G.R. No.

163598, August 12, 2015

AGRARIAN REFORM BENEFICIARIES ASSOCIATION (ARBA), AS REPRESENTED

BY ISAIAS "ACE" NICOLAS IN HIS CAPACITY AS PRESIDENT, VIOLETA
BATADHAY, JESUS F. DANAO, DOMINADOR RIOSA, EVA I. FLORIDO, VIRGINIA
CARIAS, WILLIAM D. DORONELA, ELSA MENGOLIO, FEDELINA AMENGYAO,
REBECCA REBAMBA, MELANI CADAG, SOFRONIA SABORDO, MYRNA SANTIAGO,
JOSELYNDA MANALANZAN, NORA I. REBUZANO, NATIVIDAD PLACIDO,
ALGERICO L. GAEGUERA, RUBEN G. ACEBEDO, MARGIE M. VALDEZ, HELEN S.
BUNI, EMELINDA FERNANDEZ, JULIETA J. AVENGONZA, VIOLETA C. ASIS,
CARINA C. CABRERA, EDUARDO M. DILAY, SIMEONA V. ROLEDA, EVELYN
SANTO ELEUTERIA A. NOLASCO, TERESA CRUZ, MELBA ABRENICA, BESAME
VILLACORTA, ROSALINA HERNANDEZ, VERONICA DOMULOT, LUCIA SOUN,
ILUMENADA RONQUILLO, REGINA LOPEZ, AMPARO GREY, HIPOLITO MANDAO,
JUAN DELA VEGA, PRESCILIANA LLEMIT, LEBERETA IGNACIO, FRANCISCO
VALDEMOR, Petitioners, v. FIL-ESTATE INC., PROPERTIES, Respondent.

[G.R. NO. 164660]

THE DEPARTMENT OF AGRARIAN REFORM ADJUDICATION BOARD (DARAB),

AGRARIAN REFORM BENEFICIARIES, INC., ET AL., Petitioners, v. KINGSVILLE
CONSTRUCTION AND DEVELOPMENT CORP. AND JOHNSON ONG, Respondents.

[G.R. NO. 164779] cralawrednad

AGRARIAN REFORM BENEFICIARIES ASSOCIATION (ARBA), VIOLETA

BATADHAY, NATIVIDAD PLACIDO, JESUS F. DANAO, EVA I. FLORIDO,
VIRGINIA CARIAS, WILLIAM D. DORONELA, ELSA MENGOLIO, ROBERTO ISIP,
REBECCA REBAMBA, SOFRONIA SABORDO, MYRNA SANTIAGO, JOSELYNDA
MANALANZAN, NORA I. REBUZANO, ALGERICO L. GALQUERA, RUBEN G.
ACEBEDO, MARGIE M. VALDEZ, HELEN S. BUNI, JULIETA J. AVENGONZA,
VIOLETA C. ASIS, CARINA C. CABRERA, EDUARDO M. DILAY, ELEUTERIA A.
NOLASCO, TERESA CRUZ, MELBA ABRENICA, VERONICA DOMULOT, LUCIA SUN,
ILUMENADA RONQUILLO AND PRESCILIANA LLEMIT, Petitioners, v. KINGSVILLE
CONSTRUCTION AND DEVELOPMENT CORPORATION AND
JOHNSONONG, Respondent.

DECISION

JARDELEZA, J.:

The Case

Before us are three consolidated petitions for review on certiorari under Rule 45 of the
Revised Rules of Court filed by members of the Agrarian Reform Beneficiaries
Association (ARBA).1 G.R. No. 164660 and G.R. No. 164779 were filed against Kingsville
Construction & Development Corporation (Kingsville) and Johnson Ong.2 G.R. No.
163598 was tiled against Fil-Estate Properties, Inc. (FEPI).

G.R. No. 164660 and G.R. No. 164779 question the resolution of the Sixteenth
Division3 of the Court of Appeals in CA G.R. SP No. 82322, which granted Kingsville's
and Ong's petition for certiorari, and its order denying petitioners' motion for
reconsideration. G.R. No. 163598, on the other hand, questions the decision of the
Sixth Division4 of the Court of Appeals in CA G.R. SP No. 70717, which granted FEPI's
petition for review under Rule 43 of the Revised Rules of Court, and its resolution
denying petitioners' motion for reconsideration.

FACTS

Respondents Kingsville and FEPI are the owner and developer, respectively, of Forest
Hills Residential Estates Phase I in Brgy. San Isidro, Antipolo, Rizal, with an area of
75.85978 hectares. The land subject of these cases is a portion thereof, described as
Lot No. "E," covered by TCT No. 164298, in the names of Raul Boncan, et al. and
having an area of 136, 501 square meters.5 Respondent Ong is the President of
Kingsville.6

In March 1996, ARBA, as represented by its president, together with its

members,7 (hereafter referred to as "petitioners") filed before the Office of the Regional
Agrarian Reform Adjudicator (RARAD) of the Department of Agrarian Reform
Adjudication Board (DARAB) Region IV a complaint for maintenance of peaceful
possession with prayer for preliminary injunction and/or temporary restraining order
(TRO) against respondents.8   Petitioners alleged that they are the actual
occupants/farmers of the land. Between the 1950s and the 1980s, they entered the
premises, established residence, and cleared and cultivated the same by virtue of the
Green Revolution Program9 of former President Ferdinand Marcos. On March 6, 1996,
however, petitioners claimed that respondents caused the bulldozing and leveling of the
mountains in the area and the dumping of earth in the creek.

Respondents filed a motion to dismiss the complaint on the ground of lack of

jurisdiction. They argued that jurisdiction lies with the civil courts and not with the
DARAB because petitioners are squatters and not agricultural tenants. Since the land is
titled and declared for taxation purposes, the assertion of petitioners that they have
been in possession of it between the 1950s and 1980s indicated bad faith. Respondents
insisted that nobody installed petitioners as tenants in the land, as in fact, there was no
claim in their complaint that there was a tenancy relationship between them and
respondents, nor with the previous owners of the land.10 cralawrednad

Respondents also argued that the land is within the Lungsod Silangan Townsite, which,
under Department of Justice Opinion No. 181, is a townsite reservation outside the
coverage of the Comprehensive Agrarian Reform Program (CARP) pursuant to
Presidential Proclamations No. 1283 and 1635.11 cralawrednad

Regional Adjudicator Fe Arche-Manalang denied respondents' motion to dismiss in an

order dated September 11, 1997.12 She held that the grounds cited by respondents in
their motion to dismiss, pertaining to the status of complainants as mere squatters and
to the jurisdiction of the DARAB, were evidentiary in nature better resolved with the
substantive issues of the case.

Respondents moved tor reconsideration, which the succeeding Regional Adjudicator,

Conchita Minas, granted via an order dated September 8, 1998.13 Regional Adjudicator
Minas held petitioners with their admission that the land is located within the area
reserved as Townsite of Lungsod Silangan by virtue of Presidential Proclamation No.
1637. She also cited Natalia Realty Inc. v. DAR,14 which has held that land located
within the Lungsod Silangan Townsite has been converted to residential use. The land
not being agricultural, Regional Adjudicator Minas held that the DARAB did not acquire
jurisdiction over the subject matter of petitioners' complaint.

Petitioners appealed before the DARAB (DARAB Case No. 7829). On January 11, 2001,
the DARAB in a decision held that the land is classified as agricultural, as borne out by
the records and the certification of the Municipal Agrarian Reform Office (MARO) of the
Municipality of Antipolo. The DARAB further held that as actual farmworkers who began
occupying and cultivating the land between the 1950s and 1980s, petitioners deserve
to peacefully maintain their possession as qualified beneficiaries under Section 22 of
CARP. The dispute between the parties, being agrarian, was therefore within the
jurisdiction of the DARAB.15
cralawrednad

The DARAB also declared that while the land ts included in the reserved townsite, not
every inch of it is reserved tor the construction of houses. A holistic approach must be
taken, in that a townsite would also necessarily include areas classified as "commercial,
residential, forestal [sic], educational, parks and agricultural." The DARAB reversed the
Order of the PARAD and directed respondents to maintain petitioners in peaceful
possession and cultivation of the land and to cease from further developing the same. It
also directed the MARO of Antipolo, Rizal to place the land under the coverage of the
CARP and to issue the corresponding Certificates of Land Ownership Award (CLOA) to
petitioners.16 The fallo of the DARAB's decision reads:
ChanRoblesvirtualLawlibrary

WHEREFORE, premises considered, the Order dated September 8, 1998 is hereby

REVERSED and SET ASIDE. New judgment is rendered: ChanRoblesvirtualLawlibrary

1. Directing Respondents-Appellees and/or any of their representatives or agents acting

in their behalf to maintain Complainants-Appellants in peaceful possession and
cultivation of subject landholding.

2. Directing Respondents-Appellees to cease from further introducing bulldozing or

development activities on the subject landholding; and

3. Directing the Municipal Agrarian Reform Officer (MARO) of Antipolo, Rizal to place the
subject landholding under the coverage of the CARP and to issue the corresponding
CLOA to Complainants-Appellants as prescribed by R.A. 6657 and the rules and
regulations of the DAR.

SO ORDERED.17

Respondents filed a motion for reconsideration, which the DARAB denied in a resolution
dated April 23, 2002. The DARAB ruled that even granting that the land is covered by
the Department of Justice Opinion No. 181 as part of the Lungsod Silangan Townsite
and therefore beyond the coverage of CARP, respondents must still comply with the
requirement for conversion provided by law. There is no automatic conversion of an
agricultural to non-agricultural uses absent such exemption or conversion order issued
by DAR.18cralawrednad
On May 31, 2002, respondent FEPI appealed to the Court of Appeals under Rule 43, in a
petition docketed as CA G.R. No. 70717. FEPI prayed for: (1) the reversal of the
decision of the DARAB dated January 11, 2001 and its resolution dated April 23, 2002
and (2) dismissal of petitioners' complaint before the RARAD.19 cralawrednad

On June 2, 2002, respondents Kingsville and Ong filed a petition for certiorari before
the Court of Appeals, docketed as CA G.R. SP No. 71055. Kingsville and Ong also
prayed for the reversal of the decision of the DARAB dated January 11, 2001 and its
resolution dated April 23, 2002, and the consequent dismissal of petitioners' complaint
before the RARAD.20 cralawrednad

On June 20, 2002, the Special Seventh Division* of the Court of Appeals dismissed the
petition for being a wrong mode of appeal and for having a defective verification and
certification against forum-shopping. The Court of Appeals also ruled that even if it
would treat the petition as one under Rule 43, which was the correct mode of appeal, it
would still warrant a dismissal for having been filed out of time.21 The Court of Appeals
also denied Kingsville's and Ong's motion for reconsideration in a resolution issued on
August 1, 2002.22 cralawrednad

On appeal before us (G.R. No.155118), we ordered the dismissal of CA G.R. SP No.

71055. Our order attained finality on February 5, 2003.23 cralawrednad

On October 22, 2003, the Court of Appeals Sixth Division in CA G.R. No. 70717
rendered a decision reversing the DARAB's decision and resolution and reinstating the
RARAD's order dismissing petitioners' complaint. The Court of Appeals ruled that Letter
of Instruction No. 625 issued on November 9, 1977 in relation to Presidential
Proclamation No. 1637, already reclassified the land as residential. It cited Natalia
Realty, Inc. v. DAR, where we found that Presidential Proclamation No. 1637 set aside
20, 132 hectares of land in the Municipalities of Antipolo, San Mateo and Montalban,
Rizal to absorb the population overspill in the metropolis. These areas were designated
as the Lungsod Silangan Townsite in which the land is located. The Court of Appeals
also ruled that petitioners are not bonafide tenants of the subject property as there was
neither consent from the landowner nor evidence of sharing of harvests.24 cralawrednad

Petitioners filed a motion for reconsideration, arguing that FEPI's rights over the land
are merely derived from and dependent on Kingsville's, which is its owner. FEPI's rights
cannot therefore rise higher than the stream, and as such, the final ruling in CA G.R. SP
No. 71055 against Kingsville should also bind FEPI.25 cralawredcralawrednad

On May 6, 2004, the Court of Appeals denied petitioners' motion for reconsideration.26 cralawrednad

Meanwhile, in view of the finality of G.R. No. 155118, petitioners filed a motion for
execution before the DARAB, which the Board granted.27  Respondents then filed
separate motions for reconsideration, arguing that the decision of the DARAB sought to
be executed has not yet attained finality and has, in fact, been reversed and set aside
in CA G.R. No. 70717. With the reversal of the DARAB's decision, there was nothing left
to execute. FEPI, in particular, insisted that the favorable decision in CA G.R. No. 70717
is also applicable to Kingsville, whose interest is so interwoven with and inseparable
from FEPI's.28
cralawrednad
The DARAB denied the twin motions of respondents in a resolution dated February 6,
2004. The Board cited the proviso in Section 1, Rule XIV of the DARAB New Rules of
Procedure which states that notwithstanding an appeal to the Court of Appeals, the
decision of the Board appealed from shall be immediately executory pursuant to Section
50 of RA No. 6657.29  Thus, on February 17, 2004, the DARAB issued a writ of
execution ordering the regional sheriff of the DARAB-Region IV to carry out the decision
of the Board dated January 11, 2001.30 cralawrednad

FEPI thereafter filed an urgent motion for the issuance of a TRO and/or writ of
preliminary injunction before the Court of Appeals in CA G.R. SP No. 70717. FEPI
argued that the impending execution of the DARAB's January II, 200 I Decision is
manifestly illegal, considering that it has already been reversed and set aside by the
Court of Appeals. FEPI emphasized that the cited proviso in the DARAB's Rules of
Procedure pertains to executions pending appeal and does not apply where an appeal
from the Board's decision has already been resolved and reversed.31 cralawrednad

Granting FEPI's motion, the Court of Appeals in CA G.R. No. 70717 issued a TRO
effective for sixty (60) days, enjoining the DARAB from implementing and enforcing its
January 11, 2001 decision in DARAB Case No. 7829. The Court of Appeals ruled that
unless restrained, the DARAB will include the subject land for CARP coverage despite
the Court of Appeals' express finding in its October 22, 2003 decision that said land has
already been declared and legally classified as residential.32 The Court of Appeals
stated:ChanRoblesvirtualLawlibrary

It appearing that the petitioner will suffer grave injustice and irreparable injury from
the DARAB's immediate enforcement and execution of its Decision dated January 11,
2001 and in order that the above-entitled case may not be rendered moot and
academic, a TEMPORARY RESTRAINING ORDER effective for SIXTY (60) days is
hereby issued, enjoining the DARAB from implementing and enforcing
its Decision dated January 11, 2001 in the said DARAB Case No. 7829 (Reg. Case No.
IV-RI-015-96).33 cralawrednad

xxx

Thereafter, in view of the impending expiration of the TRO, FEPI filed an urgent motion
before the Court of Appeals in CA G.R. No. 70717 to resolve its application for writ of
preliminary injunction.34 On May 6, 2004, the Court of Appeals, as already adverted to
above, issued a resolution denying petitioners' motion tor reconsideration. It also went
on to say: ChanRoblesvirtualLawlibrary

With the denial of the Motion for Reconsideration, the resolution of the petitioner's
urgent motion for application for writ of preliminary injunction which was filed pending
resolution of the Motion for Reconsideration, is no longer necessary.

