July 15, 2015

G.R. No. 197127

NOEL L. ONG, OMAR ANTHONY L. ONG, and NORMAN L. ONG, Petitioners,

vs.
NICOLASA O. IMPERIAL, DARIO R. ECHALUCE, ROEL I. RO BELO, SERAFIN R. ROBELO,
EFREN R. ROBELO, RONILO S. AGNO, LORENA ROBELO, ROMEO O. IMPERIAL, NANILON
IMPERIAL CORTEZ, JOVEN IMPERIAL CORTEZ, and RODELIO O. IMPERIAL, Respondents.

DECISION

LEONARDO-DE CASTRO, J.:

Before the Court is a petition for review on certiorari under Rule 45 seeking to reverse, nullify, and
set aside the November 30, 2010 Decision and the May 11, 2011 Resolution  of the Court of
1 2

Appeals in CA-G.R. SP No. 93941.

The facts are as follows:

Petitioners Noel L. Ong, Omar Anthony L. Ong, and Norman L. Ong (petitioners) are registered
owners of a parcel of land with an area of Four Hundred Five Thousand Six Hundred Forty-Five
(405,645) square meters described under Transfer Certificate of Title (TCT) No. T-1 7045 located in
Barangay Dogongan, Daet, Camarines Norte (subject property).

The Municipal Agrarian Reform Officer (MARO) of Daet issued a Notice of Coverage to petitioners
on August 14, 1994.

Petitioners wrote a letter  dated April 26, 1995 "vehemently protesting/objecting" to the coverage of
3

the subject property under compulsory acquisition under Comprehensive Agrarian Reform Law
(CARL), for the following reasons:

1) The entire area of 40.5645 [hectares] had been used as grazing area for cattle and
carabao long before the passage of R.A. 6657, and is therefore, excluded from the coverage
of CARL;

2) After deducting the retention area of the individual landowners, the excess area of each is
only 8.5215 has.;

3) Considering that there are several bills pending in Congress to increase the retention area
of landowners, to cover lands below 20 hectares will result only in confusion and needless
paperwork should the retention area be increased in answer to the clamor of majority of
landowners.

MARO Jinny Glorioso sent a letter-reply  on May 31, 1995, stating that the petitioners had confirmed
4

that the entire 40.5645 hectares was actually being used for coconut production, so petitioners had
failed to comply with the requirement that the property must be actually, directly and exclusively
used for livestock, poultry, and swine-raising purposes. MARO Glorioso also wrote that the subject
property was covered by CARL because the retention area for landowners is five hectares, and the
excess area in this case is 8.5214 hectares; thus, it is covered.
On September 23, 1996, MARO Glorioso issued a Notice of Acquisition over the subject property. 5

Petitioners then filed an application for exemption clearance with the Department of Agrarian Reform
(DAR) Regional Office V on October 16, 1996, claiming that subject property had already been
reclassified as residential built-up area pursuant to the Town Plan and Zoning Ordinance of Daet
dated September 21, 1978 and Zoning Ordinance No. 04, series of 1980. Petitioners submitted the
following supporting documents:

1. Certified True Copy of TCT No. 17045;

2. Location Map;

3. Certification dated 9 October 1996 issued by [Deputized Zoning Administrator (DZA)]

Jesus L. Hernandez, Jr. stating that the subject landholding is within the residential built-up
area per Zoning Ordinance No. 4, series of 1980;

4. Certification dated 9 December 1996 issued by Jesus A. Obligacion, Regional Director of

Housing and Land Use Regulatory Board (HLURB), Region V, stating that the Town Plan
and Zoning Ordinance of Daet, Camarines Norte was approved by then Human Settlements
Regulatory Commission now HLURB on 21 September 1978;

5. Certification dated 14 October 1996 issued by Antonio A. Avila, Jr. of the National
Irrigation Administration (NIA) of Daet, Camarines Norte stating that the subject land is not
covered by an existing irrigation system [or] by [an] irrigation project with firm funding
commitment; and

6. Certification dated 5 March 1997 issued by [MARO] Jinny P. Glorioso stating that the land
covered by TCT No. 17045 [was] tenanted and a Notice of Coverage/Acquisition [had] been
issued on 17 August 1996. 6

DAR Region V Director Percival C. Dalugdug sent a letter  dated June 5, 1997 to Deputized Zoning
7

Administrator Fernandez, which reads in part:

Please be informed that subject property has already been covered by the CARP under the
[Compulsory] Acquisition scheme, because we believe that the land is agricultural and not
otherwise. x x x.

xxxx

In order to rectify these conflicting claims may we request from your good office for a revalidation
and verification of the exact location of the above-mentioned landholding as far as its zoning location
is concerned according to the Official Land Use Plan of Daet, for the proper guidance of this office in
the issuance of requested DAR Exemption Clearance. x x x. (Emphasis ours.)

Deputized Zoning Administrator Fernandez replied to the DAR Director’s request for revalidation and
verification of the exact location of the subject property in the following manner:

Please be informed that there is no conflict between the official land use map of 1978 and the
certification issued by our Office. Please note that what is reflected in the aforesaid town plan
is the actual use of properties in Daet as of 1978, while our Certification states that the
property under TCT T-17045 is within the RESIDENTIAL BUILTUP AREA. x x x.
 xxxx

The projected increase of 278.465 hectares is the Built-Up Area for residential purposes, to which
the property in question is classified.  Please be informed further that in classifying Built-Up areas,
1âwphi1

we give priority to properties in the center or poblacion of barangays connected to provincial or

national roads, more so if the adjacent properties are already being used and classified as
residential as of 1978. Please note that in the land use map of 1978, the area directly in front of
the property in question, as well as the property in the eastern portion are already classified
as residential areas. We took into consideration also the fact that the Barangay Hall Day Care and
Health Center of the Barangay are located in this area.

We hope that all the above explanation clears the issue on the supposed conflicting claims,
and we see no reason to rectify our Certification dated October 9, 1996 regarding the
property under TCT No. T-17045-C.N.  (Emphases added.)
8

The DAR Regional Center for Land Use Policy, Planning and Implementation (RCLUPPI) V
conducted an investigation and in its report, wrote the following as established facts:

a) Subject landholdings are planted with coconuts and predominantly agricultural in nature;

b) Said lands are tenanted by Nicolasa Vda. De Imperial, Efren Rodelo and Julio Jamite;

c) The landowner executed a Deed of Undertaking to pay disturbance compensation to

affected tenants;

d) The area has been reclassified as residential prior to 15 June 1988;

e) The area applied for conversion has not been placed under the coverage of P.D. 27 but a
Notice of Coverage under R.A. 6657 had been issued on 17 August 1994 by MARO Jinny P.
Glorioso; and

f) The area is not irrigated nor scheduled for irrigation rehabilitation nor irrigable (sic) with
firm funding commitment.  (Emphasis ours.)
9

Based on their findings, the DAR RCLUPPI V investigating team recommended the denial of
petitioners’ application for exemption. DAR Region V Director Dalugdug in his 2nd Indorsement to
the DAR Secretary dated September 30, 1997, wrote:

This Office, after a careful evaluation of the records of the application, concurs with the
findings and recommendations of the RCLUPPI V [Investigation] team for the denial of the
application on the ground that the subject property has been [placed] under compulsory
coverage and a Notice of Acquisition was already issued by the MARO of Daet, Camarines
Norte. Moreover, the contention/justification of the Deputized Zoning Administrator when he was
requested to explain why the properties are in the green [colorcoded] in the land use map as stated
in his July 7, 1997 letter cannot be given credence by this Office. This is due to the fact that we
believe that the built-up area for residential areas provided in the right hand portion of the
map (from 258 to 556 has.) or another 258 has. between 1978 and 1982) has long been
exhausted. If one will take note, the present residential area of Daet is well beyond the 556 has.
limit set for 1982. The Ong property, [therefore], can no longer find any room in the built-up
area under the 1978 land use plan.  (Emphases ours.)
10
Upholding the findings of the Regional Office, then DAR Secretary Horacio R. Morales, Jr. issued an
Order  dated February 2, 2000 denying petitioners’ Application for Exemption under DOJ Opinion
11

No. 44, series of 1990, and directing the Director of DAR Region V "to proceed with the acquisition
of the subject landholding in accordance with existing agrarian laws." Secretary Morales’s Order
contained the following discussion, which we quote:

First, the justification made by Jesus L. Fernandez, Jr., Deputized Zoning Administrator of
Daet, Camarines Norte, in his letter dated 7 July 1997, is not sufficient to prove that the
subject land is classified as built-up area for residential purposes. It is true that the said
agency is the proper forum to certify as to the classification of a parcel of land within their
jurisdiction. However, the same must be supported by substantial evidence. The findings of
the Regional Director reveal that the built-up area for residential purposes provided in the
right hand portion of the Official Land Use Plan of 1978 of the Municipality of Daet has long
been exhausted. Thus, the present residential area of Daet is well beyond the 556-hectare limit set
for 1982. Therefore, the subject landholding cannot be considered as part of the built-up area
reserved for residential purposes. The subject landholding remains agricultural based on the original
land use plan in 1978. Being an agricultural land, the subject landholding is within the ambit of RA
6657.

Second, Administrative Order No. 6, Series of 1994, requires that any application for exemption
should be accompanied by a Certification from the Housing and Land Use Regulatory Board
(HLURB) that the pertinent zoning ordinance has been approved by the Board prior to 15 June 1988.
In the case at hand, the original land use plan in 1978 shows that the subject landholding was
agricultural in nature. The Deputy Zoning Administrator claims that the subject landholdings became
part of the residential built-up area by virtue of an authority indicated in the right hand portion of the
land use plan to extend the residential area from 258 hectares in 1980 to 556 hectares in 1982.
However, it is not shown that the 1982 land use plan had been similarly approved by the
HLURB. No proof has ever been presented that the 1982 land use plan had been approved by
the HLURB. Since coverage is the general rule, applicant has the burden of proof that subject
property is exempt.

Acting on petitioners’ Motion for Reconsideration,  then DAR Secretary Hernani A. Braganza issued
12

an Order  on June 20, 2002 stating that the opinion of the Deputized Zoning Administrator had
13

insufficient basis and could not prevail over the clear findings of the DAR Regional Director.

Meanwhile, TCT No. T-4202-A (Certificate of Land Ownership Award No. 00538736)  was issued to
14

"Nicolasa Imperial, et al." Covering 253,263 square meters in Barangay Dogongan, Municipality of
Daet, Province of Camarines Norte on October 27, 2000. Petitioners appealed the DAR Orders
dated February 2, 2000 and June 20, 2002 (the questioned DAR Orders) to the Office of the
President for review.

