Diamond Farms v. Diamond Farm Workers Multi-Purpose Cooperative
REITERATIONFacts
The Antecedents: Petitioner Diamond Farms, Inc. (DFI) is a corporation engaged in commercial banana farming on a 1,023.8574-hectare land in Carmen, Davao. A significant portion, 958.8574 hectares, was initially deferred from Comprehensive Agrarian Reform Program (CARP) coverage. Later, this land was placed under CARP, with 698.8897 hectares awarded to members of the Diamond Agrarian Reform Beneficiaries Multi-Purpose Cooperative (DARBMUPCO). DFI retained management of 277.44 hectares, including a 109-hectare parcel. On November 23, 1999, DFI's titles to the 109-hectare land were cancelled and reissued in the name of the Republic of the Philippines. Subsequently, 278 CARP beneficiaries, many from respondent Diamond Farm Workers Multi-Purpose Cooperative (DFWMPC), were identified, and Certificates of Land Ownership Award (CLOAs) were issued in their favor on October 26, 2000. Procedural History: On July 2, 2002, DFI filed a complaint against the respondents for unlawful occupation and damages, alleging that respondents refused to work, forcibly occupied a 74-hectare portion of the 109-hectare land, and prevented harvesting. Respondents counterclaimed, asserting their rights as CARP beneficiaries and seeking production and profit shares. The Regional Agrarian Reform Adjudicator ruled in favor of the respondents, finding DFI unlawfully occupying the land and granting the counterclaims. The Department of Agrarian Reform Adjudication Board (DARAB) affirmed this decision, modifying the award of production and profit share. DFI appealed to the Court of Appeals (CA), which affirmed the DARAB decision but deleted the award of lease rentals. DFI's motion for partial reconsideration was denied, leading to the present appeal. The Petition: DFI petitions this Court, arguing that the CA erred in affirming the DARAB's decision by disregarding DFI's constitutional right to just compensation for the taking of its property and by considering its assertion of this right as a collateral attack on the Republic's title. DFI contends that it has not yet received just compensation for the land and therefore respondents cannot be considered lawful possessors. The core issues presented are whether respondents are guilty of unlawful occupation, whether DFI should turn over possession, and whether the award of production share and interest was proper. DFI seeks to be declared the lawful owner and possessor until actual receipt of just compensation.
Issue(s)
Whether respondents are guilty of unlawful occupation and liable to petitioner for damages and attorney's fees. Whether petitioner should turn over possession of the subject land to respondents and respect their possession thereof. Whether the award of production share and interest was proper.
Ruling
The petition is denied for lack of merit. The Decision dated December 17, 2009, and Resolution dated July 15, 2010, of the Court of Appeals in CA-G.R. SP No. 101384 are affirmed. The Department of Agrarian Reform and the Provincial Agrarian Reform Officer are directed to assist the Department of Agrarian Reform Adjudication Board in the distribution of the 109-hectare land to qualified agrarian reform beneficiaries, whether individuals or cooperatives.
Ratio Decidendi
On the issue of unlawful occupation and liability for damages: The Court held that respondents are not guilty of unlawful occupation. Respondents, as identified CARP beneficiaries in whose favor CLOAs were issued, were exercising their right to protect their legitimate possession. The Court cited Article 429 of the Civil Code, stating that a lawful possessor has the right to exclude others and may use reasonable force to repel unlawful invasion. Petitioner's attempt to install other workers on CARP-covered land after beneficiaries were identified and distribution was ordered was deemed an impermissible roadblock to CARP implementation. Furthermore, petitioner admitted that respondents allowed it to resume farm operations, indicating a normalization of relations and operations, thus negating claims of sustained unlawful occupation or significant damages. On the issue of turning over possession of the subject land: The Court affirmed the order for petitioner to turn over possession of the 109-hectare land. The Court reiterated that the transfer of possession and ownership to the government under Section 16(e) of the CARL is conditioned upon the landowner's receipt of just compensation or the deposit thereof. Petitioner's own argument that transfer is conditioned upon receipt of payment or deposit supports the conclusion that it lost possession and ownership when the condition was fulfilled. The issuance of CLOAs in 2000 to beneficiaries further evidenced their ownership. The Court emphasized that the Constitution and CARL intend for farmers to have control over agricultural lands, and the policy is that control must remain with the farmers. The DAR is mandated to redistribute the land to qualified beneficiaries and install them thereon. On the issue of the award of production share and interest: The Court found the contention that respondents are not entitled to production share to be without merit. The Court reiterated that respondents' possession was legitimate. Regarding petitioner's claim of losses, Section 32 of the CARL mandates that the 3% production share is based on gross sales, not net profit. Petitioner's own admission of weekly production worth P1.46 million and its deposit of P2.51 million as production share demonstrated the existence of sales and petitioner's recognition of respondents' right to such share. The Court noted that farm operations normalized within five days of the complaint's filing, contradicting claims of prolonged disruption. Therefore, the CA's affirmation of the DARAB's computation of respondents' production share based on the approved Production and Profit Sharing (PPS) Scheme was upheld.
Main Doctrine
The transfer of possession and ownership of land under the Comprehensive Agrarian Reform Program (CARP) is conditioned upon the landowner's receipt of just compensation or the deposit thereof by the Department of Agrarian Reform (DAR). Once this condition is fulfilled, the landowner loses possession and ownership, and the land must be redistributed to qualified beneficiaries.