SO ORDERED.35

On March 14, 2004, Kingsville filed a petition for certiorari before the Court of Appeals
(CA G.R. No. 82322) seeking to annul and set aside the writ of execution issued by the
DARAB and its January 11, 2001 decision and April 23, 2002 resolution reversing the
dismissal of the Regional Adjudicator and denying Kingsville's motion for
reconsideration, respectively:16 cralawrednad

On June 10, 2004, the Court of Appeals granted the petition. The Court of Appeals ruled
that the DARAB has no jurisdiction over the subject matter of the suit because it is not
an agrarian dispute, there being no tenancy relationship between petitioners and
respondents. Citing Natalia Realty, Inc. v. DAR,37 the Court of Appeals also ruled that
the inclusion of the land within the Lungsod Silangan Townsite meant that the areas
therein have been effectively converted from agricultural to non-agricultural and
reclassified into residential. Though some areas remain undeveloped, these are still
residential or commercial lands by reason of the conversion prior to June 15, 1998
when the Comprehensive Agrarian Reform Law (CARL) took effect. Hence, the subject
property is outside the ambit of CARP. The Court of Appeals concluded that the DARAB
erred in taking cognizance of the case. In view of the DARAB's lack of jurisdiction over
the subject matter of the case, its decision is void and the principle on res judicata does
not apply.38 cralawrednad

Petitioners filed a motion for reconsideration of the above decision of the Court of
Appeals, which was also denied in a resolution dated July 29, 2004. The Court of
Appeals ruled that there are established principles and case law holding that the
extraordinary remedy of certiorari is always available to address situations where a
judgment rendered by a court bereft of jurisdiction over the subject matter of the case
had attained finality, though the remedy of appeal was lost through error in the choice
of remedies and other procedural lapses.39 cralawrednad

Hence, these consolidated petitions filed by members of ARBA.

ISSUES

The issues raised by the consolidated petitions can be summarized as follows: ChanRoblesvirtualLawlibrary

I. Whether or not the DARAB has jurisdiction over the subject matter of the case
between the parties.

A. Whether or not a tenancy relationship existed between the parties.

B. Whether or not a conversion order from DAR is still necessary,

notwithstanding the exemption granted over a land from the coverage of
CARP.

C. Whether or not the TRO issued by the Court of Appeals in CA G.R. No.
70717 was improper.

II. Whether or not the dismissal of CA G.R. No. 71055 constitutes res judicata.

III. Whether or not respondents are guilty of forum-shopping in instituting CA G.R.

70717, CA G.R. 71055 and CA G.R. No. 82322.
 A. Whether or not the Court of Appeals Sixth Division was duty bound to
dismiss the petition in CA G.R. No. 70717 after having been informed of
the pendency of CA G.R. No. 71055.

B. Whether or not FEPI and Kingsville can raise different appeals

independently.

OUR RULING

On the issue of res judicata anti jurisdiction of the DARAB

Petitioners fault the Court of Appeals in CA G.R. No. 82322 for entertaining the petition
filed by respondent Kingsville on the ground that the latter is re-litigating the same
issues raised in CA G.R. No. 71055. CA G.R. No. 71055 was dismissed because
Kingsville availed of a wrong remedy via Rule 65 instead of Rule 43, and because of a
defective verification. Petitioners, citing Bernarte v. Court of Appeals,40 contend that
while this dismissal is grounded on procedural flaws, the same is an adjudication on the
merits constituting res judicata.

Relatedly, petitioners argue that because of the dismissal of CA G.R. No. 71055,
respondents have lost their right to appeal the decision of the DARAB. As such, said
decision has become final and conclusive between the parties.

Res judicata refers to the rule that a final judgment or decree on the merits by a court
of competent jurisdiction is conclusive of the rights of the parties or their privies in all
later suits on all points and matters determined in the former suit.41 cralawrednad

The elements of res judicata, which must all exist for the principle to apply, are as
follows: (1) the former judgment or order must be final; (2) the judgment or order
must be on the merits; (3) it must have been rendered by a court having jurisdiction
over the subject matter and the parties; (4) there must be, between the first and the
second action, identity of parties, of subject matter and cause of action.42 cralawrednad

We find, however, that answering the question of whether or not the filing of CA G.R.
No. 82322 is barred by res judicata will necessarily touch upon the pivotal question of
whether or not the DARAB, in the first place, has jurisdiction over the subject matter of
the case between the parties. We rule that it does not. Thus, the principle of res
judicata finds no application in this case.

The jurisdiction of the DARAB is limited under the law. It was created under Executive
Order (E.O.) No. 129-A to assume powers and functions with respect to the
adjudication of agrarian reform cases under E.O. No. 229 and E.O. No. 129-
A.43 Sections 1 and 2, Rule II of the DARAB New Rules of Procedure, which was adopted
and promulgated on May 30, 1994 and came into effect on June 21, 1994, identify the
extent of the DARAB's, the RARAD's and the PARAD's jurisdiction, as they read: ChanRoblesvirtualLawlibrary

SECTION 1. Primary and Exclusive Original and Appellate Jurisdiction.  - The Board shall
have primary and exclusive jurisdiction, both original and appellate, to determine and
adjudicate all agrarian disputes involving the implementation of the Comprehensive
Agrarian Reform Program (CARP) under Republic Act No. 6657, Executive Order Nos.
228, 229 and 129-A, Republic Act No. 3844 as amended by Republic Act No. 6389,
Presidential Decree No. 27 and other agrarian laws and their implementing rules and
regulations. x x x

SECTION 2. Jurisdiction of the Regional and Provincial Adjudicator.  - The RARAD and
the PARAD shall have concurrent original jurisdiction with the Board to hear, determine
and adjudicate all agrarian cases and disputes, and incidents in connection therewith,
arising within their assigned territorial jurisdiction.44

The jurisdiction of the PARAD and the DARAB is only limited to cases involving agrarian
disputes, including incidents arising from the implementation of agrarian laws. Section
3 (d) of R.A. No. 6657 defines an agrarian dispute in this wise: ChanRoblesvirtualLawlibrary

xxx

(d) Agrarian dispute refers to any controversy relating to tenurial arrangements,

whether leasehold, tenancy, stewardship or otherwise, over lands devoted to
agriculture, including disputes concerning farmworkers' associations or representation
of persons in negotiating, fixing, maintaining. changing or seeking to arrange terms or
conditions of such tenurial arrangements. It includes any controversy relating to
compensation of lands acquired under R.A. 6657 and other terms and conditions of
transfer of ownership from landowners to farmworkers, tenants and other agrarian
reform beneficiaries, whether the disputants stand in the proximate relation of farm
operator and beneficiary, landowner and tenant, or lessor and lessee.45

In order for the DARAB and the RARAD to have jurisdiction over the case, therefore, a
tenurial arrangement or tenancy relationship between the parties must exist. In
determining tenancy relations between the parties, it is a question of whether or not a
party is a de jure tenant. The essential requisites of a tenancy relationship are: (1) the
parties are the landowner and the tenant; (2) the subject is agricultural land; (3) there
is consent; (4) the purpose is agricultural production; (5) there is personal cultivation;
and (6) there is sharing of harvests. All these requisites are necessary to create a
tenancy relationship between the parties. The absence of one does not make an
occupant, cultivator, or a planter, a de jure tenant. Unless a person establishes his
status as a de jure tenant, he is not entitled to security of tenure nor is he covered by
the Land Reform Program of the government under existing tenancy laws.46 cralawrednad

Petitioners' complaint before the RARAD shows that its material allegations fail to state
a tenurial arrangement or tenancy relationship between the parties. The complaint
reads in part:ChanRoblesvirtualLawlibrary

Comes, now complainants by counsels and unto this Honorable Adjudicator most
respectfully states [sic]: ChanRoblesvirtualLawlibrary

xxx

3. That the subject landholding is an agricultural land as evidenced by Certification from

the Municipal Agricultural Officer (MAO) of Antipolo, Rizal, which is marked as Annex
"A" and made an integral part of this complaint;
4. That the complainants are the actual occupants/tillers and or farmers of a certain
agricultural landholding consisting an area of 73 hectares more or less, located at Sitio
Inalsan and Sitio Tagumpay, Brgy. Bagong Nayon, Antipolo, Rizal, which is now being
bulldozed and developed by the respondents, causing grave and irreparable damgge
[sic] on all the improvements introduced by herein complainants;

5. That complainants entered the premises of said land to which they caused the
clearing out of the area and cultivation of the same since 1950s and others 1980s by
virtue of General Order No. 34 (Green Revolution Program) during President Marcos
regime;

6. That complainants through laborious efforts have introduced various improvements

on the said land such as fruit bearing trees and rootcrops, [sic] and had in fact
established their permanent residence on the same, x x x;

7. That in the morning of March 6, 1996 the once peaceful possession and cultivation of
herein complainants has been disturbed when some unidentified persons have caused
the bulldozing and levelling [sic] the mountain and dumping bulldozed earth, x x x,
which caused irreparable damage and destruction of about 80% of the existing fruit
trees thereon and other root crops. disregarding completely their peaceful possession
and cultivation x x x;

xxx

16. That due to the unlawful act of the respondent, herein complainants were greatly
deprived of their rightful share in the fruits of their labor as well as to a just share in
the fruits of the land they had been tilling as enunciated under Section 4 on Agrarian
and Natural Resources Reform, Art. XIII of the 1987 Philippine Constitution.

xxx

WHEREFORE. it is most respectfully prayed that after due hearing, a Preliminary

Injunction and or Temporary Restraining order be issued and forthwith to restrain the
respondents from doing the act herein complained of, and aftger (sic] trial said
injunction be made permanent with cost and such further orders that are just and
equitable in the premises.47 cralawrednad

xxx

While petitioners alleged themselves as the occupants and tillers of the subject land,
they did not allege that they have a tenurial arrangement or tenancy relationship either
with the respondents or with the registered landowners, and not even with anyone
purporting to be the landowner. Petitioners invoke General Order No. 34 as their license
to enter and cultivate the subject land. The fact remains, however, that under General
Order No. 34, utilization of empty or idle lots by an adjoining resident or individual may
only be made with the express consent of the owner, if he is in the area, or his implied
consent, if he cannot be located. Petitioners neither alleged that the respondents or
landowners consented to their cultivation of the subject land for agricultural production,
either expressly or impliedly; nor was there an allegation of any arrangement as to how
the harvests shall be shared between them. The conclusion then is that petitioners were
not the tenants of the respondents.
True, in its decision, the DARAB held: ChanRoblesvirtualLawlibrary

In as much as [sic] Complainants-Appellants have been occupying/cultivating the

subject landholding since the 1950's [sic] and 1980's [sic] to the present, they deserve
to be peacefully maintained and continue tilling the subject agricultural landholding as
qualified beneficiaries pursuant to Section 22 of Republic Act No. 6657, the 1988
Comprehensive Agrarian Reform Law. As held in the case of Heirs of Segundo Manuel,
represented by Magdalena de Manuel, et al. vs. Hon. Judge Marcial L. Fernandez, et al,.
GR. No. 93743, promulgated on June 29, 1992, the Hon. Supreme Court held that
"even non-tenant [sic] cannot anymore be ejected and has to be retained in his
possession and cultivation of the lands as tiller until after the DAR has determined
whether said tiller has rights thereof under the CARP relative to the land he is tilling."48

Nevertheless, that petitioners may have been actual occupants or tillers of the land,
which may make them potential CARP beneficiaries, does not give rise to a tenancy
relationship. As we held in Philippine Overseas Telecommunications Corporation v.
Gutierrez, et al.:49 cralawrednad

Neither the findings of the courts a quo nor the records themselves show any factual
determination of the third, fourth, and sixth requisites, namely, consent between the
parties to the relationship, the purpose of the relationship, which is agricultural
production, and sharing of harvests. The factual findings of the courts a quo at best
only point to the following: 1) respondents have been in possession of the land in
question for more than one year before the complaint for ejectment was filed; 2) the
land in question is subject to the compulsory acquisition scheme under existing agrarian
reform laws; 3) the respondents are farmers-tillers of the land; and 4) they are
"potential CARP beneficiaries." Regrettably, these factual findings fall short to convince
this Court of any tenancy relationship, and, hence, the DARAB does not have
jurisdiction over the present case. Jurisdiction lies with the regular courts.

Even if the respondents are indeed "potential CARP beneficiaries" as they so claim, it
does not follow that a tenancy relationship arises. Section 22 of Republic Act (R.A.) No.
6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988,
provides:ChanRoblesvirtualLawlibrary

Sec. 22. Qualified Beneficiaries. - The lands covered by the CARP shall be distributed as
much as possible to landless residents of the same barangay, or in the absence thereof,
landless residents of the same municipality in the following order of priority: ChanRoblesvirtualLawlibrary

(a) agricultural lessees and share tenants;

(b) regular farmworkers; (c) seasonal farmworkers; (d) other farmworkers;

(e) actual tillers or occupants of public lands;

(f) collectives or cooperatives of the above beneficiaries; and

(g) others directly working on the land.

 xxx

(Emphasis supplied)

It is clear from the aforequoted provisions that "agricultural lessees and share tenants"
comprise only one class of qualified beneficiaries. The petitioner is correct in pointing
out that even those who do not enjoy a tenancy relationship with the landowner can
become qualified beneficiaries.

Moreover, the DARAB overstepped its jurisdictional boundaries when it declared

petitioners as qualified beneficiaries under CARP. In Lercana v. Jalandoni,50 we ruled
that the identification and selection of CARP beneficiaries are matters involving strictly
the administrative implementation of the CARP, a matter exclusively cognizable by the
Secretary of the Department of Agrarian Reform, and beyond the jurisdiction of the
DARAB.51 cralawrednad

More importantly, there is no tenancy relationship or agrarian dispute between the

parties because the subject land is not agricultural. It has ceased to be so under
Presidential Proclamation No. 1637. The Court of Appeals in CA G.R. No. 82322 and CA
G.R. 70717 and the DARAB found that the land is included within the Lungsod Silangan
Townsite by virtue of Presidential Proclamation No. 1637, which took effect on April 18,
1977, thereby reclassifying said land from agricultural to residential. The interpretation
of the DARAB is that the inclusion of land in the townsite reservation does not mean
that it can be used for residential purposes only.

However, the case of Natalia Realty, Inc., v. DAR,52 has long held that lots included in
the Lungsod Silangan Townsite Reservation were intended exclusively for residential
use. They ceased to be agricultural lands upon approval of their inclusion in the
Lungsod Silangan Reservation by virtue of Presidential Proclamation No. 1637.