The records from the Office of the President contained a copy of a document entitled Memorandum
for the Executive Secretary from DESLA Manuel G. Gaite, Subject: Appeal of Noel Ong in O.P. Case
No. 04-L-500 dated July 29, 2005 and we note the following portion of said memorandum:

The DZA has positively declared that the subject property is within the reclassified built-up
residential areas of the municipality. As far as the coverage of the Municipal Ordinance is
concerned, the DZA should have the last say, since it is within its mandate to determine the
coverage of the zoning ordinance and therefore has exclusive jurisdiction as far as the issue is
concerned. Verification likewise of the records show (Rec. p. 12) that the application is accompanied
by a corresponding certification of HLURB Region No. 5, Regional Director, Jesse A. Obligacion that
the pertinent Municipal Ordinance No. 4 of Daet, Camarines Norte, has been approved by the
HLURB on September 21, 1978, prior to June 15, 1988, the effectivity of the CARP law. 15

The Office of the President rendered its Decision  on September 5, 2005 signed by Executive
16

Secretary Eduardo Ermita. The Office of the President declared that the main issue was whether or
not the subject property had been reclassified as residential so as to exempt it from Comprehensive
Agrarian Report Program (CARP) coverage. The Office of the President found that "[a] closer
scrutiny of the facts will reveal that the DAR Secretary concurred with the findings of the DAR
Regional Director, who in turn relied on his own belief that the land is agricultural and not
otherwise." The Office of the President reversed and set aside the questioned DAR Orders and
approved petitioners’ application for clearance, "exempting from CARP coverage the 40.5 hectares
property with TCT No. T-17045, situated in Barangay Dogongan, Daet, Camarines Norte."

We quote below relevant portions of the September 5, 2005 Decision of the Office of the President:

A careful reading of the map would show that what the DAR Secretaries referred to as having been
fully exhausted/allocated, are those actual and original residential areas of the municipality totaling
278.465 hectares, as indicated in colored map. It does not refer to those additional built-up
residential areas of the Municipality covered by the Ordinance in the total area of 556.93 hectares
pointed out by DZA, which includes the property in question.

Thus, as between the findings of the DAR Regional Director and the DZA, we must favor the
expertise of the latter. The determination and classification of land areas within their
jurisdiction is rightfully vested in the local government unit concerned, in this case, the
Deputy Zoning Administrator of Daet, as approved through municipal ordinance.

Under the foregoing circumstances, the denial of the exemption on the ground that the MARO has
already issued a NOTICE OF ACQUISITION in 1994 is flawed. The area having already been
reclassified as residential prior to June 1988 (as established by the DAR RCLUPPI V), it cannot be
the subject of a Notice of Acquisition which covers only agricultural lands. Perforce, the Notice of
Acquisition over the subject property is void ab initio.

Finally, the ruling of the DAR Secretary that the application for exemption was belatedly filed in order
to defeat CARP coverage of the property is untenable.  What invalidated CARP coverage over the
1âwphi1

subject property is not the application for exemption, but the fact the land in question not being
anymore agricultural, is beyond the coverage of CARP, pursuant to Section 4 of R.A. 6657 (Natalia
Realty vs. Department of Agrarian Reform, supra). 17

In a subsequent Order  dated March 3, 2006, the Office of the President resolved the Verified
18

Motion for Intervention with Motion for Reconsideration (of the September 5, 2005 Decision of the
Office of the President) filed by Nicolasa O. Imperial, Dario R. Echaluce, Roel I. Robelo, Serafin R.
Robelo, Efren R. Robelo, Ronilo S. Agno, Lorena Robelo, Romeo O. Imperial, Nanilon I. Cortez,
Joven I. Cortez, and Rodelio O. Imperial (respondents), who raised the following as grounds for
reconsideration:

1. The Decision violates their constitutional rights to due process;

2. The opinion of the Municipal Deputy Zoning Administrator (DZA) of Daet cannot prevail
over the expert opinion of the Department of Land Reform on the matter;
 3. The application for exemption by the applicants-appellants was a mere afterthought
intended merely to defeat the CARP coverage; and

4. There is no proof that prior to the alleged reclassification of the subject land, a public
hearing was conducted and the required percentage of the total agricultural land area at the
time of the passage of the ordinance was considered.

The Office of the President denied the Motion for Intervention and Reconsideration and reaffirmed its
earlier Decision, reasoning as follows:

While it is true that movants were not made parties to the case, this was so because applicants
Ong, et al. filed their application for exemption from CARP coverage pursuant to DOJ Opinion
No. 44, Series of 1990, as implemented by DAR Administrative Order No. 06, Series of 1994.
The application for exemption was premised on the doctrine (as affirmed by DOJ Opinion No.
44) that a land already converted to residential prior to June 15, 1988 cannot be the subject of
a Notice of Acquisition since the subject land, being residential and not agricultural, is
already beyond the coverage of CARP. (Natalia Realty vs. DAR, 225 SCRA 278) Hence, the
application was not adversarial against any other parties, but personal to the landowner-
petitioner.

Nevertheless, the implementation of DAR A.O. No. 6, series of 1994, puts in place a process of
application and notice so that all parties concerned are fully aware of the pending application for
exemption clearance.

Upon receipt of an application for exemption pursuant to DOJ Opinion No. 44, the DAR Regional
Center for Land Use, Policy, Planning and Implementation (RCLUPPI) field unit conducts an ocular
inspection. In that inspection, the field unit interviews and informs the tenants/farmers if any, that
such an application is pending.

Further, the RCLUPPI unit files a detailed report, indicating therein the number of farmer-
beneficiaries affected and whether or not a Deed of Undertaking was executed by the landowner to
pay disturbance compensation to affected tenants. In this case, appellants Ong et al. executed a
Deed of Undertaking dated January 11, 1997, in favor of tenants Nicolasa vda. De Imperial, Efren
Robelo and Julio Jamito. The RCLUPPI Region V also reported that there were only three tenants at
the time of the inspection. Hence, the rest of the intervenors-movants herein are either children or
relatives of the above-named three tenants of the Ong family.

It is therefore incorrect to say that movants-intervenors were totally unaware of the

proceedings until they received the questioned Decision on September 26, 2005. Thus, we
hold that there was reasonable opportunity to intervene since the application was filed in
1996. During this period, the proceedings were elevated from the Regional to Department level, and
finally on appeal to this Office.  (Emphases added, citation omitted.)
19

Unsatisfied, respondents filed a petition for review with the Court of Appeals under Rule 43 seeking
to nullify and set aside the Decision dated September 5, 2005 and the Order dated March 3, 2006,
both of the Office of the President. This was docketed as CA-G.R. SP. No. 93941.

RULING OF THE COURT OF APPEALS

In its November 30, 2010 Decision, the Court of Appeals ruled "that the Office of the President
committed reversible error in reversing the Orders of the DAR Secretaries and in approving
[petitioners’] Application for Exemption of their property from the CARP." The Court of Appeals
ratiocinated as follows:

While WE agree with the Office of the President that lands which have been reclassified as
residential prior to June 15, 1988 [cannot] be the subject of compulsory acquisition by the DAR for its
agrarian reform program, WE are not inclined to sustain its ruling approving the application for
clearance of respondents exempting from CARP coverage the subject landholding because of
respondents’ failure to comply with the requirements for such exemption.

A careful scrutiny of the record of this case reveals that the Office of the President failed to
judiciously examine the supporting documents submitted by respondents in their application for
exemption.

xxxx

As can be gleaned from [DAR Administrative Order No. 6, series of 1994, or the "Guidelines for the
Issuance of Exemption Clearances based on Sec. 3(c) of RA 6657 and the Department of Justice
(DOJ) Opinion No. 44, Series of 1990"], an application for exemption from the coverage of the CARP
must be accompanied by a certification from the HLURB that the pertinent zoning ordinance has
been approved by the Board prior to June 15, 1988 (the date of effectivity of the CARL). In the
instant case, respondents did file an accompanying Certification from the HLURB. However,
a meticulous perusal of the Certification issued by the HLURB as compared with the one
issued by the Deputized Zoning Ordinance shows glaring inconsistencies which cast doubt
as to the land use classification of respondents’ landholding. x x x.

xxxx

The glaring inconsistency and discrepancy in the foregoing certifications are readily apparent.
According to the Deputized Zoning Administrator of Daet, Camarines Norte, the Zoning Ordinance
reclassifying the landholding of respondents into residential land was passed in 1980, however, in
the Certification of the HLURB the said "Town Plan and Zoning Ordinance of Daet, Camarines Norte
was approved by the Housing and Land Regulatory Board, then Human Settlements Regulatory
Commission on September 21, 1978." Obviously, the approved Zoning Ordinance being referred to
in the Certification of the HLURB was not Zoning Ordinance No. 4, Series of 1980 mentioned by the
Deputized Zoning Administrator in his Certification. For how could the HLURB [approve] on
September 21, 1978 a town plan and zoning ordinance still to be passed in 1980. Certainly, the
HLURB could not approve a zoning ordinance which was not yet existing at the time of the passage
of the approval. The HLURB must have been referring to another town plan and zoning ordinance of
Daet, Camarines Norte which was passed in 1978 and not in 1980. This can be inferred from the
letter of Deputized Zoning Administrator Jesus L. Fernandez, Jr. x x x.

xxxx

If what was approved by the HLURB on September 21, 1978 was the 1978 original land use plan of
Daet, Camarines Norte [t]hen the inescapable conclusion would be that subject landholding of
respondents is not exempt from CARP coverage since the same was classified as agricultural in
nature as found by the then DAR Secretary Horacio R. Morales, Jr. x x x.

xxxx
Even assuming for the sake of argument, that a zoning ordinance was enacted after 1978,
particularly in 1980 or 1982, reclassifying respondents’ landholding from agricultural to non-
agricultural or residential, still OUR conclusion would be the same since no proof was ever
presented that the later zoning ordinance was approved by the HLURB. We are, therefore, in accord
with the x x x disquisition of the DAR Secretary x x x. 20

The Court of Appeals denied petitioners’ Motion for Reconsideration. Hence, this appeal.

The parties submitted their respective Memoranda on July 1, 2013 (petitioners) and July 12, 2013
(respondents). 21

THEORY OF PETITIONERS

Petitioners are now before us to raise the following issues which they allege to be purely questions
of law:

1. Whether or not the subject landholding of the petitioners is exempted from the coverage of
the government’s Comprehensive Agrarian Reform Program;

2. Whether or not the petition filed by respondents before the Court of Appeals is exempted
from the rule that errors not assigned on appeal cannot be passed upon. 22

Petitioners claim that the Court of Appeals failed to take into consideration that with respect to the
alleged discrepancy involving the approval of Zoning Ordinance No. 4, series of 1980, and the
ratification of Daet’s Town Plan by the National Coordinating Council for Town Planning, Housing
and Zoning (NCCTPHZ) in 1978, the NCCTPHZ was created as a first attempt to formulate and
approve the Comprehensive Development Town Plans in selected municipalities throughout the
country as mandated by Letter of Instructions No. 729; that almost all the town plans then approved
by the NCCTPHZ included a Land Use Plan, but not a Zoning Plan or an adopted Zoning Ordinance;
that after one year, the NCCTPHZ was dissolved, and the Human Settlements Regulatory
Commission (now HLURB) subsequently formed was the one that required a Zoning Ordinance as
part of the Comprehensive Development Plan to be submitted by each municipality for approval.
Petitioners contend that Daet, Camarines Norte was among the first municipalities which formulated
its Comprehensive Development Plan approved by NCCTHPZ without a zoning ordinance and that
"it was only in 1980 that the Sangguniang Bayan of Daet adopted their zoning ordinance based on
their previously approved Land Use Plan." 23

Petitioners contend that they are deemed to have substantially complied with the requirements of
Administrative Order No. 6, series of 1994, particularly with respect to the HLURB certification that
the pertinent zoning ordinance must have been approved by the board prior to June 15, 1988.
Petitioners point out that "there was no HLURB yet at the time that Daet’s Town Plan was prepared
and the Zoning Ordinance was passed" and that the "HLURB came about when the former Human
Settlements Regulatory Commission was renamed"  per Executive Order No. 90 dated December
24

17, 1986. Petitioners allege that it is absurd to require approval by the HLURB of the subject 1980
Zoning Ordinance. Petitioners further allege that the approval of Daet’s Town Plan or Land Use Plan
on September 21, 1978 by NCCTPHZ or HSRC must be favorably considered to have carried with it
the corresponding approval of the Zoning Ordinance subsequently passed in 1980 which, in the first
place, was based on the HSRC-approved 1978 Town Plan or Land Use Plan.

