trial court; (8) said findings of fact are conclusions without
citation of specific evidence on which they are based; (9) the
facts set forth in the petition as well as in the petitioner’s
main and reply briefs are not disputed by the respondents;
and (10) the findings of fact of the Court of Appeals are
premised on the supposed absence12 of evidence and
contradicted by the evidence on record.
The DARAB and the Court of Appeals’ findings in
respect to the status of private petitioners are conflicting.
The DARAB found that private petitioners are either
agricultural lessees paying rentals to

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12 Baricuatro, Jr. v. Court of Appeals, 382 Phil. 15; 325 SCRA 137
(2000).

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Danan vs. Court of Appeals

the landowners or actual tillers in possession of distinct

portions of the subject property. The Court of Appeals,
however, found private petitioners as not qualified to
become CARP beneficiaries on account of certain violations
they committed and considered it unnecessary to ascertain
their status as agricultural lessees or tillers. In view of the
divergent opinions, the Court must review the evidence
relied upon by the DARAB and the Court of Appeals in
arriving at their respective conclusions.
The Court affirms factual findings and conclusions of the
Court of Appeals.
The appellate court’s conclusion that private petitioners
committed particular violations warranting their
disqualification from the CARP is based on the MARO
report which has not been disputed by all the private
petitioners. The MARO who prepared the report enjoys the
presumption of regularity in the performance of her
functions. Absent any showing that the Court of Appeals
committed grave abuse of discretion in giving evidentiary
weight to said report, said factual findings are generally
deemed13
conclusive on this Court, which is not a trier of
facts.
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Anent DARAB’s contention that the MARO report was

made unilaterally and without giving private petitioners
the opportunity to be heard, the circumstances not nullify
said report for lack of due process. The essence of due
process is simply an opportunity to be heard or, as applied
to administrative proceedings, an opportunity to explain
one’s side or an opportunity to14seek reconsideration of the
action or ruling complained of. Private petitioners cannot
claim denial of due process simply because they had ample
opportunity to rebut the MARO’s findings and present
contrary evidence in the proceedings before the PARAD,
the DARAB, or the Court of Appeals.

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13 Alipat v. Court of Appeals, et al., 368 Phil. 264; 308 SCRA 781 (1999).
14 CMP Federal Security Agency v. National Labor Relations
Commission, et al., 362 Phil. 439; 303 SCRA 99 (1999).

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Danan vs. Court of Appeals

Private petitioners insist that they are bona fide

agricultural tenants of the disputed property. It is
unnecessary to pass upon this issue in the light of the
categorical finding of the appellate court that private
petitioners are no longer entitled to avail of the benefits
under the CARP. In any event, however, the claim is not
well-founded.
A perusal of the decision in DARAB Case No. 1551
reveals that DARAB classified two (2) sets of farmworkers,
i.e., those who cultivated the land and paid corresponding
rentals, and those who occupied and cultivated portions of
the disputed property since 1986 as certified by BARC
officials.
Mere occupation or cultivation of an agricultural land
does not automatically convert a tiller or farmworker into
an agricultural tenant recognized under agrarian laws. The
essential requisites of a tenancy relationship are: (1) the
parties are the landowner and the tenant; (2) the subject is
agricultural land; (3) there is consent among the parties;
(4) the purpose is agricultural production; (5) there is
personal cultivation; and (6) there is sharing of harvests.
All these requisites must concur in order 15
to create a
tenancy relationship between the parties. In the case at
bar, it has not been sufficiently established that private
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petitioners’ occupation and cultivation of the disputed

property was with the consent of the landowners.
DARAB assails the Court of Appeals in reversing the
DARAB decision in its entirety. It contends that the
determination of private petitioners’ eligibility under R.A.
No. 6657 has no bearing on its order to commence
administrative procedure for the acquisition of the disputed
property. 16
As borne by the case records, respondent Arrastia owns
only 4.4630 hectares of the subject property, which is below
the reten-

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15 Victorio v. Court of Appeals, G.R. No. 110012, March 28, 2001, 355
SCRA 520.
16 CA Rollo, p. 125.