Contrary to the DARAB's conclusion, therefore, a conversion or exemption clearance

from the DAR would be superfluous. In Chamber of Real Estate and Builders
Associations, Inc. (CREBA) v. The Secretary of Agrarian Reform,53 we explained: ChanRoblesvirtualLawlibrary

It is different, however, when through Presidential Proclamations public agricultural

lands have been reserved in whole or in part for public use or purpose, i.e., public
school etc., because in such a case, conversion is no longer necessary. As held
in Republic v. Estonilo,54 only a positive act of the President is needed to segregate or
reserve a piece of land of the public domain for a public purpose. As such, reservation
of public agricultural lands for public use or purpose in effect converted the same to
such use without undergoing any conversion process and that they must be actually,
directly and exclusively used for such public purpose for which they have been
reserved, otherwise, they will be segregated from the reservations and transferred to
the DAR for distribution to qualified beneficiaries under the CARP.55 More so, public
agricultural lands already reserved for public use or purpose no longer form part of the
alienable and disposable lands of the public domain suitable for agriculture.56 Hence,
they are outside the coverage of the CARP and it logically follows that they are also
beyond the conversion authority of the DAR.

At any rate, the Court of Appeals in CA G.R. No. 82322 has found that as early as
January 1992, respondents have already been granted an exemption clearance by DAR
Undersecretary Renato B. Padilla. This clearance was granted on the basis of
certifications issued by the Lungsod Silangan Program Office and the ocular inspection
conducted by the Housing and Land Use Regulatory Board (HLURB). The ocular
inspection of the HLURB confirmed that respondents' landholding is within the
commercial zone of the said townsite reservation and within the General Area for Urban
Use per the Land Use Plan of the Lungsod Silangan. It further confirmed that
respondents' landholding is part of the Municipality of Antipolo's Zoning Ordinance No.
2, which was duly supported by Resolution No. 4 of the Sangguniang Bayan dated
February 11, 1982. Thus, the Municipality of Antipolo and the HLURB issued a
Development Permit57 and a License to Sell58, respectively, in favor of respondents.59 cralawrednad

Clearly, apart from Presidential Proclamation No. 1637, the zoning ordinance issued by
the Municipality of Antipolo, and approved by the Sangguniang Bayan and the HLURB,
also effectively reclassified and converted the subject land to non-agricultural. The
zoning ordinance was approved in 1982, way before the CARL took effect. We have
repeatedly ruled that lands already classified as commercial, industrial or residential
before the effectivity of the CARL, or June 15, 1988, are outside its coverage, and that
an order or approval from DAR converting the subject land from agricultural to
residential is no longer necessary.60 Only land classifications or reclassifications which
occur from June 15, 1988 onwards require conversion clearance from the DAR.61 cralawrednad

Prescinding from the foregoing, the DARAB does not have jurisdiction over the case and
its dismissal by the RARAD was correct. Consequently, DARAB's January 11, 2001
decision is null and void, including the writ of execution it issued on February 17, 2004.
The rule is that where there is want of jurisdiction over a subject matter, the judgment
is rendered null and void. A void judgment is in legal effect no judgment, by which no
rights are divested, from which no right can be obtained, which neither binds nor bars
any one, and under which all acts performed and all claims flowing out are void. It is
not a decision in contemplation of law and, hence, it can never become executory. It
also follows that such a void judgment cannot constitute a bar to another case by
reason of res judicata.62
cralawrednad

Our decision in G.R. No. 155118 may have long attained finality and may have, in
effect, rendered the DARAB decision final and executory. But again, considering the lack
of jurisdiction of the DARAB, we hold that the Court of Appeals in CA G.R. No. 82322
did not err in reopening and ruling on the merits of the case.

In Natividad v. Mariano. et al.,63 we held that the DARAB and the Court of Appeals did
not err in reopening and ruling on the merits of the case because the PARAD effectively
and gravely abused its discretion and acted without jurisdiction in denying the petition
for relief from judgment. Thus: ChanRoblesvirtualLawlibrary

We cannot blame Ernesto for insisting that the PARAD decision can no longer be
altered. The doctrine of immutability of final judgments, grounded on the fundamental
principle of public policy and sound practice, is well settled. Indeed, once a decision has
attained finality, it becomes immutable and unalterable and may no longer be modified
in any respect, whether the modification is to be made by the court that rendered it or
by the highest court of the land. The doctrine holds true even if the modification is
meant to correct erroneous conclusions of fact and law. The judgment of courts and the
award of quasi-judicial agencies must, on some definite date fixed by law, become final
even at the risk of occasional errors. The only accepted exceptions to this general rule
are the correction of clerical errors, the so-called nunc pro tunc entries which cause no
prejudice to any party, void judgments, and whenever circumstances transpire after the
finality of the decision which render its execution unjust and inequitable.

This doctrine of immutability of judgments notwithstanding, we are not persuaded that

the DARAB and the CA erred in reopening, and ruling on the merits of the case. The
broader interests of justice and equity demand that we set aside procedural rules as
they are, after all, intended to promote rather than defeat substantial justice. If the
rigid and pedantic application of procedural norms would frustrate rather than promote
justice, the Court always has the power to suspend the rules or except a particular case
from its operation, particularly if defects of jurisdiction appear to be present. This is the
precise situation that we presently find before this Court.

The DARAB's actions outside its jurisdiction cannot produce legal effects and cannot
likewise be justified by the principle of immutability of final judgment.64cralawrednad

We are also prepared to vacate our ruling in G.R. No. 155118. In Heirs of Maura So v.
Obliosca, et al.,65 we departed from our minute resolution issued previously in a
different petition because it effectively rendered final and executory an erroneous order
of a trial court. We explained then: ChanRoblesvirtualLawlibrary

In Collantes v. Court of Appeals,66 the Court offered three options to solve a case of

conflicting decisions: the first is tor the parties to assert their claims anew,
the second is to determine which judgment came first, and the third is to determine
which of the judgments had been rendered by a court of last resort. In that case, the
Court applied the first option and resolved the conflicting issues anew.

Instead of resorting to the first offered solution as in Collantes, which would entail
disregarding all the three final and executory decisions, we find it more equitable to
apply the criteria mentioned in the second and third solutions, and thus, maintain the
finality of one of the conflicting judgments. The principal criterion under the second
option is the time when the decision was rendered and became final and executory,
such that earlier decisions should be sustained over the current ones since final and
executory decisions vest rights in the winning party. The major criterion under the third
solution is a determination of which court or tribunal rendered the decision. Decisions of
this Court should be accorded more respect than those made by the lower courts.

The application of these criteria points to the preservation of the Decision of this Court
in G.R. Nos. 92871 and 92860 dated August 2, 1991, and its Resolution in G.R. No.
110661 dated December 1, 1993. Both judgments were rendered long before the
Minute Resolution in G.R. No. 118050 was issued on March 1, 1995. In tact, the August
2, 1991 Decision was executed already - respondents were divested of their title over
the property and a new title, TCT No. T-68370, was issued in the name of Maura So on
July 24, 1992. Further, while all three judgments actually reached this Court,
only the two previous judgments extensively discussed the respective cases
on the merits. The third judgment (in G.R. No. 118050) was a Minute
Resolution, dismissing the petition for review on certiorari of the RTC
Resolution in the legal redemption case for failure to sufficiently show that the
questioned resolution was tainted with grave abuse of discretion and for being
the wrong remedy. In a manner of speaking, therefore, the third final and
executory judgment was substantially a decision of the trial court.

xxx

The matter is again before this Court, and this time, it behooves the Court to set things
right in order to prevent a grave injustice from being committed against Maura So who
had, tor 15 years since the first decision was executed, already considered herself to be
the owner of the property. The Court is not precluded from rectifying errors of
judgment if blind and stubborn adherence to the doctrine of immutability of
final judgments would involve the sacrifice of justice for technicality.
(Emphasis Ours)

On the issue of forum-shopping

Petitioners argue that respondents are guilty of forum shopping when, in instituting
their respective petitions before the Court of Appeals in CA G.R. No. 71055 and CA G.R.
No. 82322, respondents did not inform the courts of the pendency of each petition and
of CA G.R. No. 70717.

We note that CA G.R. No. 70717 and CA G.R. No. 71055 were filed merely days apart
by FEPI and Kingsville, together with Ong, respectively. CA G.R. No. 70717 was filed on
May 31, 2002, while CA G.R. No. 71055 was filed on June 2, 2002. Yet, the supposed
verification and certification against forum shopping in CA G.R. No. 71055, which was
incorporated in the body of the pleading, did not mention the existence of CA G.R. No.
70717.67 FEPI, on its part, was also duty bound to inform the Court of Appeals of
Kingsville's petition. They cannot feign ignorance of each other's petition when they
filed their own because they were co-respondents in the original complaint and had
been represented by the same counsel m the proceedings before the RARAD and the
DARAB.

On the other hand, CA G.R. No. 82322 was filed on March 14, 2004, during the
pendency of CA G.R. No. 70717 and after CA G.R. No. 71055 was dismissed.
Nevertheless, the certification in CA G.R. No. 82322 did not mention CA G.R. No. 70717
or CA G.R. No. 71055.68 Kingsville cannot also feign ignorance of its own petition in CA
G.R. No. 71055 when it filed CA G.R. No. 82322.

We hold that respondents' certifications against forum-shopping are inaccurate because

they do not disclose the pendency and/or filing of the other petitions that raise the
same issues and assail the similar decision and order of the DARAB. Respondents also
obviously sought different fora when they filed similar petitions before the Court of
Appeals separately.

Forum shopping is the act of a litigant who repetitively availed of several judicial
remedies in different courts, simultaneously or successively, all substantially founded
on the same transactions and the same essential facts and circumstances, and all
raising substantially the same issues, either pending in or already resolved adversely by
some other court, to increase his chances of obtaining a favorable decision if not in one
court, then in another.69
cralawrednad
Forum shopping can be committed in three ways: (1) by filing multiple cases based on
the same cause of action and with the same prayer, the previous case not having been
resolved yet (where the ground for dismissal is litis pendentia); (2) by filing multiple
cases based on the same cause of action and with the same prayer, the previous case
having been finally resolved (where the ground for dismissal is res judicata); and (3) by
filing multiple cases based on the same cause of action but with different prayers
(splitting of causes of action, where the ground for dismissal is also either litis
pendentia  or res judicata).70 cralawrednad

More particularly, the elements of forum-shopping are: (a) identity of parties or at least
such parties that represent the same interests in both actions; (b) identity of rights
asserted and reliefs prayed for, the relief being founded on the same facts; (c) identity
of the two preceding particulars, such that any judgment rendered in the other action
will, regardless of which party is successful, amount to res judicata in the action under
consideration.71 cralawrednad

Applying the foregoing elements in the case at bar, the Court of Appeals in CA G.R. No.
70717 was in error in finding no violation of forum shopping on the ground that the
respondents are separate entities with separate interests who may pursue remedies
independently. The rule against forum shopping does not require absolute identity of
parties; substantial identity of parties is sufficient.72 There is substantial identity of
parties where there is a community of interest between a party in the first case and a
party in the second case.73 It is beyond quibbling that respondents do have a common
interest in the present case.

In Silahis International Hotel, Inc. v. The National Labor Relations Commission, et

al.,74 we reiterated our consistent rule that a party should not be allowed to pursue
simultaneous remedies in two different forums. Although most of the cases that we
have ruled upon regarding forum shopping involved petitions in the courts and
administrative agencies, the rule prohibiting it applies equally to multiple petitions in
the same tribunal or agency. We concluded that by filing another petition involving the
same essential facts and circumstances in the same agency, i.e. where respondents
filed their appeal and injunction case separately in the NLRC, respondents approached
two different fora in order to increase their chances obtaining a favorable decision or
action. We affirmed that this practice cannot be tolerated and should be condemned.

Nevertheless, just like in Silahis International Hotel, Inc., though we find the action
taken by the respondents ill-advised, this does not mean that the erroneous decision of
the DARAB should be sanctioned and the present petitions dismissed. Despite our
proscription against forum shopping, the respondents should be allowed to have
recourse to the processes of law and to seek relief from the decision of the DARAB as
this allowance will better serve the ends of justice.

In Barranco, v. Commission on the Settlement of Land Problems,75 we also had the

occasion to relax the rule against forum shopping on the basis of a valid justification.
Thus:ChanRoblesvirtualLawlibrary

The appellate court however correctly ruled that petitioner is guilty of torum shopping.
Petitioner deliberately sought another forum, i.e.. the Regional Trial Court of Iloilo City,
to grant her relief after this Court dismissed her petition questioning the jurisdiction of
COSLAP. What petitioner should have done after COSLAP dismissed the motion to
dismiss and after this Court dismissed the petition for certiorari for late filing, was to
wait for the final verdict of COSLAP and to appeal therefrom, instead of seeking
recourse from the trial court through a petition to enjoin the enforcement of COSLAP's
writ of demolition and the order denying the repudiation of the amicable settlement.

The Court is fully aware that procedural rules are not to be belittled or simply
disregarded for these prescribed procedures insure an orderly and speedy
administration of justice. However, it is equally true that litigation is not merely a game
of technicalities. Law and jurisprudence grant to courts the prerogative to relax
compliance with procedural rules of even the most mandatory character, mindful of the
duty to reconcile both the need to put an end to litigation speedily and the parties' right
to an opportunity to be heard.

In Sanchez v. Court of Appeals,76 the Court restated the reasons which may provide
justification for a court to suspend a strict adherence to procedural rules, such as: (a)
matters of life, liberty, honor or property; (b) the existence of special or compelling
circumstances, (c) the merits of the case, (d) a cause not entirely attributable to the
fault or negligence of the party favored by the suspension of the rules, (e) a lack of any
showing that the review sought is merely frivolous and dilatory, and (t) the other party
will not be unjustly prejudiced thereby.

Thus, any procedural lapse that may have been committed by the petitioner should not
deter us from resolving the merits of the instant case considering that the dismissal of
the present appeal would unlawfully deprive the petitioner of her possessorial right over
Lot No. 1611-D-3.

We find that the merits of respondents' case and the lack of jurisdiction of the DARAB
over the subject matter of the case between the parties are special and compelling
reasons that warrant the suspension of our rules against forum-shopping. This is not to
say, however, that we acquiesce to the neglectful omissions of respondents' counsels.
They, who have been charged with the knowledge of the law and with the duty of
assisting in the administration of justice, are sternly reminded to be more circumspect
in their professional concerns. We will not hesitate to impose severe penalties should
they commit similar acts in the future.

Finally, petitioners' contention that the Court of Appeals should have dismissed CA G.R.
No. 70717 upon being informed of the filing of CA G.R. No. 71055 and its subsequent
dismissal deserves scant consideration. We note that when the Court of Appeals in CA
G.R. No. 701771 was informed by petitioners about CA G.R. No. 71055, the latter was
already dismissed on technical grounds. Had it still been pending at that time, the ideal
solution would have been to consolidate the two petitions, as was done here. The
dismissal of CA G.R. No. 71055, however, did not oblige the Court of Appeals in CA G.R.
No. 707 I 7 to likewise dismiss the same, considering that it was filed first in time and
was the correct mode of appeal. We explained in  Cruz, et al. v. Court qf Appeals, et
al.:77
cralawrednad

With regard to the second assigned error, petitioners maintain that in view of its
dismissal of the injunction case then pending before the Regional Trial Court on the
ground of forum shopping, the Court of Appeals should have also dismissed the
unlawful detainer case before the Metropolitan Trial Court as there was no factual nor
legal basis to retain one and dismiss the other, or to be "selective" as to which of the
two actions involving the same parties, the same causes of action or issues and the
same reliefs, it should dismiss. In other words, it is petitioners' submission that on the
basis of its finding of forum-shopping, the Court of Appeals should have dismissed both
the injunction case and the ejectment case.