Petitioners cite Junio v. Garilao :

25
The Certification issued by the Board expressly mentioned that the "property x x x, Lot 835-B located
at Brgy. Tangub, Bacolod City, covered by TCT T-79622, x x x was identified for residential use
under the 1976 Framework Plan of the City of Bacolod prepared pursuant to the Program of the then
Ministry of Local Government and approved by the City Council in its Resolution No. 5153-A, Series
of 1976." It also certified that the "area where the aforecited property is located was likewise
identified for residential use under the Town Planning, Housing Zoning Program of the National
Coordinating Council of the then Ministry of Human Settlements as approved under the City Council
Resolution No. 5792, Series of 1977. x x x." (Citations omitted.) Petitioners, alternatively, submit that
the HLURB approval of the 1980 Zoning Ordinance is not necessary following the provision of
Section 4 in relation to Section 3(c) of Republic Act No. 6657, which reads:

SECTION 3. Definitions. — For the purpose of this Act, unless the context indicates otherwise:

xxxx

(c) Agricultural land refers to land devoted to agricultural activity and not classified as mineral, forest,
residential, commercial or industrial land.

SECTION 4. Scope. — The Comprehensive Agrarian Reform Law of 1988 shall cover, regardless of
tenurial arrangement and commodity produced, all public and private agricultural lands as provided
in Proclamation No. 131 and Executive Order No. 229, including other lands of the public domain
suitable for agriculture.

More specifically, the following lands are covered by the Comprehensive Agrarian Reform Program:

(a) All alienable and disposable lands of the public domain devoted to or suitable for
agriculture. No reclassification of forest or mineral lands to agricultural lands shall be
undertaken after the approval of this Act until Congress, taking into account ecological,
developmental and equity considerations, shall have determined by law, the specific limits of
the public domain.

(b) All lands of the public domain in excess of the specific limits as determined by Congress
in the preceding paragraph;

(c) All other lands owned by the Government devoted to or suitable for agriculture; and

(d) All private lands devoted to or suitable for agriculture regardless of the agricultural
products raised or that can be raised thereon.

Petitioners submit that there is nothing in the above provisions of law that requires the exercise of
the power to reclassify an agricultural land to be approved by the HLURB. Petitioners claim that such
power to reclassify is exclusively within the authority of the local government unit concerned.
Petitioners allege that given the reclassification of the subject property to residential pursuant to
Ordinance No. 04, series of 1980, based on the 1978 approved Town Plan, the same can no longer
be reverted to agricultural. Petitioners conclude that since the subject property was reclassified from
agricultural to residential long before June 15, 1988, it is therefore exempt from the coverage of the
CARL. 26

Petitioners likewise argue that the Court of Appeals "committed palpable and patent error and/or
grave abuse of discretion in holding that the present case is exempted from the rule that errors not
assigned on appeal cannot be passed upon." 27
According to petitioners, the Court of Appeals expressly admitted that the issue regarding the
alleged lack of proof of approval by the HLURB of the 1980 Zoning Ordinance was not raised as an
error in the appealed case, but the Court of Appeals was able to justify its action by enumerating the
instances when an appellate court is clothed with ample authority to review rulings even if they are
not assigned as errors in the appeal, and claiming that the present case fell squarely under the
enumerated exceptions. Petitioners submit that the instant case does not fall under any of the
mentioned exceptions. 28

Petitioners claim injustice because the Court of Appeals allegedly allowed respondents to intervene
in the instant case even beyond the period prescribed by the Rules of Court.

THEORY OF RESPONDENTS

Respondents allege that a careful reading of the Certification issued by the HLURB as compared
with the one issued by the Deputized Zoning Administrator would show "glaring inconsistencies
which cast doubt as to the land use classification of petitioners’ landholding."
29

Respondents contend that if "what was approved by the HLURB on September 21, 1978 was the
original land use plan of Daet, Camarines Norte, then the inescapable conclusion would be that the
subject landholding of respondents is not exempt from CARP coverage since the same was
classified as agricultural in nature."
30

Respondents claim that HLURB approval is required for reclassification of land through local
ordinance, contrary to petitioners’ contention.

As regards petitioners’ allegation that the Court of Appeals committed grave abuse of discretion
when it passed upon an issue not assigned as error, respondents argue that this maxim is subject to
exceptions as provided in Section 8 of Rule 51.

Claiming that they are indispensable parties, respondents finally argue that the allowance of their
motion to intervene by the Court of Appeals even beyond the period prescribed by the Rules of
Court was proper.

THIS COURT’S RULING

The petition has merit. We sustain the September 5, 2005 Decision of the Office of the President
and its Order dated March 3, 2006 and thus reverse the questioned Decision and Resolution of the
Court of Appeals, which upheld the decision of the DAR to deny petitioner’s request for exemption
from CARP for the subject property.

The power to reclassify land is granted by law to the local government, which was validly exercised
in this case. The subject property having already been validly reclassified to residential land by the
municipality of Daet prior to June 15, 1988, when the CARL took effect, then it is exempt from the
coverage of CARP.

DISCUSSION

At the outset, we would like to address petitioners’ contention that the Court of Appeals allegedly
allowed respondents to intervene in the instant case even beyond the period prescribed by the Rules
of Court. The Court of Appeals found, however, that being the farmer-beneficiaries, respondents
"have substantial rights or interests in the outcome of the case;" that "[i]ndisputably, they stand to be
directly injured by the assailed Decision of the Office of the President;" and that "their rights or
interests cannot be adequately pursued and protected in another proceeding." Furthermore, the
Court of Appeals, in giving due course to respondents’ intervention, reasoned that this Court has in
the past allowed a party to intervene even beyond the period prescribed by the Rules, as "the
allowance or disallowance of a motion for intervention rests on the sound discretion of the court after
consideration of the appropriate circumstances." We see no reason to question the Court of Appeals’
discretion on this matter.
31

Nevertheless, we disagree with the Court of Appeals’ disposition of the substantive issue of whether
subject property is exempt from the coverage of the CARP.

We have unequivocally held that "to be exempt from CARP, all that is needed is one valid
reclassification of the land from agricultural to non- agricultural by a duly authorized government
agency before June 15, 1988, when the CARL took effect." 32

As to what is a "duly authorized government agency," the DAR Handbook for CARP
Implementors  recognizes and discusses the LGU’s authority to reclassify lands under Republic Act
33

No. 7160 or the Local Government Code. 34

Moreover, in Heirs of Dr. Jose Deleste v. Land Bank of the Philippines,  the Court held that "[it] is
35

undeniable that the local government has the power to reclassify agricultural into non-agricultural
lands." Citing Pasong Bayabas Farmers Association, Inc. v. Court of Appeals,  the Court further held
36

that this power is not subject to DAR approval, and we quote:

[P]ursuant to Sec. 3 of Republic Act No. (RA) 2264, amending the Local Government Code,
municipal and/or city councils are empowered to "adopt zoning and subdivision ordinances or
regulations in consultation with the National Planning Commission." It was also emphasized
therein that "[t]he power of the local government to convert or reclassify lands [from
agricultural to non-agricultural lands prior to the passage of RA 6657] is not subject to the
approval of the [DAR]."  (Emphasis ours, citation omitted.)
37

In the case now before us, the Court of Appeals reversed the Office of the President’s ruling
approving petitioners’ application for exemption clearance "because of [petitioners’] failure to comply
with the requirements for such exemption." Even though not specifically assigned as an error, the
Court of Appeals focused on the discrepancy it had allegedly found between the certification issued
by the Deputized Zoning Administrator and the one from the HLURB regarding the year that the
subject property was reclassified by the local government from agricultural to residential. The Court
of Appeals even went on to state that "[a] careful scrutiny of the record of this case reveals that the
Office of the President failed to judiciously examine the supporting documents submitted by
respondents in their application for exemption."38

The Court of Appeals found it material that the HLURB certified that the "Town Plan and Zoning
Ordinance of Daet, Camarines Norte was approved by the Housing and Land Use Regulatory Board,
then Human Settlements Regulatory Commission on September 21, 1978"  while the Deputized
39

Zoning Administrator authorized that as per Zoning Ordinance No. 4, series of 1980, subject
property was within the residential built-up area. The Court of Appeals insisted that petitioners
should have submitted the HLURB certification for Zoning Ordinance No. 4.

The Certification  from Deputized Zoning Administrator Engr. Jesus Fernandez, Jr. dated October 9,
40

1996, reads in part:

This is to certify that the parcel of land owned [in] common by NOEL L. ONG, OMAR ANTHONY L.
ONG and NORMAN L. ONG situated at Barangay Dogongan, Daet, Camarines Norte, described
under Transfer Certificate of Title No. T-17045 and Sketch Plan of Lot 1, Psu-19545, surveyed by
JOSE A. GOC, JR. Geodetic Engineer, with an area of FOUR HUNDRED FIVE THOUSAND SIX
HUNDRED FORTYFIVE (405,645) square meters is within the RESIDENTIAL BUILT-UP area as
per Zoning Ordinance No. 4, series of 1980, outside the ten meters right of way and the
municipality has no proposed road expansion and improvement on the area as per record of existing
Town Plan.

The body of the Certification  dated December 9, 1996 from the HLURB Regional Director Jesse A.
41

Obligacion reads as follows:

This is to certify that as per records on file, the Town Plan and Zoning Ordinance of Daet,
Camarines Norte was approved by the Housing and Land Use Regulatory Board, then Human
Settlements Regulatory Commission on September 21, 1978 in accordance with official practices
and procedures carried out pursuant to Letter of Instruction No. 511 which established a National
Coordinating Council for Town Planning, Housing and Zoning (NCCTPHZ), and pursuant to HLRB
Memorandum Circular No. 15, Series of 1995.

Factual as this may seem, this brings to us the crucial question of whether, based on these two
certifications, petitioners had effectively complied with the requirements for exemption.

Looking at such requirements, DAR Administrative Order No. 06-94  or the "Guidelines for the
42

Issuance of Exemption Clearances Based on Sec. 3(c) of Republic Act No. 6657 and the
Department of Justice (DOJ) Opinion No. 44, Series Of 1990" was the prevailing rule when
petitioners filed their petition for exemption. Under A.O. No. 06-94’s chapter entitled "Legal Basis," it
is stated that:

Department of Justice Opinion No. 44 series of 1990 has ruled that with respect to the conversion of
agricultural lands covered by R.A. No. 6657 to non-agricultural uses, the authority of DAR to approve
such conversion may be exercised from the date of its effectivity, on June 15, 1988. Thus, all lands
that already classified as commercial, industrial or residential before 15 June 1988 no longer
need any conversion clearance.