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VOL. 474, OCTOBER 25, 2005 127

Danan vs. Court of Appeals
17
tion limit under Section 6 of R.A. No. 6657 granting a
right of

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17 SECTION 6. Retention Limits.—Except as otherwise provided in this

Act, no person may own or retain, directly or indirectly, any public or
private agricultural land, the size of which shall vary according to factors
governing a viable family-size farm, such as commodity produced, terrain,
infrastructure, and soil fertility as determined by the Presidential
Agrarian Reform Council (PARC) created hereunder, but in no case shall
retention by the landowner exceed five (5) hectares. Three (3) hectares
may be awarded to each child of the landowner, subject to the following
qualifications: (1) that he is at least fifteen (15) years of age; and (2) that
he is actually tilling the land or directly managing the farm: Provided,
That landowners whose lands have been covered by Presidential Decree
No. 27 shall be allowed to keep the areas originally retained by them
thereunder: Provided, further, That original homestead grantees or their
direct compulsory heirs who still own the original homestead at the time
of the approval of this Act shall retain the same areas as long as they
continue to cultivate said homestead.
The right to choose the area to be retained, which shall be compact or
contiguous, shall pertain to the landowner: Provided, however, That in
case the area selected for retention by the landowner is tenanted, the
tenant shall have the option to choose whether to remain therein or be a

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beneficiary in the same or another agricultural land with similar or

comparable features. In case the tenant chooses to remain in the retained
area, he shall be considered a leaseholder and shall lose his right to be a
beneficiary under this Act. In case the tenant chooses to be a beneficiary
in another agricultural land, he loses his right as a leaseholder to the land
retained by the landowner. The tenant must exercise this option within a
period of one (1) year from the time the landowner manifests his choice of
the area for retention.
In all cases, the security of tenure of the farmers or farmworkers on the
land prior to the approval of this Act shall be respected.
Upon the effectivity of this Act, any sale, disposition, lease,
management, contract or transfer of possession of private lands executed
by the original landowner in violation of the Act shall be null and void:
Provided, however, That those executed prior to this Act shall be valid
only when registered with the Register of Deeds within a period of three
(3) months after the effectivity of this Act. Thereafter, all Registers of
Deeds shall inform the Department of Agrarian Reform (DAR) within
thirty (30)

128

128 SUPREME COURT REPORTS ANNOTATED

Danan vs. Court of Appeals

retention of up to a maximum of five (5) hectares of

agricultural land in favor of a landowner whose property
may be acquired for distribution to agrarian reform
beneficiaries. Consequently, a landowner may keep his
entire covered landholding if its aggregate size does not
exceed the retention limit of five (5) hectares. His land will
not be covered at all by the operation land transfer
program although all requisites for coverage are present.
The right of retention is a constitutionally guaranteed
right, which is subject to qualification by the legislature. It
serves to mitigate the effects of compulsory land acquisition
by balancing the rights of the landowner and the tenant
and by implementing the doctrine that social justice was
not meant to perpetrate an injustice against the
landowner. A retained area, as its name denotes, is land
which is not supposed to anymore leave the landowner’s
dominion, thus sparing the government from the
inconvenience of taking land only to return it to the
landowner18
afterwards, which would be a pointless
process. For as long as the area to be retained is compact
or contiguous and does not exceed the retention ceiling of
five (5) hectares, a landowner’s choice of the area to be
retained must prevail. Moreover, Administrative Order No.
4, series of 1991, which supplies the details for the exercise
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of a land-owner’s retention rights, likewise recognizes no

limit to the prerogative of the landowner, although he is
persuaded 19to retain other lands instead to avoid dislocation
of farmers. Therefore, there is no legal and practical basis
to order the commencement of the administrative
proceedings for the placement of respondent Arrastia’s land
under the CARP since her property’s land area falls below
the retention limit of five (5) hectares.
WHEREFORE, both petitions in G.R No. 132759 and
G.R. No. 132866 are DENIED. The Decision of the Court of
Appeals in CA-G.R. SP No. 33796 is AFFIRMED. Costs
against private petitioners.

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days of any transaction involving agricultural lands in excess of five (5)

hectares.
18 Eudosia Daez and/or Her Heirs v. Court of Appeals, et al., 382 Phil.
742; 325 SCRA 856 (2000).
19 Ibid.

129

VOL. 474, OCTOBER 25, 2005 129

Ramatek Philippines, Inc. vs. De los Reyes

SO ORDERED.

          Puno (Chairman), Austria-Martinez and Callejo,

Sr., JJ., concur.
     Chico-Nazario, J.,On Leave.

Both petitions in G.R. No. 132759 and G.R. No. 132866

denied, judgment affirmed.

Notes.—Unless the requisite elements of tenancy

concur in order to create a tenancy relationship between
the parties, the Court cannot bring the matter within the
purview of tenancy under CARL. (Romero vs. Tan, 424
SCRA 108 [2004])
Elements of agrarian tenancy relationship are: (1) the
subject matter should be agricultural land; (2) the purpose
should be agricultural production; and (3) there should be
personal cultivation done by the tenants themselves.
(Romero vs. Tan, Ibid.)

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