The issue of who between the petitioners and respondents spouses could
exercise the right of possession and/or ownership over subject property
stems from an actual controversy brought for resolution by the court. The
court is called upon to decide an issue which proceeds from a justiciable
controversy. The dismiss of both cases, as petitioners would want the Court of
Appeals to do, would result in the court's abdication of its judicial function of
resolving controversies which are ripe for adjudication.

Litis pendentia, res judicata and forum shopping arc all based on the policy against
multiplicity of suits. Forum shopping is sanctioned under Supreme Court Revised
Circular No. 28-91 (now Section 5, Rule 8 of the Rules of Civil Procedure per
amendments of July 1997) Moreover, forum-shopping exists where the elements of litis
pendentia  are present or where a final judgment in one case will amount to res
judicata in the other.

To determine which action should be dismissed given the pendency of two actions,
relevant considerations such as the following arc taken into account: (1) the date of
filing, with preference generally given to the first action filed to be retained;
(2) whether the action sought to be dismissed was filed merely to preempt the latter
action or to anticipate its filing and lay the basis for its dismissal; and (3) whether the
action is the appropriate vehicle for litigating the issues between the parties.
(Emphasis Ours)

Nevertheless, we hold that Kingsville, as the owner of Forest Hills Residential Estates
Phase I, is an indispensable party without whom no final determination can be had of
the action. It should have been joined as petitioner in CA G.R. No. 70717 either by FEPI
or by the Court of Appeals at its own initiative. We rectify this defect now on the
principle that the omission to include Kingsville "is a mere technical defect which can be
cured at any stage of the proceedings even after judgment"; and that, particularly in
the case of indispensable parties, since their presence and participation is essential to
the very life of the action, for without them no judgment may be rendered,
amendments of the complaint in order to implead them should be freely allowed, even
on appeal, in fact even after rendition of judgment by this Court, where it appears that
the complaint otherwise indicates their identity and character as such indispensable
parties."78
cralawrednad

On CA G.R. No. 82322, we hold that in view of our earlier findings that the DARAB has
no jurisdiction over the subject matter of the case between the parties, the Court of
Appeals in CA G.R. No. 82322 did not err in taking cognizance of the petition despite
respondents' violation on forum shopping.

WHEREFORE, the consolidated petitions are hereby DENIED. The assailed decisions

and resolutions of the Court of Appeals in CA G.R. No. 70717 and CA G.R. No. 82322
are affirmed.

SO ORDERED. chanrobles virtuallawlibrary

[G.R. NO. 132477 : August 31, 2005]

JOSE LUIS ROS, ANDONI F. ABOITIZ, XAVIER ABOITIZ, ROBERTO E. ABOITIZ,

ENRIQUE ABOITIZ, MATTHIAS G. MENDEZONA, CEBU INDUSTRIAL PARK
DEVELOPERS, INC. and FBM ABOITIZ MARINE,
INC., Petitioners, v. DEPARTMENT OF AGRARIAN REFORM, HON. ERNESTO
GARILAO, in his capacity as DAR Secretary, and DIR. JOSE LLAMES, in his
capacity as Director of DAR-Regional 7, Respondent.

DECISION

CHICO-NAZARIO, J.:

Petitioners are the owners/developers of several parcels of land located in Arpili,

Balamban, Cebu. By virtue of Municipal Ordinance No. 101 passed by the Municipal
Council of Balamban, Cebu, these lands were reclassified as industrial lands.1 On 03
April 1995, the Provincial Board of Cebu approved Balamban's land use plan and
adopted en toto Balamban's Municipal Ordinance No. 101 with the passage of
Resolution No. 836-95 and Provincial Ordinance No. 95-8, respectively.2 As part of their
preparation for the development of the subject lands as an industrial park, petitioners
secured all the necessary permits and appropriate government certifications.3

Despite these permits and certifications, petitioner Matthias Mendezona received a

letter from Mr. Jose Llames, Director of the Department of Agrarian Reform (DAR)
Regional Office for Region 7, informing him that the DAR was disallowing the conversion
of the subject lands for industrial use and directed him to cease and desist from further
developments on the land to avoid the incurrence of civil and criminal liabilities.4

Petitioners were thus constrained to file with the Regional Trial Court (RTC) of Toledo
City a Complaint dated 29 July 1996 for Injunction with Application for Temporary
Restraining Order and a Writ of Preliminary Injunction, docketed as Civil Case No. T-
590.5 In an order6 dated 12 August 1996, the RTC, ruling that it is the DAR which has
jurisdiction, dismissed the Complaint for lack of jurisdiction.7 It justified the dismissal in
this wise:

A perusal of Section 20 of the Local Government Code expressly provides that the
Municipalities through an Ordinance by the Sanggunian may authorize the
reclassification of the agricultural land within their area into non-agricultural. Paragraph
(e) of the aforesaid Section, provides further: that nothing in this Section shall be
construed as repealing or modifying in any manner the provision of Republic Act 6657.
In an opinion of the Secretary of Justice, quoted: With respect of (sic) conversion of
agricultural land to non-agricultural uses the authority of the DAR to approve the same
may be exercise (sic) only from the date of the effectivity of the Agrarian Reform Law
on June 15, 1988. It appears that the petitioners had applied for conversion on June
13, 1995 and therefore the petitioner (sic) are estopped from questioning the authority
and jurisdiction of the Department of Agrarian Reform. The application having been
filed after June 15, 1988, the reclassification by the Municipal Council of Balamban was
just a step in the conversion of the aforestated lands according to its purpose.
Executive Order No. 129-A, Section 5, "The Department shall be responsible for
implementing Comprehensive Agrarian Reform and for such purpose it is authorized to
(J) approve or disapprove the conversion, restructuring or readjustment of agricultural
land into non-agricultural uses." Said Executive Order amended Section 36 of Republic
Act No. 3644 which clearly mandates that the DAR Secretary (sic) approve or
disapprove conversion are not impliedly repealed. In fact, under Section 75 of Republic
Act 6657 the above laws and other laws not inconsistent of (sic) this act shall have
suppletory effect. Further, Section 68 of Republic Act 6657 provides: No injunction,
restraining order, prohibition or mandamus shall be issued by the lower court against
the Department of Agrarian Reform, DENR and Department of Justice in their
implementation of the program. With this provision, it is therefore clear (sic) when
there is conflict of laws determining whether the Department of Agrarian Reform has
been exclusively empowered by law to approve land conversion after June 15, 1988
and (sic) the final ruling falls only with the Supreme Court or Office of the President.

WHEREFORE, in view of the foregoing, the Application for Restraining Order is hereby
ordered DENIED and the main case is DISMISSED, this Court having no jurisdiction
over the same.8

In an order dated 18 September 1996, the trial court denied the motion for
reconsideration filed by the petitioners.9 Petitioners filed before this Court a Petition for
Review on Certiorari with application for Temporary Restraining Order and Writ of
Preliminary Injunction.10 In a resolution11 dated 11 November 1996, this Court referred
the petition to the Court of Appeals.12 Petitioners moved for a reconsideration of the
said resolution but the same was denied in a resolution dated 27 January 1997.13

At the Court of Appeals, the public respondents were ordered14 to file their Comments
on the petition. Two sets of comments from the public respondents, one from the
Department of Agrarian Reform Provincial Office15 and another from the Office of the
Solicitor General,16 were submitted, to which petitioners filed their Consolidated Reply.17

On 02 December 1997, the Court of Appeals rendered a decision18 affirming the Order

of Dismissal issued by the RTC.19 A motion for reconsideration filed by the petitioners
was denied in a resolution dated 30 January 1998.20

Hence, this petition.

The following issues21 are raised by the petitioners for resolution:

(a) Whether or not the reclassification of the subject lands to industrial use by the
Municipality of Balamban, Cebu pursuant to its authority under Section 20(a) of
Republic Act No. 7160 or the Local Government Code of 1991 (the "LGC") has the effect
of taking such lands out of the coverage of the CARL and beyond the jurisdiction of the
DAR;

(b) Whether or not the Complaint for Injunction may be dismissed under the doctrine of
primary jurisdiction;

(c) Whether or not the Complaint for Injunction is an appropriate remedy against the
order of the DAR enjoining development works on the subject lands;

(d) Whether or not the Regional Trial Court of Toledo City had authority to issue a writ
of injunction against the DAR.

In sum, petitioners are of the view that local governments have the power to reclassify
portions of their agricultural lands, subject to the conditions set forth in Section
2022 23 of the Local Government Code. According to them, if the agricultural land sought
to be reclassified by the local government is one which has already been brought under
the coverage of the Comprehensive Agrarian Reform Law (CARL) and/or which has
been distributed to agrarian reform beneficiaries, then such reclassification must be
confirmed by the DAR pursuant to its authority under Section 6522 of the CARL, in
order for the reclassification to become effective. If, however, the land sought to be
reclassified is not covered by the CARL and not distributed to agrarian reform
beneficiaries, then no confirmation from the DAR is necessary in order for the
reclassification to become effective as such case would not fall within the DAR's
conversion authority. Stated otherwise, Section 65 of the CARL does not, in all cases,
grant the DAR absolute, sweeping and all-encompassing power to approve or
disapprove reclassifications or conversions of all agricultural lands. Said section only
grants the DAR exclusive authority to approve or disapprove conversions of agricultural
lands which have already been brought under the coverage of the CARL and which have
already been distributed to farmer beneficiaries.

The petition lacks merit.

After the passage of Republic Act No. 6657, otherwise known as Comprehensive
Agrarian Reform Program, agricultural lands, though reclassified, have to go through
the process of conversion, jurisdiction over which is vested in the DAR. However,
agricultural lands already reclassified before the effectivity of Rep. Act No. 6657 are
exempted from conversion.

Department of Justice Opinion No. 44, Series of 1990, provides:

". . . True, the DAR's express power over land use conversion is limited to cases in
which agricultural lands already awarded have, after five years, ceased to be
economically feasible and sound for agricultural purposes, or the locality has become
urbanized and the land will have a greater economic value for residential, commercial
or industrial purposes. But to suggest that these are the only instances when the DAR
can require conversion clearances would open a loophole in R.A. No. 6657, which every
landowner may use to evade compliance with the agrarian reform program. Hence, it
should logically follow from the said department's express duty and function to execute
and enforce the said statute that any reclassification of a private land as a residential,
commercial or industrial property should first be cleared by the DAR."

The requirement that agricultural lands must go through the process of conversion
despite having undergone reclassification was underscored in the case of Alarcon v.
Court of Appeals,24 where it was held that reclassification of land does not suffice:

In the case at bar, there is no final order of conversion. The subject landholding was
merely reclassified. Conversion is different from reclassification. Conversion is the act of
changing the current use of a piece of agricultural land into some other use as
approved by the Department of Agrarian Reform. Reclassification, on the other hand, is
the act of specifying how agricultural lands shall be utilized for non-agricultural uses
such as residential, industrial, commercial, as embodied in the land use plan, subject to
the requirements and procedure for land use conversion. Accordingly, a mere
reclassification of agricultural land does not automatically allow a landowner to change
its use and thus cause the ejectment of the tenants. He has to undergo the process of
conversion before he is permitted to use the agricultural land for other purposes.

Rep. Act No. 6657 took effect on 15 June 1988. Municipal Ordinance No. 101 of
Balamban, Cebu, which reclassified the subject lands, was passed on 25 March 1992,
and Provincial Ordinance No. 95-8 of the Provincial Board of Cebu, which adopted
Municipal Ordinance No. 101, was passed on 03 April 1995, long after Rep. Act No.
6657 has taken effect. Section 4 of Rep. Act No. 6657 provides:

SEC. 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.

...

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

To further clarify any doubt on its authority, the DAR issued Administrative Order No.
12 dated October 1994 which reads:

Administrative Order No. 12

Series of 1994

SUBJECT: CONSOLIDATED AND REVISED RULES AND PROCEDURES GOVERNING

CONVERSION OF ARICULTURAL LANDS TO NON-AGRICULTURAL USES

I. PREFATORY STATEMENT

The guiding principles on land use conversion is to preserve prime agricultural lands.
On the other hand, conversion of agricultural lands, when coinciding with the objectives
of the Comprehensive Agrarian Reform Law to promote social justice, industrialization,
and the optimum use of land as a national resource for public welfare, shall be pursued
in a speedy and judicious manner.

To rationalize these principles, and by virtue of Republic Act (R.A.) No. 3844, as
amended, Presidential Decree (P.D.) No. 27, P.D. No. 946, Executive Order (E.O.) No.
129-A and R.A. No. 6657, the Department of Agrarian Reform (DAR) has issued several
policy guidelines to regulate land use conversion. This Administrative Order
consolidates and revises all existing implementing guidelines issued by the DAR, taking
into consideration, other Presidential issuances and national policies related to land use
conversion.

II. LEGAL MANDATE

A. The Department of Agrarian Reform (DAR) is mandated to "approve or disapprove

applications for conversion, restructuring or readjustment of agricultural lands into non-
agricultural uses," pursuant to Section 4(i) of Executive Order No. 129-A, Series of
1987.

B. Section 5(i) of E.O. No. 129-A, Series of 1987, vests in the DAR, exclusive authority
to approve or disapprove applications for conversion of agricultural lands for residential,
commercial, industrial, and other land uses.

C. Section 65 of R.A. No. 6657, otherwise known as the Comprehensive Agrarian

Reform Law of 1988, likewise empowers the DAR to authorize under certain conditions,
the reclassification or conversion of agricultural lands.

D. Section 4 of Memorandum Circular No. 54, Series of 1993 of the Office of the
President, provides that "action on applications for land use conversion on individual
landholdings shall remain as the responsibility of the DAR, which shall utilize as its
primary reference, documents on the comprehensive land use plans and accompanying
ordinances passed upon and approved by the local government units concerned,
together with the National Land Use Policy, pursuant to R.A. No. 6657 and E.O. No.
129-A."

III. DEFINITION OF TERMS

A. Agricultural land refers to land devoted to agricultural activity and not classified as
mineral, forest, residential, commercial or industrial land (Section 3[c], R.A. No. 6657).

B. Conversion is the act of changing the current use of a piece of agricultural land into
some other use.

C. Reclassification of agricultural lands is the act of specifying how agricultural lands

shall be utilized for non-agricultural uses such as residential, industrial, commercial, as
embodied in the land use plan. It also includes the reversion of non-agricultural lands to
agricultural use.

...
V. COVERAGE

These rules shall cover all private agricultural lands as defined herein regardless of
tenurial arrangement and commodity produced. It shall also include agricultural lands
reclassified by LGUs into non-agricultural uses, after June 15, 1988, pursuant to
Memorandum Circular (M.C.) No. 54, Series of 1993 of the Office of the President and
those proposed to be used for livestock, poultry and swine raising as provided in DAR
Administrative Order No. 9, Series of 1993.