DAR A.O. No. 06-94 also provided a list of required documents to be attached to the application for
exemption clearance, as follows:

The application should be duly signed by the landowner or his representative, and should be
accompanied by the following documents:

1. Duly notarized Special Power of Attorney, if the applicant is not the landowner himself;

2. Certified true copies of the titles which is the subject of the application;

3. Current tax declaration (s) covering the property;

4. Location Map or Vicinity Map;

5. Certification from the Deputized Zoning Administrator that the land has been
reclassified to residential industrial or commercial use prior to June 15, 1988;
 6. Certification from the HLURB that the pertinent zoning ordinances has been
approved by the Board prior to June 15, 1988;

7. Certification from the National Irrigation Administration that the land is not covered by
Administrative Order No. 20, s. 1992, i.e., that the area is not irrigated, nor scheduled for
irrigation rehabilitation nor irrigable with firm funding commitment.

8. Proof of payment of disturbance compensation, if the area is presently being occupied by

farmers, or waiver/undertaking by the occupants that they will vacate the area whenever
required.

The Court of Appeals focused on petitioners’ alleged "failure to comply with the requirements for
such exemption," a matter not even assigned by respondents (petitioners therein) as an error, which
fact the Court of Appeals itself admits in its questioned decision, and which it further admits it may
not rule upon, but which it claims falls under one of the exceptions to the general rule.

The respondents’ Verified Petition for Review with Prayer for Preliminary Injunction and TRO  filed
43

before the Court of Appeals contains a "Concise Statement of the issues & Assignment of Errors
Found in the Questioned O.P. Decision & O.P. Order committed by the Honorable Office of the
President," which reads:

I - THE HONORABLE OFFICE OF THE PRESIDENT GRAVELY ERRED IN HOLDING

THAT RESPONDENTS’ PARCEL OF LAND COVERED BY TCT NO. T-17045 WITH AN
AREA OF 405,605 SQUARE METERS HAS BEEN RECLASSIFIED AS RESIDENTIAL
LAND, HENCE, EXEMPT FROM CARP COVERAGE.

II – THE HONORABLE OFFICE OF THE PRESIDENT GRAVELY ERRED IN APPLYING

THE CASE OF NATALIA REALTY VS. DAR, 225 SCRA 278 IN THE INSTANT CASE
NOTWITHSTANDING THE GREAT VARIANCE IN THE PECULIAR FACTUAL MILIEU OR
ENVIRONMENT OF EACH CASE.

III – THE HONORABLE OFFICE OF THE PRESIDENT GRAVELY ERRED IN ADMITTING

HOOK, LINE & SINKER THE [BIASED], SELF-SERVING, VAGUE, AND AMBIGUOUS
CERTIFICATION OF THE DEPUTY ZONING ADMINISTRATOR & THE INADEQUATE &
INSUFFICIENT HLURB CERTIFICATION, AS AGAINST THE THOROUGH & EXPERT
INVESTIGATION & CONSISTENT FINDINGS THAT THE SUBJECT LAND IS
AGRICULTURAL OF THE DAR RCLUPPI INVESTIGATING TEAM, THE HONORABLE
DAR REGIONAL DIRECTOR, & THE HONORABLE DAR SECRETARIES. 44

The Court of Appeals wrote:

After a judicious review of the record of this case, WE rule to grant the Petition but on another
ground.

xxxx

While the foregoing issue has not been raised as an error, and therefore, WE may not pass
upon it, as this would contravene the basic rules of fair play and justice, however, it is
jurisprudentially recognized that it is well within the authority of this Court to raise, if it
deems proper under the circumstances obtaining, error/s not assigned on an appealed
case. Thus, in several cases, the Supreme Court declared that an appellate court is clothed with
ample authority to review rulings even if they are not assigned as errors in the appeal in these
instances: (a) grounds not assigned as errors but affecting jurisdiction over the subject matter; (b)
matters not assigned as errors on appeal but are evidently plain or clerical errors within
contemplation of law; (c) matters not assigned as errors on appeal but consideration of which is
necessary in arriving at a just decision and complete resolution of the case or to serve the interests
of justice or to avoid dispensing piecemeal justice; (d) matters not specifically assigned as errors on
appeal but raised in the trial court and are matters of record having some bearing on the issue
submitted which the parties failed to raise or which the lower court ignored; (e) matters not assigned
as errors on appeal but closely related to an error assigned; and (f) matters not assigned as errors
on appeal but upon which the determination of a question properly assigned, is dependent. The
present case undoubtedly falls squarely under the above-enumerated exceptions.  (Emphasis 45

ours.)

To our mind, the Court of Appeals committed a reversible error when it decided the case based on a
ground neither found in the aforequoted assignment of errors submitted by respondents nor in the
arguments propounded in the appellants’ brief. The applicable rule is Section 8, Rule 51 of the 1997
Rules of Civil Procedure, which reads:

Section 8. Questions that may be decided. - No error which does not affect the jurisdiction over the
subject matter or the validity of the judgment appealed from or the proceedings therein will be
considered unless stated in the assignment of errors, or closely related to or dependent on an
assigned error and properly argued in the brief, save as the court may pass upon plain errors and
clerical errors.

Although the Court has declared many exceptions to the above rule, and the Court of Appeals
painstakingly enumerated some of these exceptions, the Court of Appeals omitted to discuss to
which exception this alleged error belongs, and exactly how this error falls under such exception. To
our mind, flexibility in applying the rules must be balanced with sufficient reason and justification,
clearly arrived at and explained by the Court of Appeals, so as not to "contravene the basic rules of
fair play and justice."
46

We find that the decision of the Office of the President is more consistent with law and
jurisprudence. The Office of the President found that the subject property had been properly
reclassified by the appropriate local government authority as residential, a fact even noted by the
DAR.

To reiterate, we have held that "lands previously converted by government agencies to non-
agricultural uses prior to the effectivity of the CARL are outside its coverage."
47

As to the appropriateness of an HSRC approval, the Court in Heirs of Deleste ruled on the validity of
a local government’s reclassification of land that was subsequently approved not by the HLURB, but
by its predecessor, the HSRC. The Court held that the HSRC approval is enough, and it is a
valid reclassification, as explained in the following quoted portion of the decision:

Likewise, it is not controverted that City Ordinance No. 1313, which was enacted by the City of Iligan
in 1975, reclassified the subject property into a commercial/residential area. DARAB, however,
believes that the approval of HLURB is necessary in order for the reclassification to be valid.

We differ. As previously mentioned, City Ordinance No. 1313 was enacted by the City of Iligan in
1975. Significantly, there was still no HLURB to speak of during that time. It was the Task
Force on Human Settlements, the earliest predecessor of HLURB, which was already in existence at
that time, having been created on September 19, 1973 pursuant to Executive Order No. 419. It
should be noted, however, that the Task Force was not empowered to review and approve zoning
ordinances and regulations. As a matter of fact, it was only on August 9, 1978, with the
issuance of Letter of Instructions No. 729, that local governments were required to submit
their existing land use plans, zoning ordinances, enforcement systems and procedures to the
Ministry of Human Settlements for review and ratification. The Human Settlements
Regulatory Commission (HSRC) was the regulatory arm of the Ministry of Human
Settlements.

Significantly, accompanying the Certification dated October 8, 1999 issued by Gil R. Balondo,
Deputy Zoning Administrator of the City Planning and Development Office, Iligan City, and the letter
dated October 8, 1999 issued by Ayunan B. Rajah, Regional Officer of the HLURB, is the Certificate
of Approval issued by Imelda Romualdez Marcos, then Minister of Human Settlements and
Chairperson of the HSRC, showing that the local zoning ordinance was, indeed, approved on
September 21, 1978. This leads to no other conclusion than that City Ordinance No. 1313
enacted by the City of Iligan was approved by the HSRC, the predecessor of HLURB. The
validity of said local zoning ordinance is, therefore, beyond question.

Since the subject property had been reclassified as residential/commercial land with the enactment
of City Ordinance No. 1313 in 1975, it can no longer be considered as an "agricultural land" within
the ambit of RA 6657. x x x.  (Emphases supplied, citations omitted.)
48

The Court then cited a similar case, Remman Enterprises, Inc. v. Court of Appeals,  wherein it was
49

held:

In the main, REMMAN hinges its application for exemption on the ground that the subject lands had
ceased to be agricultural lands by virtue of the zoning classification by the Sangguniang Bayan of
Dasmariñas, Cavite, and approved by the HSRC, specifying them as residential.

In Natalia Realty, Inc. v. Department of Agriculture, this Court resolved the issue of whether lands
already classified for residential, commercial or industrial use, as approved by the Housing and Land
Use Regulatory Board (HLURB) and its precursor agencies, i.e., National Housing Authority and
Human Settlements Regulatory Commission, prior to 15 June 1988, are covered by Republic Act
No. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988. We answered in
the negative x x x. (Citation omitted.)

We discussed the history of the HSRC in Buklod nang Magbubukid sa Lupaing Ramos, Inc. v. E. M.
Ramos and Sons, Inc.  wherein we said:
50

The Court again agrees with the Court of Appeals that Resolution No. 29-A need not be subjected to
review and approval by the HSRC/HLURB. Resolution No. 29-A was approved by the Municipality of
Dasmariñas on July 9, 1972, at which time, there was even no HSRC/HLURB to speak of.

The earliest predecessor of the HSRC, the Task Force on Human Settlements, was created through
Executive Order No. 419 more than a year later on September 19, 1973. And even then, the Task
Force had no power to review and approve zoning and subdivision ordinances and regulations.

It was only on August 9, 1978, with the issuance of Letter of Instructions No. 729, that local
governments were required to submit their existing land use plans, zoning ordinances, enforcement
systems, and procedures to the Ministry of Human Settlements for review and ratification.
The HSRC was eventually established on February 7, 1981. Section 5(b) of the HSRC Charter
contained the explicit mandate for the HSRC to:

b. Review, evaluate and approve or disapprove comprehensive land use development plans
and zoning ordinances of local government; and the zoning component of civil works and
infrastructure projects of national, regional and local governments; subdivisions, condominiums or
estate development projects including industrial estates, of both the public and private sectors and
urban renewal plans, programs and projects: Provided, that the land use Development Plans and
Zoning Ordinances of Local Governments herein subject to review, evaluation and approval of the
commission shall respect the classification of public lands for forest purposes as certified by the
Ministry of Natural Resources: Provided, further, that the classification of specific alienable and
disposable lands by the Bureau of Lands shall be in accordance with the relevant zoning ordinance
of Local government where it exists; and provided, finally, that in cities and municipalities where
there are as yet no zoning ordinances, the Bureau of Lands may dispose of specific alienable and
disposable lands in accordance with its own classification scheme subject to the condition that the
classification of these lands may be subsequently change by the local governments in accordance
with their particular zoning ordinances which may be promulgated later. x x x. ASEIDH

Neither the Ministry of Human Settlements nor the HSRC, however, could have exercised its power
of review retroactively absent an express provision to that effect in Letter of Instructions No. 729 or
the HSRC Charter, respectively. A sound cannon of statutory construction is that a statute operates
prospectively only and never retroactively, unless the legislative intent to the contrary is made
manifest either by the express terms of the statute or by necessary implication. Article 4 of the Civil
Code provides that: "Laws shall have no retroactive effect, unless the contrary is provided." Hence,
in order that a law may have retroactive effect, it is necessary that an express provision to this effect
be made in the law, otherwise nothing should be understood which is not embodied in the law.
Furthermore, it must be borne in mind that a law is a rule established to guide our actions without no
binding effect until it is enacted, wherefore, it has no application to past times but only to future time,
and that is why it is said that the law looks to the future only and has no retroactive effect unless the
legislator may have formally given that effect to some legal provisions.

xxxx

Since the subject property had been reclassified as residential land by virtue of Resolution
No. 29-A dated July 9, 1972, it is no longer agricultural land by the time the CARL took effect
on June 15, 1988 and is, therefore, exempt from the CARP. (Emphases supplied, citations
omitted.)

