March 11, 1997

DAR OPINION NO. 23-97

Atty. Leandricia M. Monsanto

Provincial Agrarian Reform Adjudicator

Carmen, Cagayan de Oro City

Dear PARAD Monsanto:

This has reference to your Memorandum dated 3 October 1996 addressed to Director of the Bureau of Agrarian Legal Assistance (BALA) seeking comment/clarification relative to the payment of disturbance compensation.

As gleaned from your Memorandum, the subject property has an aggregate area of more than 300 hectares and is owned by Capistrano Estate; that controversy arose as to the correct mathematical computation of disturbance compensation that landowners should pay to displaced tenants as a result of land use conversion; that landowners for their part espouse that they are not liable to pay disturbance compensation pursuant to Section 36 (1) of R.A. 3844 as they did not receive anything from the claimants for they are tiller-claimants of titled areas within the declared non-agricultural zone way back in 1979 by a City Zoning Ordinance; and that due to the development of the said area many speculators rushed to claim exhorbitant amount as disturbance compensation.

Please be informed that Section 7 of R.A. 6389 (An Act Amending R. A. 3844, As amended Otherwise Known As The Agricultural Land Reform Code And For Other Purpose) amended Section 36 (1) of R.A. 3844 relative to the payment of disturbance compensation. The amendment pertinently provides that "the agricultural lessee shall be entitled to disturbance compensation equivalent to five times the average of the gross harvests on his landholding during the last five preceding calendar years." The legal effect of such amendment is to abrogate or render Section 36 (1) of R.A. 3844 without force and effect. As Section 7 of R.A. 6389 amends Section 36 (1) of R.A. 3844 on disturbance compensation, the former should prevail being the later expression of the legislative will.

Moreover, as elucidated by the Supreme Court in the case of "Pagtalunan vs. Tamayo", 138 SCRA 252, Section 36 (1) of R.A. 3844, as amended, is applicable only when it is the owner/lessor who voluntarily opts for the conversion of his land into non-agricultural use. The said law clearly suggests that it is only in cases of land use conversion that displaced tenants are entitled to the payment of disturbance compensation. Such being the case, mere tillers within the declared non-agricultural zone does not ipso facto entitle them to the payment of disturbance compensation unless a land use conversion is taking place. The reason for this is the fact that reclassification is not synonymous with conversion under Section 65 of R.A. 6657 for while the authority to reclassify is lodged with the local government units, the authority to convert remains with the DAR. Again it is only in land use conversion that displaced tenants are entitled to disturbance compensation and not by a mere reclassification effected through an ordinance.

However, for reasons of equity and social justice it is suggested that the alleged tiller-claimants be paid some sort of relocation compensation. As to the amount to be paid the matter should be left to your better judgment taking into consideration whatever factors surround each claim.

Please be guided accordingly.

Very truly yours,

(SGD.) ARTEMIO A. ADASA, JR.

Undersecretary for Legal Affairs, and Policy and Planning

Copy furnished:

Dir. Rogelio E. Tamin, MNSA

Director IV, Regional Office 10

Department of Agrarian Reform

Macanhan, Carmen

Cagayan de Oro City

Engr. Felix B. Aguhob

OIC-PARO

Misamis Oriental

Vamenta Street, Carmen

Cagayan de Oro City