In the case of Advincula-Velasquez v. Court of Appeals,25 we held:

Our ruling in the Natalia case was reiterated in National Housing Authority v.

Allarde (318 SCRA 22 [1999]).

The Court of Appeals' reliance on DOJ Opinion No. 44, Series of 1990, is in order. In the
said opinion, the Secretary of Justice declared, viz:

Based on the foregoing premises, we reiterate the view that with respect to conversions
of agricultural lands covered by R.A. No. 6657 to non-agricultural uses, the authority of
DAR to approve such conversions may be exercised from the date of the law's
effectivity on June 15, 1988. This conclusion is based on a liberal interpretation of R.A.
No. 6657 in the light of DAR's mandate and extensive coverage of the agrarian reform
program.

Following the DOJ opinion, the DAR issued Administrative Order No. 6, Series of 1994,
stating that lands already classified as non-agricultural before the enactment of Rep.
Act No. 6657 no longer needed any conversion clearance:

I. Prefatory Statement

In order to streamline the issuance of exemption clearances, based on DOJ Opinion No.
44, the following guidelines are being issued for the guidance of the DAR and the public
in general.

II. Legal Basis

Sec. 3(c) of RA 6657 states that agricultural lands refers to the land devoted to
agricultural activity as defined in this act and not classified as mineral, forest,
residential, commercial or industrial land.

Department of Justice Opinion No. 44, series of 1990 has ruled that, with respect to the
conversion of agricultural lands covered by RA 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 are already classified as commercial,
industrial, or residential before 15 June 1988 no longer need any conversion clearance.

The authority of the DAR to approve conversions of agricultural lands covered by Rep.
Act No. 6657 to non-agricultural uses has not been pierced by the passage of the Local
Government Code. The Code explicitly provides26 that "nothing in this section shall be
construed as repealing or modifying in any manner the provisions of Rep. Act No.
6657."

It being settled that jurisdiction over conversion of land is vested in the DAR, the
complaint for injunction was correctly dismissed by the trial and appellate courts under
the doctrine of primary jurisdiction. This Court, in Bautista v. Mag-isa Vda. De
Villena,27 found occasion to reiterate the doctrine of primary jurisdiction'

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

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

Under Republic Act 6657, the DAR retains jurisdiction over all agrarian reform matters.
The pertinent provision reads:

"Section 50. Quasi-Judicial Powers of the DAR. - The DAR is hereby vested with the
primary jurisdiction to determine and adjudicate agrarian reform matters and shall have
exclusive original jurisdiction over all matters involving the implementation of agrarian
reform, except those falling under the exclusive jurisdiction of the Department of
Agriculture and the Department of Environment and Natural Resources.

"It shall not be bound by technical rules of procedure and evidence but shall proceed to
hear and decide all cases, disputes or controversies in a most expeditious manner,
employing all reasonable means to ascertain the facts of every case in accordance with
justice and equity and the merits of the case. Toward this end, it shall adopt a uniform
rule of procedure to achieve a just, expeditious and inexpensive determination of every
action or proceeding before it. . . ."

Finally, the third and fourth issues which may be summed up into whether or not an
injunction is the appropriate remedy against the order of the DAR enjoining petitioners
in developing the subject land, we rule in the negative. Section 68 of Rep. Act No. 6657
provides:

SEC. 68. Immunity of Government Agencies from Undue Interference. - No injunction,

restraining order, prohibition or mandamus shall be issued by the lower courts against
the Department of Agrarian Reform (DAR), the Department of Agriculture (DA), the
Department of Environment and Natural Resources (DENR), and the Department of
Justice (DOJ) in their implementation of the program.
Wherefore, premises considered, the instant petition is Denied for lack of merit. The
decision of the Court of Appeals in CA-G.R. SP No. 42666 dated 02 December 1997
affirming the order dated 12 August 1996 of the Regional Trial Court of Toledo City,
Branch 29, in Civil Case No. T-590 is AFFIRMED. Costs against petitioners.

SO ORDERED.
[G.R. No. 183409 : June 18, 2010]

CHAMBER OF REAL ESTATE AND BUILDERS ASSOCIATIONS, INC. (CREBA), PETITIONER, VS. THE
SECRETARY OF AGRARIAN REFORM, RESPONDENT.

DECISION

PEREZ, J.:

This case is a Petition for Certiorari and Prohibition (with application for temporary restraining order
and/or writ of preliminary injunction) under Rule 65 of the 1997 Revised Rules of Civil Procedure, filed
by herein petitioner Chamber of Real Estate and Builders Associations, Inc. (CREBA) seeking to nullify
and prohibit the enforcement of Department of Agrarian Reform (DAR) Administrative Order (AO) No.
01-02, as amended by DAR AO No. 05-07,[1] and DAR Memorandum No. 88,[2] for having been issued
by the Secretary of Agrarian Reform with grave abuse of discretion amounting to lack or excess of
jurisdiction as some provisions of the aforesaid administrative issuances are illegal and unconstitutional.

Petitioner CREBA, a private non-stock, non-profit corporation duly organized and existing under the laws
of the Republic of the Philippines, is the umbrella organization of some 3,500 private corporations,
partnerships, single proprietorships and individuals directly or indirectly involved in land and housing
development, building and infrastructure construction, materials production and supply, and services in
the various related fields of engineering, architecture, community planning and development financing.
The Secretary of Agrarian Reform is named respondent as he is the duly appointive head of the DAR
whose administrative issuances are the subject of this petition.
The Antecedent Facts

The Secretary of Agrarian Reform issued, on 29 October 1997, DAR AO No. 07-97,[3] entitled "Omnibus
Rules and Procedures Governing Conversion of Agricultural Lands to Non-Agricultural Uses," which
consolidated all existing implementing guidelines related to land use conversion. The aforesaid rules
embraced all private agricultural lands regardless of tenurial arrangement and commodity produced,
and all untitled agricultural lands and agricultural lands reclassified by Local Government Units (LGUs)
into non-agricultural uses after 15 June 1988.

Subsequently, on 30 March 1999, the Secretary of Agrarian Reform issued DAR AO No. 01-99,[4] entitled
"Revised Rules and Regulations on the Conversion of Agricultural Lands to Non-agricultural Uses,"
amending and updating the previous rules on land use conversion. Its coverage includes the following
agricultural lands, to wit: (1) those to be converted to residential, commercial, industrial, institutional
and other non-agricultural purposes; (2) those to be devoted to another type of agricultural activity such
as livestock, poultry, and fishpond ─ the effect of which is to exempt the land from the Comprehensive
Agrarian Reform Program (CARP) coverage; (3) those to be converted to non-agricultural use other than
that previously authorized; and (4) those reclassified to residential, commercial, industrial, or other non-
agricultural uses on or after the effectivity of Republic Act No. 6657[5] on 15 June 1988 pursuant to
Section 20[6] of Republic Act No. 7160[7] and other pertinent laws and regulations, and are to be
converted to such uses.

On 28 February 2002, the Secretary of Agrarian Reform issued another Administrative Order, i.e., DAR
AO No. 01-02, entitled "2002 Comprehensive Rules on Land Use Conversion," which further amended
DAR AO No. 07-97 and DAR AO No. 01-99, and repealed all issuances inconsistent therewith. The
aforesaid DAR AO No. 01-02 covers all applications for conversion from agricultural to non-agricultural
uses or to another agricultural use.

Thereafter, on 2 August 2007, the Secretary of Agrarian Reform amended certain provisions[8] of DAR
AO No. 01-02 by formulating DAR AO No. 05-07, particularly addressing land conversion in time of
exigencies and calamities.
To address the unabated conversion of prime agricultural lands for real estate development, the
Secretary of Agrarian Reform further issued Memorandum No. 88 on 15 April 2008, which temporarily
suspended the processing and approval of all land use conversion applications.

By reason thereof, petitioner claims that there is an actual slow down of housing projects, which, in
turn, aggravated the housing shortage, unemployment and illegal squatting problems to the substantial
prejudice not only of the petitioner and its members but more so of the whole nation.

Hence, this petition.

The Issues

In its Memorandum, petitioner posits the following issues:

I.

WHETHER THE DAR SECRETARY HAS JURISDICTION OVER LANDS THAT HAVE BEEN RECLASSIFIED AS
RESIDENTIAL, COMMERCIAL, INDUSTRIAL, OR FOR OTHER NON-AGRICULTURAL USES.

II.

WHETHER THE DAR SECRETARY ACTED IN EXCESS OF HIS JURISDICTION AND GRAVELY ABUSED HIS
DISCRETION BY ISSUING AND ENFORCING [DAR AO NO. 01-02, AS AMENDED] WHICH SEEK TO REGULATE
RECLASSIFIED LANDS.

III.

WHETHER [DAR AO NO. 01-02, AS AMENDED] VIOLATE[S] THE LOCAL AUTONOMY OF LOCAL
GOVERNMENT UNITS.
IV.

WHETHER [DAR AO NO. 01-02, AS AMENDED] VIOLATE[S] THE DUE PROCESS AND EQUAL PROTECTION
CLAUSE[S] OF THE CONSTITUTION.

V.

WHETHER MEMORANDUM NO. 88 IS A VALID EXERCISE OF POLICE POWER.[9]

The subject of the submission that the DAR Secretary gravely abused his discretion is AO No. 01-02, as
amended, which states:

Section 3. Applicability of Rules. - These guidelines shall apply to all applications for conversion, from
agricultural to non-agricultural uses or to another agricultural use, such as:

xxxx

3.4 Conversion of agricultural lands or areas that have been reclassified by the LGU or by way of a
Presidential Proclamation, to residential, commercial, industrial, or other non-agricultural uses on or
after the effectivity of RA 6657 on 15 June 1988, x x x. [Emphasis supplied].

Petitioner holds that under Republic Act No. 6657 and Republic Act No. 8435,[10] the term agricultural
lands refers to "lands devoted to or suitable for the cultivation of the soil, planting of crops, growing of
fruit trees, raising of livestock, poultry or fish, including the harvesting of such farm products, and other
farm activities and practices performed by a farmer in conjunction with such farming operations done by
a person whether natural or juridical, and not classified by the law as mineral, forest, residential,
commercial or industrial land." When the Secretary of Agrarian Reform, however, issued DAR AO No.
01-02, as amended, he included in the definition of agricultural lands "lands not reclassified as
residential, commercial, industrial or other non-agricultural uses before 15 June 1988." In effect, lands
reclassified from agricultural to residential, commercial, industrial, or other non-agricultural uses after
15 June 1988 are considered to be agricultural lands for purposes of conversion, redistribution, or
otherwise. In so doing, petitioner avows that the Secretary of Agrarian Reform acted without jurisdiction
as he has no authority to expand or enlarge the legal signification of the term agricultural lands through
DAR AO No. 01-02. Being a mere administrative issuance, it must conform to the statute it seeks to
implement, i.e., Republic Act No. 6657, or to the Constitution, otherwise, its validity or constitutionality
may be questioned.

In the same breath, petitioner contends that DAR AO No. 01-02, as amended, was made in violation of
Section 65[11] of Republic Act No. 6657 because it covers all applications for conversion from
agricultural to non-agricultural uses or to other agricultural uses, such as the conversion of agricultural
lands or areas that have been reclassified by the LGUs or by way of Presidential Proclamations, to
residential, commercial, industrial or other non-agricultural uses on or after 15 June 1988. According to
petitioner, there is nothing in Section 65 of Republic Act No. 6657 or in any other provision of law that
confers to the DAR the jurisdiction or authority to require that non-awarded lands or reclassified lands
be submitted to its conversion authority. Thus, in issuing and enforcing DAR AO No. 01-02, as amended,
the Secretary of Agrarian Reform acted with grave abuse of discretion amounting to lack or excess of
jurisdiction.

Petitioner further asseverates that Section 2.19,[12] Article I of DAR AO No. 01-02, as amended, making
reclassification of agricultural lands subject to the requirements and procedure for land use conversion,
violates Section 20 of Republic Act No. 7160, because it was not provided therein that reclassification by
LGUs shall be subject to conversion procedures or requirements, or that the DAR's approval or clearance
must be secured to effect reclassification. The said Section 2.19 of DAR AO No. 01-02, as amended, also
contravenes the constitutional mandate on local autonomy under Section 25,[13] Article II and Section
2,[14] Article X of the 1987 Philippine Constitution.

Petitioner similarly avers that the promulgation and enforcement of DAR AO No. 01-02, as amended,
constitute deprivation of liberty and property without due process of law. There is deprivation of liberty
and property without due process of law because under DAR AO No. 01-02, as amended, lands that are
not within DAR's jurisdiction are unjustly, arbitrarily and oppressively prohibited or restricted from
legitimate use on pain of administrative and criminal penalties. More so, there is discrimination and
violation of the equal protection clause of the Constitution because the aforesaid administrative order is
patently biased in favor of the peasantry at the expense of all other sectors of society.
As its final argument, petitioner avows that DAR Memorandum No. 88 is not a valid exercise of police
power for it is the prerogative of the legislature and that it is unconstitutional because it suspended the
land use conversion without any basis.

The Court's Ruling

This petition must be dismissed.

Primarily, although this Court, the Court of Appeals and the Regional Trial Courts have concurrent
jurisdiction to issue writs of certiorari, prohibition, mandamus, quo warranto, habeas corpus and
injunction, such concurrence does not give the petitioner unrestricted freedom of choice of court forum.
[15] In Heirs of Bertuldo Hinog v. Melicor,[16] citing People v. Cuaresma,[17] this Court made the
following pronouncements:

This Court's original jurisdiction to issue writs of certiorari is not exclusive. It is shared by this Court with
Regional Trial Courts and with the Court of Appeals. This concurrence of jurisdiction is not, however, to
be taken as according to parties seeking any of the writs an absolute, unrestrained freedom of choice of
the court to which application therefor will be directed. There is after all a hierarchy of courts. That
hierarchy is determinative of the venue of appeals, and also serves as a general determinant of the
appropriate forum for petitions for the extraordinary writs. A becoming regard for that judicial hierarchy
most certainly indicates that petitions for the issuance of extraordinary writs against first level
("inferior") courts should be filed with the Regional Trial Court, and those against the latter, with the
Court of Appeals. A direct invocation of the Supreme Court's original jurisdiction to issue these writs
should be allowed only when there are special and important reasons therefor, clearly and specifically
set out in the petition. This is [an] established policy. It is a policy necessary to prevent inordinate
demands upon the Court's time and attention which are better devoted to those matters within its
exclusive jurisdiction, and to prevent further over-crowding of the Court's docket.[18] (Emphasis
supplied.)