In Buklod, the Court cited previous decisions with the same conclusion, and we quote the relevant
points of discussion below:

This is not the first time that the Court made such a ruling.

xxxx

Indeed, lands not devoted to agricultural activity are outside the coverage of CARL. These
include lands previously converted to non-agricultural uses prior to the effectivity of CARL
by government agencies other than respondent DAR. In its Revised Rules and Regulations
Governing Conversion of Private Agricultural Lands to Non-Agricultural Uses, DAR itself defined
"agricultural land" thus —
"x x x Agricultural land refers to those devoted to agricultural activity as defined in R.A. 6657 and not
classified as mineral or forest by the Department of Environment and Natural Resources (DENR)
and its predecessor agencies, and not classified in town plans and zoning ordinances as approved
by the Housing and Land Use Regulatory Board (HLURB) and its preceding competent authorities
prior to 15 June 1988 for residential, commercial or industrial use."

Since the NATALIA lands were converted prior to 15 June 1988, respondent DAR is bound by such
conversion. It was therefore error to include the undeveloped portions of the Antipolo Hills
Subdivision within, the coverage of CARL.

Be that as it may, the Secretary of Justice, responding to a query by the Secretary of Agrarian
Reform, noted in an Opinion that lands covered by Presidential Proclamation No. 1637, inter alia, of
which the NATALIA lands are part, having been reserved for townsite purposes "to be developed as
human settlements by the proper land and housing agency," are "not deemed ‘agricultural lands’
within the meaning and intent of Section 3(c) of R.A. No. 6657." Not being deemed "agricultural
lands," they are outside the coverage of CARL. x x x.

That the land in the Natalia Realty case was reclassified as residential by a presidential

proclamation, while the subject property herein was reclassified as residential by a local ordinance,
will not preclude the application of the ruling of this Court in the former to the latter. The operative
fact that places a parcel of land beyond the ambit of the CARL is its valid reclassification
from agricultural to nonagricultural prior to the effectivity of the CARL on June 15, 1988, not
by how or whose authority it was reclassified.

In Pasong Bayabas Farmers Association, Inc. v. Court of Appeals (Pasong Bayabas case), the
Court made the following findings:

Under Section 3(c) of Rep. Act No. 6657, agricultural lands refer to lands devoted to agriculture as
conferred in the said law and not classified as industrial land. Agricultural lands are only those lands
which are arable or suitable lands that do not include commercial, industrial and residential lands.
Section 4(e) of the law provides that it covers all private lands devoted to or suitable for agriculture
regardless of the agricultural products raised or that can be raised thereon. Rep. Act No. 6657 took
effect only on June 15, 1988. But long before the law tools effect, the property subject of the
suit had already been reclassified and converted from agricultural to non-agricultural or
residential land by the following administrative agencies: (a) the Bureau of Lands, when it
approved the subdivision plan of the property consisting of 728 subdivision lots; (b) the National
Planning Commission which approved the subdivision plan subdivided by the LDC/CAI for the
development of the property into a low-cost housing project; (c) the Municipal Council
of Carmona, Cavite, when it approved Kapasiyahang Blg. 30 on May 30, 1976; (d) Agrarian
Reform Minister Conrado F. Estrella, on July 3, 1979, when he granted the application of the
respondent for the development of the Hakone Housing Project with an area of 35.80 hectares upon
the recommendation of the Agrarian Reform Team, Regional Director of Region IV, which found,
after verification and investigation, that the property was not covered by P.D. No. 27, it being
untenanted and not devoted to the production of palay/or corn and that the property was suitable for
conversion to residential subdivision; (e) by the Ministry of Local Government and Community
Development; (f) the Human Settlements Regulatory Commission which issued a location clearance,
development permit, Certificate of Inspection and License to Sell to the LDC/private respondent;
and, (g) the Housing and Land Use Regulatory Board which also issued to the respondent CAI/LDC
a license to sell the subdivision lots.

x x x.
Noticeably, there were several government agencies which reclassified and converted the property
from agricultural to nonagricultural in the Pasong Bayabas case. The CARL though does not specify
which specific government agency should have done the reclassification. To be exempt from CARP,
all that is needed is one valid reclassification of the land from agricultural to non-agricultural by a
duly authorized government agency before June 15, 1988, when the CARL took effect. All similar
actions as regards the land subsequently rendered by other government agencies shall merely serve
as confirmation of the reclassification. The Court actually recognized in the Pasong Bayabas
case the power of the local government to convert or reclassify lands through a zoning ordinance:

Section 3 of Rep. Act No. 2264, amending the Local Government Code, specifically empowers
municipal and/or city councils to adopt zoning and subdivision ordinances or regulations in
consultation with the National Planning Commission. A zoning ordinance prescribes, defines, and
apportions a given political subdivision into specific land uses as present and future projection of
needs. The power of the local government to convert or reclassify lands to residential lands to non-
agricultural lands reclassified is not subject to the approval of the Department of Agrarian Reform.
Section 65 of Rep. Act No. 6657 relied upon by the petitioner applies only to applications by the
landlord or the beneficiary for the conversion of lands previously placed under the agrarian reform
law after the lapse of five years from its award. It does not apply to agricultural lands already
converted as residential lands prior to the passage of Rep. Act No. 6657. x x x.

At the very beginning of Junio v. Garilao, the Court already declared that:

Lands already classified and identified as commercial, industrial or residential before June 15, 1988 -
the date of effectivity of the Comprehensive Agrarian Reform Law (CARL) - are outside the coverage
of this law. Therefore, they no longer need any conversion clearance from the Department of
Agrarian Reform (DAR).

The Court then proceeded to uphold the authority of the City Council of Bacolod to reclassify as
residential a parcel of land through Resolution No. 5153-A, series of 1976. The reclassification was
later affirmed by the HSRC. Resultantly, the Court sustained the DAR Order dated September 13,
1994, exempting the same parcel of land from CARP Coverage. 51

Therefore, the Office of the President was correct when it ruled that the DAR's "denial of the
exemption on the ground that the MARO [had] already issued a NOTICE OF ACQUISITION in 1994
is flawed" and that "[the] area having already been reclassified as residential prior to June 1988 (as
established by the DAR RCLUPPI V), it cannot be the subject of a Notice of Acquisition which covers
only agricultural lands." The Office of the President likewise correctly held that "the Notice of
Acquisition over the subject property is void ab initio. "
52

WHEREFORE, in view of the foregoing, we GRANT the petition. We hereby SET ASIDE the

November 30, 2010 Decision and the May 11, 2011 Resolution of the Court of Appeals in CA-G.R.
SP No. 93941 and REINSTATE the September 5, 2005 Decision and the March 3, 2006 Order of
the Office of the President.

SO ORDERED.

G.R. No. 188299               January 23, 2013

HEIRS OF LUIS A. LUNA and REMEGIO A. LUNA, and LUZ LUNA-SANTOS, as represented by
their Attorney-in-fact, AUREA B. LUBIS, Petitioners,
vs.
RUBEN S. AFABLE, TOMAS M. AFABLE, FLORANTE A. EVANGELISTA, LEOVY S.
EVANGELISTA, JAIME M. ILAGAN ET, AL., Respondents.

DECISION

PEREZ, J.:

The power of local government units to convert or reclassify lands from agricultural to non-
agricultural prior to the passage of Republic Act (RA) No. 6657 – the Comprehensive Agrarian
Reform Law (CARL) – is not subject to the approv3l of the Department of Agrarian Reform
(DAR).1 In this sense, the authority of local government units to reclassify land before 15 June 1988
– the date of effectivity of the CARL – may be said to be absolute.

Before the Court is a Petition for Review on Certiorari seeking to reverse and set aside the 13 March
2009 Decision2 of the Court of Appeals (CA) in CA-G.R. SP No. 101114 and its 10 June 2009
Resolution3 denying petitioners’ motion for reconsideration.

The Facts

Petitioners are co-owners of a parcel of land covered by Transfer Certificate of Title (TCT) No. J-
7205 (T-54199), with an area of 158.77 hectares, located in Barangay Guinobatan, Calapan City,
Oriental Mindoro.4 100.2856 hectares of the landholding was subjected to compulsory acquisition
under the Comprehensive Agrarian Reform Program (CARP) through a Notice of Land Valuation
and Acquisition dated 20 August 1998 issued by the Provincial Agrarian Reform Officer (PARO) and
published in a newspaper of general circulation on 29, 30 and 31 August 1998.5

Respondents were identified by the DAR as qualified farmer-beneficiaries; hence, the corresponding
Certificates of Land Ownership Award (CLOAs) were generated, issued to respondents and duly
registered in their names on 12 October 1998.6

On 21 October 1998, petitioners filed before the DAR Adjudication Board (DARAB) Oriental Mindoro
a Petition for "Cancellation of CLOAs, Revocation of Notice of Valuation and Acquisition and
Upholding and Affirming the Classification of Subject Property and Declaring the same outside the
purview of RA No. 6657."7 The petition was anchored mainly on the reclassification of the land in
question into a light intensity industrial zone pursuant to Municipal Ordinance No. 21, series of 1981,
enacted by the Sangguniang Bayan of Calapan, thereby excluding the same from the coverage of
the agrarian law.

The Ruling of the DARAB Calapan City

In a Decision dated 26 August 1999, the DARAB disposed of the petition in the following manner:

IN THE LIGHT OF the foregoing, judgment is hereby rendered:

1. Ordering the Cancellation of Certificates of Land Ownership Award x x x issued by the

Department of Agrarian Reform in favor of private respondents pursuant to RA No. 6657
covering the subject parcel of land under TCT No. 5-7205 [sic] (T-54199) of the Registry of
Deeds for the Province of Oriental Mindoro, in the name of Luis Luna, et. al.,
 2. Upholding and affirming the classification of the subject parcel of land into residential,
commercial and institutional uses pursuant to RA No. 2264 (Autonomy Act of 1959) and the
Local Government Code of 1991;

3. Declaring the farmholding in question outside the purview of Republic Act No. 6657;

x x x x8

The DARAB found that petitioners’ property is exempt from the CARP as it has been reclassified as
non-agricultural prior to the effectivity of Republic Act (RA) No. 6657. According to the DARAB, the
records of the case indicate that subject parcel of land was classified as within the residential,
commercial and industrial zone by the Sangguniang Bayan of Calapan, Oriental Mindoro through
Resolution No. 139, Series of 1981, enacted on 14 April 1981 as Municipal Ordinance No. 21.
Moreover, the Office of the City Assessor has also classified the property as residential, commercial
and industrial in use under the tax declaration covering the same. Finally, the Office of the Deputized
Zoning Administrator, Urban Planning and Development Office, Calapan City, issued a Certification
on 25 September 1998 stating that "under Article III, Section 3, No. 7 of Resolution No. 139,
Municipal Ordinance No. 21, Series of 1981, areas covered by this [sic] provisions has [sic] been
declared as Light Intensity Industrial Zone prior to the approval of RA 6657 x x x."9

The DARAB cited Department of Justice (DOJ) Opinion No. 44, Series of 1990, which provides that
a parcel of land is considered non-agricultural and, therefore, beyond the coverage of the CARP, if it
had been classified as residential, commercial, or industrial in the city or municipality where the Land
Use Plan or zoning ordinance has been approved by the Housing and Land Use Regulatory Board
(HLURB) before 15 June 1988, the date of effectivity of RA No. 6657. The aforementioned Opinion
of the DOJ further states that all lands falling under this category, that is, lands already classified as
commercial, industrial or residential, before 15 June 1988 no longer need any conversion clearance
from the DAR.10

Aggrieved, respondents appealed to the DARAB Central Office.

The Ruling of the DARAB Central Office

The Central Office of the DARAB found that its local office in Calapan City erred in declaring
petitioners’ property outside the coverage of the CARP by relying solely on the assertion of the
landowners that the land had already been reclassified from agricultural to non-agricultural prior to
15 June 1988.11

The DARAB held that the local Adjudicator misconstrued DOJ Opinion No. 44, Series of 1990 and,
in the process, overlooked DAR Administrative Order (AO) No. 2, Series of 1994 which provides the
grounds upon which CLOAs may be cancelled, among which is that the land is found to be exempt
or excluded from CARP coverage or is to be part of the landowner’s retained area as determined by
the Secretary of Agrarian Reform or his authorized representative. Thus, the DARAB concluded, the
issue of whether or not petitioners’ land is indeed exempt from CARP coverage is still an
administrative matter to be determined exclusively by the DAR Secretary or his authorized
representative. In short, an exemption clearance from the DAR is still required. In this connection,
DAR AO No. 6 was issued on 27 May 1994 setting down the guidelines in the issuance of exemption
clearance based on Section 3(c) of RA No. 6657 and DOJ Opinion No. 44, Series of 1990. Pursuant
thereto, "any landowner or his duly authorized representative whose lands are covered by DOJ
Opinion No. 44-S-1990, and desires to have an exemption clearance from the DAR, should file the
application with the Regional Office of the DAR where the land is located."12 (Underlining omitted)
Accordingly, the DARAB set aside the Decision dated 26 August 1999 of the DARAB Calapan City
for lack of jurisdiction and referred13 the case to the Regional Office of DAR Region IV for final
determination as to whether the land covered by TCT No. J-7205 (T-54199) in the names of Luis
Luna, et al. is exempt from CARP coverage.14

In an apparent response to the above ruling of the DARAB holding that petitioners still need an
exemption clearance from the DAR, petitioners filed an application for exemption from CARP
coverage of subject land.

The Ruling of the DAR

(On Petitioners’ Application for Exemption from CARP coverage)

In an Order dated 16 December 2003, then DAR Secretary Roberto M. Pagdanganan

(Pagdanganan) granted petitioners’ application for exemption based on the following findings:

In a joint ocular inspection and investigation conducted by the representatives of the Municipal
Agrarian Reform Office MARO, PARO and Regional Center for Land Use Policy, Planning and
ImplementationRCLUPPI on September 18 2003, disclosed the following findings:

1. The documents (HLURB and Deputized Zoning AdministratorDZA Certifications) show

that the whole 158 hectares is exempted from the coverage of RA 6657;

2. It is not irrigated;

3. The area where subject property is located can be considered as already urbanizing; and

4. The topography is generally flat and the property is traversed by a concrete highway
hence accessible to all means of land transportation.

xxxx

DOJ Opinion No. 44, Series of 1990 and the case of Natalia Realty vs. Department of Agrarian
Reform (12 August 1993/225 SCRA 278) opines (sic) that with respect to the conversion of
agricultural lands covered by RA No. 6657 to non-agricultural uses, the authority of the Department
of Agrarian Reform to approve such conversion maybe [sic] exercised from the date of its effectivity
on 15 June 1988. Thus, all lands that are already classified as commercial, industrial or residential
before 15 June 1988 no longer need any conversion clearance. Moreover, Republic Act No. 6657 or
the Comprehensive Agrarian Reform Law (CARL), Section 3, Paragraph (c) defines "agricultural
land" as referring to "land devoted to agricultural activity as defined in this Act and not classified as
mineral, forest, residential, commercial or industrial land." The case before this Office clearly reveals
that the subject property is not within the agricultural zone prior to 15 June 1988.

The subject property has been zoned as light-industrial prior to the enactment of the Comprehensive
Agrarian Reform Program as shown by the various certifications issued by the HLURB15 and CPDC
of Calapan City, Mindoro stating that the subject properties were reclassified to light-industrial zone
by the City of Calapan, Mindoro and approved by the Human Settlements Regulatory Commission
(now HLURB) per Resolution No. R-39-04 on 31 July 1980.
In view of the foregoing, this Office finds the application to have fully complied with all the
documentary requirements for exemption set forth under DAR A.O. 6 Series of 1994 guidelines. x x
x.16

The application for exemption was, therefore, granted subject to the condition, among others, that
disturbance compensation shall be paid to affected tenants, farm workers, or bona fide occupants of
the land.17

Predictably, respondents filed a motion for reconsideration of the Order of exemption.

The Ruling of the DAR

(On Respondents’ Motion for Reconsideration)

In a Resolution dated 15 June 2004, former DAR Officer-in-Charge (OIC)-Secretary Jose Mari B.
Ponce (Ponce) granted respondents’ motion for reconsideration based on the following
considerations:

Resolution No. R-39-4 Series of 1980 of the then Municipality of Calapan as conditionally approved
by Human Settlement Regulatory Commission (now HLURB) did not categorically place the entire
landholding for light-industrial. Section 1(f), Art. III of said resolution provided that:

"(f) I-1 Zone – Light Industrial are the following:

All lots 100 meters deep east and 200 meters deep west of Sto. Niño-Lumangbayan-Sapul Road
from the Teachers’ Village down to Barangay Guinobatan."

Resolution No. 151, City Ordinance No. 6 which declared the whole area of Barangay Guinobatan
into residential, commercial and institutional uses was approved by the Calapan City Council only on
23 June 1998. Furthermore, the Comprehensive Land Use Plan and Zoning for Calapan City was
approved by the Sangguniang Panlalawigan only in 2001 through Resolution No. 218, Series of
2001.

xxxx

x x x. Hence, in the case at hand, subject property is still within the ambit of the Comprehensive
Agrarian Reform Program since the same were [sic] reclassified only in 1998 through Resolution No.
151, City Ordinance No. 6, and was approved by the Sangguniang Panlalawigan only in 2001
through Resolution No. 218, Series of 2001 long after the effectivity of RA 6657.18

Thus, the Order dated 16 December 2003 issued by DAR Secretary Pagdanganan was set aside,
revoked and cancelled.19

Petitioners filed a motion for reconsideration of this Resolution.

The Ruling of the DAR

(On Petitioners’ Motion for Reconsideration)

On 21 June 2006, the DAR, through then OIC Secretary Nasser C. Pangandaman (Pangandaman),
issued an Order denying petitioners’ motion for reconsideration on the following grounds:
On 13 October 2005, the CLUPPI Inspection Team, accompanied by the Municipal Agrarian Reform
Officer (MARO), Provincial Agrarian Reform Officer (PARO) and other DAR Field Personnel,
conducted an ocular inspection of the subject landholding and noted the following:

• The landholding is composed of four (4) parcels embraced under TCT No. J-7205, with an
area of 153.7713 hectares and located in Brgy. Guinobatan, Calapan City, Oriental Mindoro;

• The topography varies: Lot No. 612-D is flat, while Lot Nos. 612-A, 612-B and 612-C are
flat to hilly;

• There were no billboards visible in the premises;

• There were grasses, some fruit trees and vegetable, but generally, planted with rice;

• Tenants/farmworkers/protestants were present during the inspection;

• A spring was seen in the area, which serves as a source of water for the riceland and
irrigation canal;

• The provincial highway traverses the property;

• Surrounding areas are still agricultural in nature; and

• A newly constructed city hall was built in the riceland area covering a portion of five (5)
hectares out of the eighty (80)-hectare riceland area.

xxxx

A careful perusal of the facts and circumstances show that the petitioners failed to offer substantial
evidence that would warrant reversal of the Order.

Resolution No. R-39-4, Series of 1980 of the then Municipality of Calapan, conditionally approved by
Human Settlement Regulatory Commission, did not categorically place the entire landholding under
Light Industrial Zone. x x x.

xxxx

The Certification issued on 8 October 1998 by the Housing and Land Use Regulatory Board
(HLURB)20 proved that the property is still agricultural. The same provides that the landholding is
within the Light Industrial Zone (100 meters deep west and 200 meters deep east) of the Provincial
Road and the rest is Agricultural Zone based on the Zoning Ordinance approved by HLURB
Resolution No. R-9-34 dated 31 July 1980. It was re-classified into residential, commercial and
institutional uses pursuant to Sangguniang Panlungsod Resolution No. 151, Ordinance No. 6 only on
23 June 1998. The 1981 Ordinance, albeit approved by the HLURB, did not automatically reclassify
the land. Physical aspects of the landholding are actually agricultural as there are some fruit trees
and generally, planted with rice. Also, the surrounding areas are apparently agricultural in usage.

On 11 January 2006, the Municipal Agrarian Reform Officer (MARO) submitted a report stating that
the Light Industrial Zone which covers the fraction covering 100 meters deep west and 200 meters
deep east along the provincial road traversing the property areas which were declared in the HLURB
Certification dated 08 October 1998, were already covered by Presidential Decree No. 27. Thus,
there was already a vested right over the property and can no longer be covered by an Application
for Exemption Clearance.21

The Order dated 15 June 2004 granting the motion for reconsideration filed by the farmer-
beneficiaries was, therefore, affirmed in toto.

Petitioners, consequently, filed an appeal before the Office of the President.