The rationale for this rule is two-fold: (a) it would be an imposition upon the precious time of this Court;
and (b) it would cause an inevitable and resultant delay, intended or otherwise, in the adjudication of
cases, which in some instances had to be remanded or referred to the lower court as the proper forum
under the rules of procedure, or as better equipped to resolve the issues because this Court is not a trier
of facts.[19]

This Court thus reaffirms the judicial policy that it will not entertain direct resort to it unless the redress
desired cannot be obtained in the appropriate courts, and exceptional and compelling circumstances,
such as cases of national interest and of serious implications, justify the availment of the extraordinary
remedy of writ of certiorari, calling for the exercise of its primary jurisdiction.[20]

Exceptional and compelling circumstances were held present in the following cases: (a) Chavez v.
Romulo,[21] on citizens' right to bear arms; (b) Government of [the] United States of America v. Hon.
Purganan,[22] on bail in extradition proceedings; (c) Commission on Elections v. Judge Quijano-Padilla,
[23] on government contract involving modernization and computerization of voters' registration list; (d)
Buklod ng Kawaning EIIB v. Hon. Sec. Zamora,[24] on status and existence of a public office; and (e) Hon.
Fortich v. Hon. Corona,[25] on the so-called "Win-Win Resolution" of the Office of the President which
modified the approval of the conversion to agro-industrial area.[26]

In the case at bench, petitioner failed to specifically and sufficiently set forth special and important
reasons to justify direct recourse to this Court and why this Court should give due course to this petition
in the first instance, hereby failing to fulfill the conditions set forth in Heirs of Bertuldo Hinog v. Melicor.
[27] The present petition should have been initially filed in the Court of Appeals in strict observance of
the doctrine on the hierarchy of courts. Failure to do so is sufficient cause for the dismissal of this
petition.

Moreover, although the instant petition is styled as a Petition for Certiorari, in essence, it seeks the
declaration by this Court of the unconstitutionality or illegality of the questioned DAR AO No. 01-02, as
amended, and Memorandum No. 88. It, thus, partakes of the nature of a Petition for Declaratory Relief
over which this Court has only appellate, not original, jurisdiction.[28] Section 5, Article VIII of the 1987
Philippine Constitution provides:

Sec. 5. The Supreme Court shall have the following powers:

(1) Exercise original jurisdiction over cases affecting ambassadors, other public ministers and consuls,
and over petitions for certiorari, prohibition, mandamus, quo warranto, and habeas corpus.
(2) Review, revise, reverse, modify, or affirm on appeal or certiorari as the law or the Rules of Court may
provide, final judgments and orders of lower courts in:

(a) All cases in which the constitutionality or validity of any treaty, international or executive
agreement, law, presidential decree, proclamation, order, instruction, ordinance, or regulation is in
question. (Emphasis supplied.)

With that, this Petition must necessarily fail because this Court does not have original jurisdiction over a
Petition for Declaratory Relief even if only questions of law are involved.

Even if the petitioner has properly observed the doctrine of judicial hierarchy, this Petition is still
dismissible.

The special civil action for certiorari is intended for the correction of errors of jurisdiction only or grave
abuse of discretion amounting to lack or excess of jurisdiction. Its principal office is only to keep the
inferior court within the parameters of its jurisdiction or to prevent it from committing such a grave
abuse of discretion amounting to lack or excess of jurisdiction.[29]

The essential requisites for a Petition for Certiorari under Rule 65 are: (1) the writ is directed against a
tribunal, a board, or an officer exercising judicial or quasi-judicial functions; (2) such tribunal, board, or
officer has acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack
or excess of jurisdiction; and (3) there is no appeal or any plain, speedy, and adequate remedy in the
ordinary course of law.[30]

Excess of jurisdiction as distinguished from absence of jurisdiction means that an act, though within the
general power of a tribunal, board or officer, is not authorized and invalid with respect to the particular
proceeding, because the conditions which alone authorize the exercise of the general power in respect
of it are wanting.[31] Without jurisdiction means lack or want of legal power, right or authority to hear
and determine a cause or causes, considered either in general or with reference to a particular matter.
It means lack of power to exercise authority.[32] Grave abuse of discretion implies such capricious and
whimsical exercise of judgment as is equivalent to lack of jurisdiction or, in other words, where the
power is exercised in an arbitrary manner by reason of passion, prejudice, or personal hostility, and it
must be so patent or gross as to amount to an evasion of a positive duty or to a virtual refusal to
perform the duty enjoined or to act at all in contemplation of law.[33]

In the case before this Court, the petitioner fails to meet the above-mentioned requisites for the proper
invocation of a Petition for Certiorari under Rule 65. The Secretary of Agrarian Reform in issuing the
assailed DAR AO No. 01-02, as amended, as well as Memorandum No. 88 did so in accordance with his
mandate to implement the land use conversion provisions of Republic Act No. 6657. In the process, he
neither acted in any judicial or quasi-judicial capacity nor assumed unto himself any performance of
judicial or quasi-judicial prerogative. A Petition for Certiorari is a special civil action that may be invoked
only against a tribunal, board, or officer exercising judicial functions. Section 1, Rule 65 of the 1997
Revised Rules of Civil Procedure is explicit on this matter, viz.:

SECTION 1. Petition for certiorari. - When any tribunal, board or officer exercising judicial or quasi-
judicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of
discretion amounting to lack or excess of jurisdiction, and there is no appeal, nor any plain, speedy, and
adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in
the proper court, alleging the facts with certainty and praying that judgment must be rendered annulling
or modifying the proceedings of such tribunal, board or officer.

A tribunal, board, or officer is said to be exercising judicial function where it has the power to determine
what the law is and what the legal rights of the parties are, and then undertakes to determine these
questions and adjudicate upon the rights of the parties. Quasi-judicial function, on the other hand, is "a
term which applies to the actions, discretion, etc., of public administrative officers or bodies x x x
required to investigate facts or ascertain the existence of facts, hold hearings, and draw conclusions
from them as a basis for their official action and to exercise discretion of a judicial nature."[34]

Before a tribunal, board, or officer may exercise judicial or quasi-judicial acts, it is necessary that there
be a law that gives rise to some specific rights of persons or property under which adverse claims to
such rights are made, and the controversy ensuing therefrom is brought before a tribunal, board, or
officer clothed with power and authority to determine the law and adjudicate the respective rights of
the contending parties.[35]

The Secretary of Agrarian Reform does not fall within the ambit of a tribunal, board, or officer exercising
judicial or quasi-judicial functions. The issuance and enforcement by the Secretary of Agrarian Reform
of the questioned DAR AO No. 01-02, as amended, and Memorandum No. 88 were done in the exercise
of his quasi-legislative and administrative functions and not of judicial or quasi-judicial functions. In
issuing the aforesaid administrative issuances, the Secretary of Agrarian Reform never made any
adjudication of rights of the parties. As such, it can never be said that the Secretary of Agrarian Reform
had acted with grave abuse of discretion amounting to lack or excess of jurisdiction in issuing and
enforcing DAR AO No. 01-02, as amended, and Memorandum No. 88 for he never exercised any judicial
or quasi-judicial functions but merely his quasi-legislative and administrative functions.

Furthermore, as this Court has previously discussed, the instant petition in essence seeks the declaration
by this Court of the unconstitutionality or illegality of the questioned DAR AO No. 01-02, as amended,
and Memorandum No. 88. Thus, the adequate and proper remedy for the petitioner therefor is to file a
Petition for Declaratory Relief, which this Court has only appellate and not original jurisdiction. It is
beyond the province of certiorari to declare the aforesaid administrative issuances unconstitutional and
illegal because certiorari is confined only to the determination of the existence of grave abuse of
discretion amounting to lack or excess of jurisdiction. Petitioner cannot simply allege grave abuse of
discretion amounting to lack or excess of jurisdiction and then invoke certiorari to declare the aforesaid
administrative issuances unconstitutional and illegal. Emphasis must be given to the fact that the writ of
certiorari dealt with in Rule 65 of the 1997 Revised Rules of Civil Procedure is a prerogative writ, never
demandable as a matter of right, "never issued except in the exercise of judicial discretion."[36]

At any rate, even if the Court will set aside procedural infirmities, the instant petition should still be
dismissed.

Executive Order No. 129-A[37] vested upon the DAR the responsibility of implementing the CARP.
Pursuant to the said mandate and to ensure the successful implementation of the CARP, Section 5(c) of
the said executive order authorized the DAR to establish and promulgate operational policies, rules and
regulations and priorities for agrarian reform implementation. Section 4(k) thereof authorized the DAR
to approve or disapprove the conversion, restructuring or readjustment of agricultural lands into non-
agricultural uses. Similarly, Section 5(l) of the same executive order has given the DAR the exclusive
authority to approve or disapprove conversion of agricultural lands for residential, commercial,
industrial, and other land uses as may be provided for by law. Section 7 of the aforesaid executive order
clearly provides that "the authority and responsibility for the exercise of the mandate of the [DAR] and
the discharge of its powers and functions shall be vested in the Secretary of Agrarian Reform x x x."

Under DAR AO No. 01-02, as amended, "lands not reclassified as residential, commercial, industrial or
other non-agricultural uses before 15 June 1988" have been included in the definition of agricultural
lands. In so doing, the Secretary of Agrarian Reform merely acted within the scope of his authority
stated in the aforesaid sections of Executive Order No. 129-A, which is to promulgate rules and
regulations for agrarian reform implementation and that includes the authority to define agricultural
lands for purposes of land use conversion. Further, the definition of agricultural lands under DAR AO
No. 01-02, as amended, merely refers to the category of agricultural lands that may be the subject for
conversion to non-agricultural uses and is not in any way confined to agricultural lands in the context of
land redistribution as provided for under Republic Act No. 6657.

More so, Department of Justice Opinion No. 44, Series of 1990, which Opinion has been recognized in
many cases decided by this Court, clarified that after the effectivity of Republic Act No. 6657 on 15 June
1988 the DAR has been given the authority to approve land conversion.[38] Concomitant to such
authority, therefore, is the authority to include in the definition of agricultural lands "lands not
reclassified as residential, commercial, industrial or other non-agricultural uses before 15 June 1988" for
purposes of land use conversion.

In the same vein, the authority of the Secretary of Agrarian Reform to include "lands not reclassified as
residential, commercial, industrial or other non-agricultural uses before 15 June 1988" in the definition
of agricultural lands finds basis in jurisprudence. In Ros v. Department of Agrarian Reform,[39] this
Court has enunciated that after the passage of Republic Act No. 6657, agricultural lands, though
reclassified, have to go through the process of conversion, jurisdiction over which is vested in the DAR.
However, agricultural lands, which are already reclassified before the effectivity of Republic Act No.
6657 which is 15 June 1988, are exempted from conversion.[40] It bears stressing that the said date of
effectivity of Republic Act No. 6657 served as the cut-off period for automatic reclassifications or
rezoning of agricultural lands that no longer require any DAR conversion clearance or authority.[41] It
necessarily follows that any reclassification made thereafter can be the subject of DAR's conversion
authority. Having recognized the DAR's conversion authority over lands reclassified after 15 June 1988,
it can no longer be argued that the Secretary of Agrarian Reform was wrongfully given the authority and
power to include "lands not reclassified as residential, commercial, industrial or other non-agricultural
uses before 15 June 1988" in the definition of agricultural lands. Such inclusion does not unduly expand
or enlarge the definition of agricultural lands; instead, it made clear what are the lands that can be the
subject of DAR's conversion authority, thus, serving the very purpose of the land use conversion
provisions of Republic Act No. 6657.

The argument of the petitioner that DAR AO No. 01-02, as amended, was made in violation of Section 65
of Republic Act No. 6657, as it covers even those non-awarded lands and reclassified lands by the LGUs
or by way of Presidential Proclamations on or after 15 June 1988 is specious. As explained in
Department of Justice Opinion No. 44, series of 1990, it is true that the DAR's express power over land
use conversion provided for under Section 65 of Republic Act No. 6657 is limited to cases in which
agricultural lands already awarded have, after five years, ceased to be economically feasible and sound
for agricultural purposes, or the locality has become urbanized and the land will have a greater
economic value for residential, commercial or industrial purposes. To suggest, however, that these are
the only instances that the DAR can require conversion clearances would open a loophole in Republic
Act No. 6657 which every landowner may use to evade compliance with the agrarian reform program. It
should logically follow, therefore, from the said department's express duty and function to execute and
enforce the said statute that any reclassification of a private land as a residential, commercial or
industrial property, on or after the effectivity of Republic Act No. 6657 on 15 June 1988 should first be
cleared by the DAR.

This Court held in Alarcon v. Court of Appeals[43] that reclassification of lands does not suffice.
Conversion and reclassification differ from each other. Conversion is the act of changing the current use
of a piece of agricultural land into some other use as approved by the DAR while reclassification is the
act of specifying how agricultural lands shall be utilized for non-agricultural uses such as residential,
industrial, and commercial, as embodied in the land use plan, subject to the requirements and
procedures for land use conversion. In view thereof, a mere reclassification of an agricultural land does
not automatically allow a landowner to change its use. He has to undergo the process of conversion
before he is permitted to use the agricultural land for other purposes.[44]

It is clear from the aforesaid distinction between reclassification and conversion that agricultural lands
though reclassified to residential, commercial, industrial or other non-agricultural uses must still
undergo the process of conversion before they can be used for the purpose to which they are intended.

Nevertheless, emphasis must be given to the fact that DAR's conversion authority can only be exercised
after the effectivity of Republic Act No. 6657 on 15 June 1988.[45] The said date served as the cut-off
period for automatic reclassification or rezoning of agricultural lands that no longer require any DAR
conversion clearance or authority.[46] Thereafter, reclassification of agricultural lands is already subject
to DAR's conversion authority. Reclassification alone will not suffice to use the agricultural lands for
other purposes. Conversion is needed to change the current use of reclassified agricultural lands.

It is of no moment whether the reclassification of agricultural lands to residential, commercial, industrial

or other non-agricultural uses was done by the LGUs or by way of Presidential Proclamations because
either way they must still undergo conversion process. It bears stressing that the act of reclassifying
agricultural lands to non-agricultural uses simply specifies how agricultural lands shall be utilized for
non-agricultural uses and does not automatically convert agricultural lands to non-agricultural uses or
for other purposes. As explained in DAR Memorandum Circular No. 7, Series of 1994, cited in the 2009
case of Roxas & Company, Inc. v. DAMBA-NFSW and the Department of Agrarian Reform,[47]
reclassification of lands denotes their allocation into some specific use and providing for the manner of
their utilization and disposition or the act of specifying how agricultural lands shall be utilized for non-
agricultural uses such as residential, industrial, or commercial, as embodied in the land use plan. For
reclassified agricultural lands, therefore, to be used for the purpose to which they are intended there is
still a need to change the current use thereof through the process of conversion. The authority to do so
is vested in the DAR, which is mandated to preserve and maintain agricultural lands with increased
productivity. Thus, notwithstanding the reclassification of agricultural lands to non-agricultural uses,
they must still undergo conversion before they can be used for other purposes.

Even reclassification of agricultural lands by way of Presidential Proclamations to non-agricultural uses,

such as school sites, needs conversion clearance from the DAR. We reiterate that reclassification is
different from conversion. Reclassification alone will not suffice and does not automatically allow the
landowner to change its use. It must still undergo conversion process before the landowner can use
such agricultural lands for such purpose.[48] Reclassification of agricultural lands is one thing,
conversion is another. Agricultural lands that are reclassified to non-agricultural uses do not ipso facto
allow the landowner thereof to use the same for such purpose. Stated differently, despite having
reclassified into school sites, the landowner of such reclassified agricultural lands must apply for
conversion before the DAR in order to use the same for the said purpose.