The Ruling of the Office of the President

In its Decision dated 15 December 2006, the Office of the President found petitioners’ appeal
impressed with merit. It quoted with approval the findings and conclusions of former DAR Secretary
Pagdanganan in his Order of 16 December 2003.22

According to the Office of the President, contrary to the findings and conclusions of the DAR in its
Resolution dated 15 June 2004, the area where subject property is situated was really intended to
be classified, not as agricultural, as in fact it was declared as residential, commercial and institutional
in 1998.23

Moreover, supervening events have transpired such that subjecting the property to CARP coverage
would already be inappropriate under the circumstances. The Sangguniang Panlungsod approved
City Ordinance No. 6, Resolution No. 151, declaring the whole area of Barangay Guinobatan into a
residential, commercial and industrial zone on 23 June 1998. The

Notice of Acquisition and Land Valuation covering 100.2856 hectares out of the 158.77 hectares
total land area of the property was issued by the DAR only on 20 August 1998. On 25 September
1998, a Certification was issued by the City Planning and Development Officer/Deputized Zoning

Administrator, classifying subject property as within the Light Intensity Industrial Zone based on
Sangguniang Bayan Resolution No. 139, Municipal Ordinance No. 21, Series of 1981, Section 3 of
RA 6657, DOJ Opinion No. 44, Series of 1990 and Sangguniang Panlungsod Ordinance No. 6,
Series of 1998. The application for exemption from CARP coverage filed by petitioners was initially
granted by the DAR in 2003. The Certificate of Zoning Classification dated 18 December 2003
issued by the Zoning and Land Use Division of the Urban Planning and Development Department
classifies the subject property as an urban Development Zone, based on City Resolution No. 231,
Ordinance No. 4, Series of 1999 and Sangguniang Panlalawigan Resolution No. 218, Series of
2001.24

The Office of the President further held that from the time portions of subject property were declared
to be within the Light Intensity Industrial Zone in 2003, it was never established that it had been
devoted to agricultural purposes. Besides, the confirmation of its falling within the residential,
commercial and industrial zone was ahead of the Notice of Acquisition. It would not be proper to
subject a residential, commercial and industrial property to CARP anymore.25

In conclusion, the Office of the President declared that the 16 December 2003 Order of the DAR is
more in accord with the facts and law relevant to the case. Hence, it set aside, revoked and
cancelled the Resolution and Order, dated 15 June 2004 and 21 June 2006, respectively, of former
DAR OIC-Secretaries Ponce and Pangandaman and reinstated the Order dated 16 December 2003
of Secretary Pagdanganan.26
The motion for reconsideration and second motion for reconsideration of respondents were
respectively denied by the Office of the President in a Resolution27 dated 12 June 2007 and an
Order28 dated 13 September 2007.

Respondents then appealed to the CA.

The Ruling of the Court of Appeals

In a Decision dated 13 March 2009, the CA granted the appeal based on a finding that the ruling of
the Office of the President is not supported by substantial evidence.29

According to the CA, it is clear from the 1981 Ordinance of the Sangguniang Bayan of Calapan that
only those lots 100 meters deep west and 200 meters deep east of the Sto. Niño-Lumangbayan-
Sapul Road from the Teachers’ Village Subdivision to Barangay Guinobatan, and not the entire
Barangay Guinobatan, was classified into light intensity industrial zone. If the intention were to
classify the entire Barangay Guinobatan into a light intensity industrial zone, then the 1981
Ordinance should have provided so, instead of limiting the areas so classified based on the
reference points of the lots that would be affected thereby.30

Citing the case of Natalia Realty, Inc. v. Department of Agrarian Reform,31 wherein it was held that
lands not devoted to agricultural activity, including lands previously converted to non-agricultural
uses by government agencies other than the DAR prior to the effectivity of the CARL, are outside the
coverage of the CARL, the Court of Appeals ruled that in this case, there is no showing that subject
property was in fact included in the classification of light intensity industrial zone prior to 15 June
1988, the date of effectivity of the CARL.32

The CA further held that the fact that the Sangguniang Panlungsod of the City of Calapan later on
enacted Resolution No. 151 as City Ordinance No. 6 on 23 June 1998, declaring the whole area of
Barangay Guinobatan as residential, commercial and institutional areas and site of the new City
Government Center for the City of Calapan does not automatically convert the property into a non-
agricultural land exempt from the coverage of the agrarian law. It bears stressing that the 1998
Ordinance was enacted after the effectivity of the CARL and, in order to be exempt from CARP
coverage, the land must have been classified as industrial/residential before 15 June 1988.33

The CA likewise cited with approval the findings and conclusions of then DAR OIC-Secretaries
Ponce and Pangandaman in their respective decisions and concluded that the Office of the
President gravely erred when it ignored the findings in the 15 June 2004 Resolution and 21 June
2006 Order of the DAR. Said the CA:

x x x The Office of the President cannot simply brush aside the DAR’s pronouncements regarding
the status of the subject property as not exempt from CARP coverage considering that the DAR has
unquestionable technical expertise on these matters. Factual findings of administrative agencies are
generally accorded respect and even finality by this Court, if such findings are supported by
substantial evidence, a situation that obtains in this case. The factual findings of the Secretary of
Agrarian Reform who, by reason of his official position, has acquired expertise in specific matters
within his jurisdiction, deserve full respect and, without justifiable reason, ought not to be altered,
modified or reversed.34

Thus, the Decision dated 15 December 2006, Resolution dated 12 June 2007, and Order dated 13
September 2007 of the Office of the President were reversed and set aside. The Resolution dated
15 June 2004 of former DAR OIC-Secretary Ponce and the Order dated 21 June 2006 of then DAR
OIC-Secretary Pangandaman were reinstated.
Hence, this petition for review wherein petitioners seek the reversal of the aforementioned decision
on the ground, among others, that the Honorable Court of Appeals gravely erred in holding that the
Decision dated 15 December 2006 of the Office of the President is not supported by substantial
evidence.35

The Issue

The core issue for resolution is whether the land subject of this case had been reclassified as non-
agricultural as early as 1981, that is, prior to the effectivity of the CARL and, therefore, exempt from
its coverage.

Our Ruling

At the outset, it must be pointed out that the determination of the issue presented in this case
requires a review of the factual findings of the DAR, of the Office of the President and of the CA.

It is well settled that in a petition for review on certiorari under Rule 45 of the Rules of Court, only
questions of law may be raised.36 This Court, in numerous instances, has had occasion to explain
that it is not its function to analyze or weigh evidence all over again.37 As a rule, the Court respects
the factual findings of the CA and of quasi-judicial agencies like the DAR, giving them a certain
measure of finality.38 There are, however, recognized exceptions to this rule, one of which is when
the findings of fact are conflicting.

The records of this case show that each of the agencies which rendered a ruling in this case – from
the DARAB local office to the CA – arrived at different findings and conclusions, with each body
overturning the decision of the one before it. Thus, due to the divergence of the findings of the
DARAB local office on the one hand, and the DARAB Central Office on the other, and considering
the conflicting findings of former DAR Secretaries and the disparity between the findings of fact of
the Office of the President and of the CA, we are constrained to re-examine the facts of this case
based on the evidence presented by both parties.

After an assiduous review of the records of this case, this Court concludes that petitioners’ land is
outside the coverage of the agrarian reform program.

At the core of the present controversy is Resolution No. 139, later on enacted as Ordinance No. 21,
series of 1981 by the Sangguniang Bayan of Calapan, Oriental Mindoro at its regular session on 14
April 1981 and subsequently amended at its special session of 20 October 1981.39 Ordinance No. 21
revised the comprehensive zoning regulations of the then Municipality of Calapan. Article III, Section
3, No. 7 of the ordinance provides:

I-1 Zone

Light intensity industrial zone are the following:

All lots 100 meters deep west and 200 meters deep east of Sto. Niño-Lumangbayan-Sapul Road
from the Teachers’ Village Subdivision to Barangay Guinobatan.40

Petitioners maintain that their landholding falls within the area classified as light intensity industrial
zone, as specified in the afore-quoted provision of the ordinance. Respondents, on the other hand,
insist otherwise. The settlement of this issue is crucial in determining whether the subject
landholding is within or outside the coverage of the CARL.
Section 4 of RA No. 6657 states that the coverage of the CARL is as follows:

SEC. 4. Scope. – The Comprehensive Agrarian Reform Law of 1989 shall cover, regardless of
tenurial arrangement and commodity produced, all public and private agricultural lands as provided
in Proclamation No. 131 and Executive Order No. 229, including other lands of the public domain
suitable for agriculture.

More specifically, the following lands are covered by the Comprehensive Agrarian Reform Program:

(a) All alienable and disposable lands of the public domain devoted to or suitable for
agriculture. x x x;

(b) All lands of the public domain in excess of the specific limits as determined by Congress
in the preceding paragraph;

(c) All private lands devoted to or suitable for agriculture regardless of the agricultural
products raised or that can be raised thereon. (Emphasis supplied)

"Agricultural land" is defined under Section 3(c) of the CARL as that which is "devoted to agricultural
activity x x x and not classified as mineral, forest, residential, commercial or industrial land."

The meaning of "agricultural lands" covered by the CARL was explained further by the DAR in its AO
No. 1, Series of 1990, dated 22 March 1990, entitled "Revised Rules and Regulations Governing
Conversion of Private Agricultural Land to Non-Agricultural Uses," issued pursuant to Section 4941 of
the CARL.42 Thus:

Agricultural land refers to those devoted to agricultural activity as defined in RA 6657 and not
classified as mineral or forest by the Department of Environment and Natural Resources (DENR)
and its predecessor agencies, and not classified in town plans and zoning ordinances as approved
by the Housing and Land Use Regulatory Board (HLURB) and its preceding competent authorities
prior to 15 June 1988 for residential, commercial or industrial use. (Emphasis supplied)43

It is clear from the last clause of the afore-quoted provision that a land is not agricultural, and
therefore, outside the ambit of the CARP if the following conditions concur:

1. the land has been classified in town plans and zoning ordinances as residential, commercial or
industrial; and

2. the town plan and zoning ordinance embodying the land classification has been approved by the
HLURB or its predecessor agency prior to 15 June 1988.

It is undeniable that local governments have the power to reclassify agricultural into non-agricultural
lands.44 Section 345 of RA No. 2264 (The Local Autonomy Act of 1959) specifically empowers
municipal and/or city councils to adopt zoning and subdivision ordinances or regulations in
consultation with the National Planning Commission.46 By virtue of a zoning ordinance, the local
legislature may arrange, prescribe, define, and apportion the land within its political jurisdiction into
specific uses based not only on the present, but also on the future projection of needs.47 It may,
therefore, be reasonably presumed that when city and municipal boards and councils approved an
ordinance delineating an area or district in their cities or municipalities as residential, commercial, or
industrial zone pursuant to the power granted to them under Section 3 of the Local Autonomy Act of
1959, they were, at the same time, reclassifying any agricultural lands within the zone for non-
agricultural use; hence, ensuring the implementation of and compliance with their zoning
ordinances.48

The regulation by local legislatures of land use in their respective territorial jurisdiction through
zoning and reclassification is an exercise of police power.49 The power to establish zones for
industrial, commercial and residential uses is derived from the police power itself and is exercised for
the protection and benefit of the residents of a locality.50 Ordinance No. 21 of the Sangguniang
Bayan of Calapan was issued pursuant to Section 3 of the Local Autonomy Act of 1959 and is,
consequently, a valid exercise of police power by the local government of Calapan.