Any reclassification, therefore, of agricultural lands to residential, commercial, industrial or other non-
agricultural uses either by the LGUs or by way of Presidential Proclamations enacted on or after 15 June
1988 must undergo the process of conversion, despite having undergone reclassification, before
agricultural lands may be used for other purposes.

It is different, however, when through Presidential Proclamations public agricultural lands have been
reserved in whole or in part for public use or purpose, i.e., public school, etc., because in such a case,
conversion is no longer necessary. As held in Republic v. Estonilo,[49] only a positive act of the
President is needed to segregate or reserve a piece of land of the public domain for a public purpose. As
such, reservation of public agricultural lands for public use or purpose in effect converted the same to
such use without undergoing any conversion process and that they must be actually, directly and
exclusively used for such public purpose for which they have been reserved, otherwise, they will be
segregated from the reservations and transferred to the DAR for distribution to qualified beneficiaries
under the CARP.[50] More so, public agricultural lands already reserved for public use or purpose no
longer form part of the alienable and disposable lands of the public domain suitable for agriculture.[51]
Hence, they are outside the coverage of the CARP and it logically follows that they are also beyond the
conversion authority of the DAR.
Clearly from the foregoing, the Secretary of Agrarian Reform did not act without jurisdiction or in excess
of jurisdiction or with grave abuse of discretion amounting to lack or excess of jurisdiction in (1)
including lands not reclassified as residential, commercial, industrial or other non-agricultural uses
before 15 June 1988 in the definition of agricultural lands under DAR AO No. 01-02, as amended, and;
(2) issuing and enforcing DAR AO No. 01-02, as amended, subjecting to DAR's jurisdiction for conversion
lands which had already been reclassified as residential, commercial, industrial or for other non-
agricultural uses on or after 15 June 1988.

Similarly, DAR AO No. 01-02, as amended, providing that the reclassification of agricultural lands by
LGUs shall be subject to the requirements of land use conversion procedure or that DAR's approval or
clearance must be secured to effect reclassification, did not violate the autonomy of the LGUs.

Section 20 of Republic Act No. 7160 states that:

SECTION 20. Reclassification of Lands. - (a) A city or municipality may, through an ordinance passed by
the sanggunian after conducting public hearings for the purpose, authorize the reclassification of
agricultural lands and provide for the manner of their utilization or disposition in the following cases: (1)
when the land ceases to be economically feasible and sound for agricultural purposes as determined by
the Department of Agriculture or (2) where the land shall have substantially greater economic value for
residential, commercial, or industrial purposes, as determined by the sanggunian concerned: Provided,
That such reclassification shall be limited to the following percentage of the total agricultural land area
at the time of the passage of the ordinance:

xxxx

(3) For fourth to sixth class municipalities, five percent (5%): Provided, further, That agricultural lands
distributed to agrarian reform beneficiaries pursuant to Republic Act Numbered Sixty-six hundred fifty-
seven (R.A. No. 6657), otherwise known as "The Comprehensive Agrarian Reform Law," shall not be
affected by the said reclassification and the conversion of such lands into other purposes shall be
governed by Section 65 of said Act.

xxxx
(e) Nothing in this Section shall be construed as repealing, amending, or modifying in any manner the
provisions of R.A. No. 6657.

The aforequoted provisions of law show that the power of the LGUs to reclassify agricultural lands is not
absolute. The authority of the DAR to approve conversion of agricultural lands covered by Republic Act
No. 6657 to non-agricultural uses has been validly recognized by said Section 20 of Republic Act No.
7160 by explicitly providing therein that, "nothing in this section shall be construed as repealing or
modifying in any manner the provisions of Republic Act No. 6657."

DAR AO No. 01-02, as amended, does not also violate the due process clause, as well as the equal
protection clause of the Constitution. In providing administrative and criminal penalties in the said
administrative order, the Secretary of Agrarian Reform simply implements the provisions of Sections 73
and 74 of Republic Act No. 6657, thus:

Sec. 73. Prohibited Acts and Omissions. - The following are prohibited:

xxxx

(c) The conversion by any landowner of his agricultural land into any non-agricultural use with intent to
avoid the application of this Act to his landholdings and to disposes his tenant farmers of the land tilled
by them;

xxxx

(f) The sale, transfer or conveyance by a beneficiary of the right to use or any other usufructuary right
over the land he acquired by virtue of being a beneficiary, in order to circumvent the provisions of this
Act.

xxxx
Sec. 74. Penalties. ─ Any person who knowingly or willfully violates the provisions of this Act shall be
punished by imprisonment of not less than one (1) month to not more than three (3) years or a fine of
not less than one thousand pesos (P1,000.00) and not more than fifteen thousand pesos (P15,000.00),
or both, at the discretion of the court.

If the offender is a corporation or association, the officer responsible therefor shall be criminally liable.

And Section 11 of Republic Act No. 8435, which specifically provides:

Sec. 11. Penalty for Agricultural Inactivity and Premature Conversion. - x x x.

Any person found guilty of premature or illegal conversion shall be penalized with imprisonment of two
(2) to six (6) years, or a fine equivalent to one hundred percent (100%) of the government's investment
cost, or both, at the discretion of the court, and an accessory penalty of forfeiture of the land and any
improvement thereon.

In addition, the DAR may impose the following penalties, after determining, in an administrative
proceedings, that violation of this law has been committed:

a. Consolation or withdrawal of the authorization for land use conversion; and

b. Blacklisting, or automatic disapproval of pending and subsequent conversion applications that they
may file with the DAR.

Contrary to petitioner's assertions, the administrative and criminal penalties provided for under DAR AO
No. 01-02, as amended, are imposed upon the illegal or premature conversion of lands within DAR's
jurisdiction, i.e., "lands not reclassified as residential, commercial, industrial or for other non-agricultural
uses before 15 June 1998."
The petitioner's argument that DAR Memorandum No. 88 is unconstitutional, as it suspends the land use
conversion without any basis, stands on hollow ground.

It bears emphasis that said Memorandum No. 88 was issued upon the instruction of the President in
order to address the unabated conversion of prime agricultural lands for real estate development
because of the worsening rice shortage in the country at that time. Such measure was made in order to
ensure that there are enough agricultural lands in which rice cultivation and production may be carried
into. The issuance of said Memorandum No. 88 was made pursuant to the general welfare of the public,
thus, it cannot be argued that it was made without any basis.

WHEREFORE, premises considered, the instant Petition for Certiorari is DISMISSED. Costs against
petitioner.
 [G.R. No. 127876. December 17, 1999.]

ROXAS & CO., INC., v. THE HONORABLE COURT OF APPEALS, DEPARTMENT OF AGRARIAN REFORM,
SECRETARY OF AGRARIAN REFORM, DAR REGIONAL DIRECTOR FOR REGION IV, MUNICIPAL AGRARIAN
REFORM OFFICER OF NASUGBU, BATANGAS and DEPARTMENT OF AGRARIAN REFORM
ADJUDICATION BOARD, Respondents.

This case involves three (3) haciendas in Nasugbu, Batangas owned by petitioner and the validity of the
acquisition of these haciendas by the government under Republic Act No. 6657 the Comprehensive
Agrarian Reform Law of 1998.chanrobles.com.ph : virtual law library

Petitioner Roxas & Co. is a domestic corporation and is the registered owner of three haciendas, namely,
Haciendas Palico, Banilad and Caylaway, all located in the Municipality of Nasugbu, Batangas. Hacienda
Palico is 1,024 hectares in area and is registered under Transfer Certificate of Title (TCT) No. 985. This
land is covered by Tax Declaration Nos. 0465, 0466, 0468, 0470, 0234 and 0354. Hacienda Banilad is
1,050 hectares in area, registered under TCT No 924 and covered by Tax Declaration Nos. 0236, 0237
and 0390. Hacienda Caylaway is 867,4571 hectares in area and is registered under TCT Nos. T-44662, T-
44663, T-44664 and T-44665.

The events of this case occurred during the incumbency of then President Corazon C Aquino. In February
1986, President Aquino issued Proclamation No. 3 promulgating a Provisional Constitution. As head of
the provisional government, the President exercised legislative power "until a legislature is elected and
convened under a new Constitution." 1 In the exercise of this legislative power the President signed on
July 22, 1987, Proclamation No 131 instituting a Comprehensive Agrarian Reform Program and Executive
Order No. 229 providing the mechanisms necessary to initially implement the program.

On July 27, 1987, the Congress of the Philippines formally convened and took over legislative power
from the President. 2 This Congress passed Republic Act No. 6657, the Comprehensive Agrarian Reform
Law (CARL) of 1988. The Act was signed by the President on June 10, 1988 and took effect on June 15,
1988. The Act was signed by the President on June 10, 1988 and took effect on June 15, 1988.
Before the law’s effectivity, on May 6, 1988, petitioner filed with respondent DAR a voluntary offer to
sell Hacienda Caylaway pursuant to the provisions of E.O. No. 229. Haciendas Palico and Banilad were
later placed under compulsory acquisition by respondent DAR in accordance with the CARL.

Hacienda Palico

On September 29, 1989, respondent DAR, through respondent Municipal Agrarian Reform Officer
(MARO) of Nasugbu, Batangas, sent a notice entitled "Invitation to Parties" to petitioner. The Invitation
was addressed to "Jaime Pimentel, Hda. Administrator, Hda. Palico" 3 Therein, the MARO invited
petitioner to a conference on October 6, 1989 at the DAR office in Nasugbu to discuss the results of the
DAR investigation of Hacienda Palico, which was "scheduled for compulsory acquisition this year under
the Comprehensive Agrarian Reform Program." 4

On October 25, 1989, the MARO completed three (3) Investigation Reports after investigation and ocular
inspection of the Hacienda. In the first Report, the MARO found that 270 hectares under Tax Declaration
Nos. 465, 466, 468 and 470 were "flat to undulating (0-8% slope)" and actually occupied and cultivated
by 34 tillers of sugarcane. 5 In the second Report, the MARO identified as "flat to undulating"
approximately 339 hectares under Tax Declaration No. 0234 which also had several actual occupants
and tillers of sugarcane; 6 while in the third Report, the MARO found approximately 75 hectares under
Tax Declaration No. 0354 as "flat to undulating" with 33 actual occupants and tillers also of sugarcane. 7

On October 7. 1989, a "Summary Investigation Report" was submitted and signed jointly by the MARO
representatives of the Barangay Agrarian Reform Committee (BARC) and Land Bank of the Philippines
(LBP), and by the Provincial Agrarian Reform Officer (PARO). The Report recommended that 333,0800
hectares of Hacienda Palico be subject to compulsory acquisition at a value of P6,807,622.20. 8 The
following day, October 28, 1989, two (2) more Summary Investigation Reports were submitted by the
same officers and representatives. They recommended that 270,0876 hectares and 75,3800 hectares be
placed under compulsory acquisition at a compensation of P8,109,739.00 and P2,188,195.47,
respectively. 9

On December 12, 1989, respondent DAR through then Department Secretary Miriam D. Santiago sent a
"Notice of Acquisition" to petitioner. The Notice was addressed as follows:jgc:chanrobles.com.ph

"Roxas y Cia, Limited

Soriano Bldg., Plaza Cervantes

Manila, Metro Manila." 10

Petitioner was informed that 1,023.999 hectares of its land in Hacienda Palico were subject to
immediate acquisition and distribution by the government under the CARL; that based on the DAR’s
valuation criteria. The government was offering compensation of P3.4 million for 333,0800 hectares;
that whether this offer was to be accepted or rejected, petitioner was to inform the Bureau of Land
Acquisition and Distribution (BLAD) of the DAR; that in case of petitioner’s rejection or failure to reply
within thirty days, respondent DAR shall conduct summary administrative proceedings with notice to
petitioner to determine just compensation for the land; that if petitioner accepts respondent DAR’s
offer, or upon deposit of the compensation with an accessible bank if it rejects the same, the DAR shall
take immediate possession of the land. 11

Almost two years later, on September 26, 1991, the DAR Regional Director sent to the LBP Land
Valuation Manager three (3) separate Memoranda entitled "Request to Open Trust Account." Each
Memoranda requested that a trust account representing the valuation of three portions of Hacienda
Palico be opened in favor of the petitioner in view of the latter’s rejection on its offered value. 12

Meanwhile in a letter dated May 4, 1993, petitioner applied with the DAR for conversion of Haciendas
Palico and Banilad from agricultural to non-agricultural lands under the provisions of the CARL. 13 On
July 14, 1993, petitioner sent a letter to the DAR Regional Director reiterating its request for conversion
of the two haciendas. 14

Despite petitioner’s application for conversion, respondent DAR proceeded with the acquisition of the
two Haciendas. The LBP trust accounts as compensation for Hacienda Palico were replaced by
respondent DAR with cash and LBP bonds. 15 On October 22, 1993, from the mother title of TCT No. 985
of the Hacienda, respondent DAR registered Certificate of Land Ownership Award (CLOA) No. 6654. On
October 30, 1993, CLOA’s were distributed to farmer beneficiaries. 16

Hacienda Banilad
On August 23, 1989, respondent DAR, through respondent MARO of Nasugbu, Batangas, sent a notice to
petitioner addressed as follows:jgc:chanrobles.com.ph

"Mr. Jaime Pimentel

Hacienda Administrator

Hacienda Banilad

Nasugbu, Batangas" 17

The MARO informed Pimentel that Hacienda Banilad was subject to compulsory acquisition under the
CARL; that should petitioner wish to avail of the other schemes such as Voluntary Offer to Sell or
Voluntary Land Transfer, respondent DAR was willing to provide assistance thereto. 18

On September 18, 1989, the MARO sent an "Invitation to Parties" again to Pimentel inviting the latter to
attend a conference on September 21, 1989 at the MARO Office in Nasugbu to discuss the results of the
MARO’s investigation over Hacienda Banilad. 19

On September 21, 1989, the same day the conference was held, the MARO submitted two (2) Reports.
In his first Report, he found that approximately 709 hectares of land under Tax Declaration Nos. 0237
and 0236 were "flat to undulating (0-8% slope)." On this area were discovered 162 actual occupants and
tillers of sugarcane. 20 In the second Report, it was found that approximately 235 hectares under Tax
Declaration No. 0390 were "flat to undulating," on which were 92 actual occupants and tillers of
sugarcane. 21

The results of these Reports were discussed at the conference. Present in the conference were
representatives of the prospective farmer beneficiaries, the BARC, the LBP, and Jaime Pimentel on
behalf of the landowner. 22 After the meeting, on the same day, September 21, 1989, a Summary
Investigation Report was submitted jointly by the MARO, representatives of the BARC, LBP, and the
PARO. They recommended that after ocular inspection of the property, 234,6498 hectares under Tax
Declaration No. 0390 be subject to compulsory acquisition and distribution by CLOA. 23 The following
day, September 22, 1989, a second Summary Investigation was submitted by the same officers. They
recommended that 737.2590 hectares under Tax Declaration Nos. 0236 and 0237 be likewise placed
under compulsory acquisition for distribution. 24

On December 12, 1989, respondent DAR, through the Department Secretary, sent to petitioner two (2)
separate "Notices of Acquisition" over Hacienda Banilad. These Notices were sent on the same day as
the Notice of Acquisition over Hacienda Palico. Unlike the Notice over Hacienda Palico, however, the
Notices over Hacienda Banilad were addressed to:chanroblesvirtuallawlibrary:red

"Roxas y Cia. Limited

7th Floor, Cacho-Gonzales Bldg. 101 Aguirre St., Leg.