The second requirement – that a zoning ordinance, in order to validly reclassify land, must have
been approved by the HLURB prior to 15 June 1988 – is the result of Letter of Instructions No. 729,
dated 9 August 1978. According to this issuance, local governments are required to submit their
existing land use plans, zoning ordinances, enforcement systems and procedures to the Ministry of
Human Settlements – one of the precursor agencies of the HLURB – for review and ratification.51

Ordinance No. 21 was based on the Development Plan for the then Municipality of Calapan and on
the Zone District Plan prepared by its Municipal Development Staff. The Plans were adopted by the
Sangguniang Bayan of Calapan through a Resolution on 14 April 1980.52 The same were granted
approval by the HLURB through Resolution No. R-39-4, series of 1980, dated 31 July 1980.53

Based on the foregoing, there is no doubt that Ordinance No. 21 validly reclassified the area
identified therein as "100 meters deep west and 200 meters deep east of Sto. Niño-Lumangbayan-
Sapul Road from the Teachers’ Village Subdivision to Barangay Guinobatan" into a light intensity
industrial zone, making the same exempt from CARL coverage.

The next – and more crucial – question to be settled now is whether or not petitioners’ landholding
falls within the reclassified zone, thereby taking it out of the coverage of the CARL.

In resolving the issue in the affirmative, former DAR Secretary Pagdanganan relied primarily on the
respective Certifications issued by the Office of the Deputized Zoning Administrator, Urban Planning
and Development Department of Calapan City54 and by the Housing and Urban Development
Coordinating Council (HUDCC),55 and considered subject property as having "been zoned as light-
industrial prior to the enactment of the Comprehensive Agrarian Reform Program." Secretary
Pagdanganan consequently granted petitioners’ application for exemption pursuant to DAR AO No.
6, Series of 1994.56 This issuance was released by the DAR following DOJ Opinion No. 44, Series of
1990,57 wherein the Secretary of the DOJ opined that "with respect to conversions of agricultural
lands covered by RA 6657 to non-agricultural uses, the authority of the DAR to approve such
conversions may be exercised from the date of the law’s effectivity on June 15, 1998." Thus, AO No.
6 states that "all lands that were already classified as commercial, industrial or residential before 15
June 1988 no longer need any conversion clearance." Designed "to streamline the issuance of
exemption clearances, based on DOJ Opinion No. 44," the AO laid down the procedure and
guidelines for the issuance of exemption clearances58 for landowners whose lands are covered by
DOJ Opinion No. 44, Series of 1990 and desire to obtain an exemption clearance from the DAR.
Such exemption clearance does not mean that the DAR Secretary is exempting the land from CARL
coverage, with the implication that the land was previously covered; it simply means that the CARL
itself has, from the start, excluded the land from CARL coverage, and the DAR Secretary is only
affirming such fact.

The exemption order of Secretary Pagdanganan found petitioners’ application to have fully complied
with the documentary requirements for exemption set forth under AO No. 6, the more important of
which are the Certifications from the Deputized Zoning Administrator and the HUDCC stating that
petitioners’ property falls within the Light Intensity Industrial Zone of Calapan City.

Incidentally, what AO No. 6 requires is a certification from the HLURB. Although what petitioners
submitted was a certification from the HUDCC, Secretary Pagdanganan apparently considered the
same as sufficient compliance with the requirements of AO No. 6 and in fact never referred to the
certification as coming from the HUDCC but was consistently identified as "certification from the
HLURB" throughout his order. We see nothing irregular in this considering that the HLURB is an
agency under the HUDCC59 and especially since the Certification of the HUDCC is itself "based on
the Zoning Ordinance approval by HLURB Resolution No. R-39-4 dated 31 July 1980."

In contrast to the exemption order issued by Secretary Pagdanganan, the resolution and order,
respectively, of OIC Secretaries Ponce and Pangandaman – which the CA cited with approval –
relied mainly on certifications declaring that the property is irrigated or has a slope of below 18% and
on an ocular inspection report stating that the property is generally covered with rice and that the
surrounding areas are still agricultural, as bases for their conclusion that subject land is agricultural
and, therefore, covered by the CARL. These matters, however, no longer bear any significance in
the light of the certifications of the Deputized Zoning Administrator and the HUDCC testifying to the
non-agricultural nature of the landholding in question.

The CARL, as amended, is unequivocal that only lands devoted to agricultural activity and not
classified as mineral, forest, residential, commercial or industrial land are within its scope. Thus, the
slope of the land or the fact of its being irrigated or non-irrigated becomes material only if the land is
agricultural, for purposes of exempting the same from the coverage of the agrarian law. However, if
the land is non-agricultural – as is the case of the property here under consideration – the character
and topography of the land lose significance.

It must likewise be emphasized that, since zoning ordinances are based not only on the present, but
also on the future projection of needs of a local government unit, when a zoning ordinance is
passed, the local legislative council obviously takes into consideration the prevailing conditions in the
area where the land subject of reclassification is situated. Accordingly, when the then Sangguniang
Bayan of Calapan enacted Ordinance No. 21, there is reasonable ground to believe that the district
subject of the reclassification, including its environs, was already developing. Thus, as found by the
Office of the President: "we find that the area where subject property is situated was really intended
to be classified not as agricultural, as in fact it was declared as a residential, commercial and
institutional in 1998."60

The CA, agreeing with the finding of OIC Secretary Pangandaman, and quoting from the OIC
Secretary’s order, held that the Certification of the HUDCC "proved that the property is still
agricultural."

A careful scrutiny of the aforementioned certification reveals, however, that contrary to the findings
of OIC Secretary Pangandaman and the CA, the certification, in fact, proves that petitioners’ land
falls within the area classified as light intensity industrial zone. Quoted hereunder are the pertinent
portions of the certification:

This is to certify that a parcel of land with a total area of 1,587,713 square meters and situated at
Brgy. Guinobatan, Calapan City, Oriental Mindoro, a portion of which is approximately 1,537,713
square meters is applied for Zoning Certification as shown in the vicinity map submitted by the
applicant appears to be within the LIGHT INDUSTRIAL ZONE (100 meters deep west and 200
meters deep east) of the Provincial Road and the rest is AGRICULTURAL ZONE based on the
Zoning Ordinance approval by HLURB Resolution No. R-39-4 dated 31 July 1980. (Emphasis
supplied)

Submitted Transfer Certificate of Title described as:

TCT NO. LOT NO. AREA (sq.m.) REGISTERED OWNER

J-7205 612 1,531,713 (sic) Luis A. Luna, et al.

x x x x61

Based on the foregoing, 1,537,713 square meters (sq. ms.) out of the 1,587,713 sq. ms. total area of
petitioners’ property have been zoned as light industrial and only 50,000 sq. ms. apparently remain
agricultural. Considering, however, the certification of the Deputized Zoning

Administrator of the Urban Planning and Development Department of Calapan City, this Court finds
and so holds that the entire landholding has been classified as light intensity industrial zone pursuant
to Ordinance No. 21.

The court is inclined to give more evidentiary weight to the certification of the zoning administrator
being the officer having jurisdiction over the area where the land in question is situated and is,
therefore, more familiar with the property in issue. Besides, this certification carried the presumption
of regularity in its issuance62 and respondents have the burden of overcoming this presumption.
Respondents, however, failed to present any evidence to rebut that presumption.

Accordingly, since specialized agencies, such as the HUDCC and the Office of the Deputized Zoning
Administrator tasked to determine the classification of parcels of land have already certified that the
subject land is industrial, the Court must accord such pronouncements great respect, if not finality, in
the absence of evidence to the contrary.63

Respondents insist that petitioners’ landholding is not included in the light intensity industrial zone
under Ordinance No. 21, yet, they never submitted any evidence to support their contention. No
maps, such as a zoning map or a land use map, clearly showing that petitioners’ property lies
outside the reclassified area were presented by respondents. Instead, what they presented were: (1)
a certification from the Provincial Irrigation Manager stating that several of the respondents were
listed as beneficiaries of the Calapan Dam Irrigators’ Association; (2) a certification from the
Municipal Agriculturist of Calapan declaring that the property is irrigated; (3) photographs of the
irrigation system covering the subject landholding; (4) a letter from the Chief of the Land
Management Service of the DENR Region IV stating that the entire 158.77 hectares of the land in
question falls under 18% slope;64 (5) photographs showing that the property is generally planted with
rice;65 and other documents which, however, do not prove nor support their claim that the property
has not been reclassified into non-agricultural use.

Respondents, however, did submit in the proceedings before then DAR OIC Secretary Ponce an
"approved survey plan" commissioned by the DAR allegedly "showing that only about 20 hectares or
so would be covered by" Ordinance No. 21. A copy of this plan was nevertheless not attached to the
records of this case thereby making it impossible for this Court to examine the same and draw its
own conclusions therefrom.

At any rate, as already adverted to above, the certification of the deputized zoning administrator
carries more weight by reason of his special knowledge and expertise and the matter under
consideration being under his jurisdiction and competence. He is, therefore, in a better position to
attest to the classification of the property in question.

The best evidence respondents could have presented was a map showing the metes and bounds
and definite delineations of the subject land. Since respondents failed to do so, this Court is bound to
rely on the certifications of the appropriate government agencies with recognized expertise on the
matter of land classification. Thus, through the certifications issued by the deputized zoning
administrator of Calapan City and by the HUDCC, petitioners were able to positively establish that
their property is no longer agricultural at the time the CARL took effect and, therefore, cannot be
subjected to agrarian reform.

A final note: In his Order dated 21 June 2006, then OIC Secretary Pangandaman made mention of a
"report" issued by the MARO of Calapan City claiming that the area covering 100 meters deep west
and 200 meters deep east along the provincial road traversing the property which was declared in
the HUDCC certification dated 8 October 1998 as light industrial has already been covered by
Presidential Decree No. 27.66 Thus, Secretary Pangandaman concluded, there were already vested
rights over the property and can no longer be covered by an application for exemption.

The records of this case, however, do not contain a copy of the aforementioned report.  Thus, the
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Court is unable to scrutinize the same and make a definite ruling thereon.

In any case, an examination of the records of this case show that the earliest document evidencing
coverage under the CARP of the land subject of this dispute is the published Notice of Land
Valuation and Acquisition dated 20 August 1998. Prior thereto, all documents in connection with the
compulsory acquisition of land for agrarian reform pertain to land covered by TCT No. T-18192 with
an area of 161 hectares, purportedly in the name of Mariquita A. Luna.67 Clearly, this land is different
from the land subject of this case which is covered by TCT No. J-7205 (T-54199). It may, therefore,
be reasonably presumed that the report adverted to refers to the land covered by TCT No. T-18192
and not to the property under consideration herein.

The Office of the President was, consequently, correct when it revoked the resolution and order,
respectively, of former OIC Secretaries Ponce and Pangandaman and declared that the Order of
then Secretary Pagdanganan was more in accord with the facts and the law applicable to the case at
bar. Thus, the CA clearly erred when it held that the findings and conclusion of the Office of the
President are not supported by substantial evidence.

WHEREFORE, the Court GRANTS the petition and REVERSES and SETS ASIDE the Decision
dated 13 March 2009 and the Resolution dated 10 June 2009 of the Court of Appeals in CA-G.R.
SP. No. 101114. The Decision of the Office of the President dated 15 December 2006 is hereby
REINSTATED.

SO ORDERED.