Makati, Metro Manila."25cralaw:red

Respondent DAR offered petitioner compensation of P15,108,995.52 for 729.4190 hectares and
P4,428,496.00 for 234.6498 hectares. 26

On September 26, 1991, the DAR Regional Director sent to the LBP Land Valuation Manager a "Request
to Open Trust Account" in petitioner’s name as compensation for 234.6493 hectares of Hacienda
Banilad. 27 A second "Request to Open Trust Account" was sent on November 18, 1991 over 723.4130
hectares of said Hacienda. 28

On December 18, 1991, the LBP certified that the amounts of P4,428,496.40 and P21,234,468.78 in cash
and LBP bonds had been earmarked as compensation for petitioner’s land in Hacienda Banilad. 29

On May 4, 1993, petitioner applied for conversion of both Haciendas Palico and Banilad.

Hacienda Caylaway
Hacienda Caylaway was voluntarily offered for sale to the government on May 6, 1988 before the
effectivity of the CARL. The Hacienda has a total area of 867.4571 hectares and is covered by four (4)
titles — TCT Nos. T-44662, T-44663, T-44664 and T-44665. On January 12, 1989, respondent DAR,
through the Regional Director for Region IV, sent to petitioner two (2) separate Resolutions accepting
petitioner’s voluntary offer to sell Hacienda Caylaway, particularly TCT Nos. T-44664 and T-44663. 30
The Resolutions were addressed to:jgc:chanrobles.com.ph

"Roxas & Company, Inc.

7th Flr. Cacho-Gonzales Bldg.

Aguirre, Legaspi Village

Makati, M.M." 31

On September 4, 1990, the DAR Regional Director issued two separate Memoranda to the LBP Regional
Manager requesting for the valuation of the land under TCT Nos. T-44664 and T-44663. 32 On the same
day, respondent DAR through the Regional Director sent to petitioner a "Notice of Acquisition" over
241.6777 hectares under TCT No. T-44664 and 533.8180 hectares under TCT No. T-44663. 33 Like the
Resolutions of Acceptance, the Notice of Acquisition was addressed to petitioner at its office in Makati,
Metro Manila.

Nevertheless, on August 6, 1992, Petitioner, through its President, Eduardo J. Roxas, set a letter to the
Secretary of respondent DAR withdrawings its VOS of Hacienda Caylaway. The Sangguniang Bayan of
Nasugbu, Batangas allegedly authorized the reclassification of Hacienda Caylaway from agricultural to
non-agricultural. As a result, petitioner informed respondent DAR that it was applying for conversion of
Hacienda Caylaway from agricultural to other uses. 34

In a letter dated September 28, 1992, respondent DAR Secretary informed petitioner that a
reclassification of the land would not exempt it from agrarian reform. Respondent Secretary also denied
petitioner’s withdrawal of the VOS on the ground that withdrawal could only be based on specific
grounds such as unsuitability of the soil for agriculture, or if the slope of the land is over 18 degrees and
that the land is undeveloped. 35

Despite the denial of the VOS withdrawal of Hacienda Caylaway, on May 11, 1993, petitioner filed its
application for conversion of both Haciendas Palico and Banilad. 36 On July 14, 1993, Petitioner, through
its President, Eduardo Roxas, reiterated its request to withdraw the VOS over Hacienda Caylaway in light
of the following:jgc:chanrobles.com.ph

"1) Certification issued by Conrado I. Gonzales, Officer-in-Charge, Department of Agriculture, Region 4,

4th Floor, ATI (BA) Bldg., Diliman, Quezon City dated March 1, 1993 stating that the lands subject of
referenced titles "are not feasible and economically sound for further agricultural development."cralaw
virtua1aw library

2) Resolution No. 19 of the Sangguniang Bayan of Nasugbu, Batangas approving the Zoning Ordinance
reclassifying areas covered by the referenced titles to non-agricultural which was enacted after
extensive consultation with government agencies, including [the Department of Agrarian Reform], and
the requisite public hearings.

3) Resolution No. 106 of the Sangguniang Panlalawigan of Batangas dated March 8, 1993 approving the
Zoning Ordinance enacted by the Municipality of Nasugbu.

4) Letter dated December 15, 1992 issued by Reynaldo U. Garcia of the Municipal Planning and
Development, Coordinator and Deputized Zoning Administrator addressed to Mrs. Alicia P. Logarta
advising that the Municipality of Nasugbu, Batangas has no objection to the conversion of the lands
subject of referenced titles to non-agricultural." 37

On August 24, 1993, petitioner instituted Case No. N-0017-96-46 (BA) with respondent DAR Adjudication
Board (DARAB) praying for the cancellation of the CLOA’s issued by respondent DAR in the name of
several persons. Petitioner alleged that the Municipality of Nasugbu, where the haciendas are located,
had been declared a tourist zone, that the land is not suitable for agricultural production, and that the
Sangguniang Bayan of Nasugbu had reclassified the land to non-agricultural.
In a Resolution dated October 14, 1993, respondent DARAB held that the case involved the prejudicial
question of whether the property was subject to agrarian reform, hence, this question should be
submitted to the Office of the Secretary of Agrarian Reform for determination. 38

On October 29, 1993, petitioner filed with the Court of Appeals CA-G.R. SP No. 32484. It questioned the
expropriation of its properties under the CARL and the denial of due process in the acquisition of its
landholdings.

Meanwhile, the petition for conversion of the three hectares was denied by the MARO on November 8,
1993.

Petitioner’s petition was dismissed by the Court of Appeals on April 28, 1994. 39 Petitioner moved for
reconsideration but the motion was denied on January 17, 1997 by respondent court. 40

Hence, this recourse. Petitioner assigns the following errors:jgc:chanrobles.com.ph

"A. RESPONDENT COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT PETITIONER’S CAUSE OF
ACTION IS PREMATURE FOR FAILURE TO EXHAUST ADMINISTRATIVE REMEDIES IN VIEW OF THE PATENT
ILLEGALITY OF THE RESPONDENTS’ ACTS, THE IRREPARABLE DAMAGE CAUSED BY SAID ILLEGAL ACTS,
AND THE ABSENCE OF A PLAIN, SPEEDY AND ADEQUATE REMEDY IN THE ORDINARY COURSE OF LAW —
ALL OF WHICH ARE EXCEPTIONS TO THE SAID DOCTRINE.

B. RESPONDENT COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT PETITIONER’S LANDHOLDINGS

ARE SUBJECT TO COVERAGE UNDER THE COMPREHENSIVE AGRARIAN REFORM LAW, IN VIEW OF THE
UNDISPUTED FACT THAT PETITIONER’S LANDHOLDINGS HAVE BEEN CONVERTED TO NON-
AGRICULTURAL USES BY PRESIDENTIAL PROCLAMATION NO. 1520 WHICH DECLARED THE MUNICIPALITY
OF NASUGBU, BATANGAS AS A TOURIST ZONE, AND THE ZONING ORDINANCE OF THE MUNICIPALITY OF
NASUGBU RE-CLASSIFYING CERTAIN PORTIONS OF PETITIONER’S LANDHOLDINGS AS NON-
AGRICULTURAL. BOTH OF WHICH PLACE SAID LANDHOLDINGS OUTSIDE THE SCOPE OF AGRARIAN
REFORM, OR AT THE VERY LEAST ENTITLE PETITIONER TO APPLY FOR CONVERSION AS CONCEDED BY
RESPONDENT DAR.
C. RESPONDENT OF APPEALS GRAVELY ERRED WHEN IT FAILED TO DECLARE THE PROCEEDINGS BEFORE
RESPONDENT DAR VOID FOR FAILURE TO OBSERVE DUE PROCESS, CONSIDERING THAT RESPONDENTS
BLATANTLY DISREGARDED THE PROCEDURE FOR THE ACQUISITION OF PRIVATE LANDS UNDER R.A.
6657, MORE PARTICULARLY, IN FAILING TO GIVE DUE NOTICE TO THE PETITIONER AND TO PROPERLY
IDENTIFY THE SPECIFIC AREAS SOUGHT TO BE ACQUIRED.chanrobles virtual lawlibrary

D. RESPONDENT COURT OF APPEALS GRAVELY ERRED WHEN IT FAILED TO RECOGNIZE THAT PETITIONER
WAS BRAZENLY AND ILLEGALLY DEPRIVED OF ITS PROPERTY WITHOUT JUST COMPENSATION,
CONSIDERING THAT PETITIONER WAS NOT PAID JUST COMPENSATION BEFORE IT WAS
UNCEREMONIOUSLY STRIPPED OF ITS LANDHOLDINGS THROUGH THE ISSUANCE OF CLOA’S TO ALLEGED
FARMER BENEFICIARIES IN VIOLATION OF R.A. 6657. 41

The assigned errors involve three (3) principal issues: (1) whether this Court can take cognizance of this
petition despite petitioner’s failure to exhaust administrative remedies; (2) whether the acquisition
proceedings over the three haciendas were valid and in accordance with law; and (3) assuming the
haciendas may be reclassified from agricultural to non-agricultural, whether this court has the power to
rule on this issue.

I. Exhaustion of Administrative Remedies

In its first assigned error, petitioner claims that respondent Court of Appeals gravely erred in finding that
petitioner failed to exhaust administrative remedies. As a general rule, before a party may be allowed to
invoke the jurisdiction of the courts of justice, he is expected to have exhausted all means of
administrative redress. This is not absolute, however. There are instances when judicial action may be
resorted to immediately. Among these exceptions are: (1) when the question raised is purely legal; (2)
when the administrative body is in estoppel; (3) when the act complained of is patently illegal; (4) when
there is urgent need for judicial intervention; (5) when the respondent acted in disregard of due
process; (6) when the respondent is a department secretary whose acts, as an alter ego of the President,
bear the implied or assumed approval of the latter; (7) when irreparable damage will be suffered; (8)
when there is no other plain, speedy and adequate remedy; (9) when strong public interest is involved;
(10) when the subject of the controversy is private land; and (11) in quo warranto proceedings. 42

Petitioner rightly sought immediate redress in the courts. There was a violation of its rights and to
require it to exhaust administrative remedies before the DAR itself was not a plain, speedy and
adequate remedy.
Respondent DAR issued Certificates of Land Ownership Award (CLOA’S) to farmer beneficiaries over
portions of petitioner’s land without just compensation to petitioner. A Certificate of Land Ownership
Award (CLOA) is evidence of ownership of land by a beneficiary under R.A. 6657, the Comprehensive
Agrarian Reform Law of 1988. 43 Before this may be awarded to a farmer beneficiary, the land must first
be acquired by the State from the landowner and ownership transferred to the former. The transfer of
possession and ownership of the land to the government are conditioned upon the receipt by the
landowner of the corresponding payment or deposit by the DAR of the compensation with an accessible
bank. Until then, title remains with the landowner. 44 There was no receipt by petitioner of any
compensation for any of the lands acquired by the government.

The kind of compensation to be paid the landowner is also specific. The law provides that the deposit
must be made only in "cash" or "LBP bonds." 45 Respondent DAR’s opening of trust account deposits in
petitioner’s name with the Land Bank of the Philippines does not constitute payment under the law.
Trust account deposits are not cash or LBP bonds. The replacement of the trust account with cash or LBP
bonds did not ipso facto cure the lack of compensation; for essentially, the determination of this
compensation was marred by lack of due process. In fact, in the entire acquisition proceedings,
respondent DAR disregarded the basic requirements of administrative due process. Under these
circumstances, the issuance of the CLOA’s to farmer beneficiaries necessitated immediate judicial action
on the part of the petitioner.

II. The Validity of the Acquisition Proceedings Over the Haciendas

Petitioner’s allegation of lack of due process into the validity of the acquisition proceedings themselves.
Before we rule on this matter, however, there is need to lay down the procedure in the acquisition of
private lands under the provisions of the law.

A. Modes of Acquisition of Land under R.A. 6657

Republic Act No. 6657, the Comprehensive Agrarian Reform Law of 1988 (CARL), provides for two (2)
modes of acquisition of private land: compulsory and voluntary. The procedure for the compulsory
acquisition of private lands is set forth in Section 16 of R.A. 6657, viz:jgc:chanrobles.com.ph
"SECTION 16. Procedure for Acquisition of Private Lands. — For purposes of acquisition of private lands,
the following procedures shall be followed:chanrob1es virtual 1aw library

a) After having identified the land, the landowners and the beneficiaries, the DAR shall send its notice to
acquire the land to the owners thereof, by personal delivery or registered mail, and post the same in a
conspicuous place in the municipal building and barangay hall of the place where the property is
located. Said notice shall contain the offer of the DAR to pay a corresponding value in accordance with
the valuation set forth in Sections 17, 18, and other pertinent provisions hereof.

b) Within thirty (30) days from the date of receipt of written notice by personal delivery or registered
mail, the landowner, his administrator or representative shall inform the DAR of his acceptance or
rejection of the offer.

c) If the landowner accepts the offer of the DAR, the LBP shall pay the landowner the purchase price of
the land within thirty (30) days after he executes and delivers a deed of transfer in favor of the
Government and surrenders the Certificate of Title and other muniments of title.

d) In case of rejection or failure to reply, the DAR shall conduct summary administrative proceedings to
determine the compensation for the land requiring the landowner, the LBP and other interested parties
to submit evidence as to the just compensation for the land, within fifteen (15) days from receipt of the
notice. After the expiration of the above period, the matter is deemed submitted for decision. The DAR
shall decide the case within thirty (30) days after it is submitted for decision.

e) Upon receipt by the landowner of the corresponding payment, or, in case of rejection or no response
from the landowner, upon the deposit with an accessible bank designated by the DAR of the
compensation in cash or in LBP bonds in accordance with this Act, the DAR shall take immediate
possession of the land and shall request the proper Register of Deeds to issue a Transfer Certificate of
Title (TCT) in the name of the Republic of the Philippines. The DAR shall thereafter proceed with the
redistribution of the land to the qualified beneficiaries.

f) Any party who disagrees with the decision may bring the matter to the court of proper jurisdiction for
final determination of just compensation."cralaw virtua1aw library
In the compulsory acquisition of private lands, the landholding, the landowners and the farmer
beneficiaries must first be identified. After identification, the DAR shall send a Notice of Acquisition to
the landowner, by personal delivery or registered mail, and post it in a conspicuous place in the
municipal building and barangay hall of the place where the property is located. Within thirty days from
receipt of the Notice of Acquisition, the landowner, his administrator or representative shall inform the
DAR of his acceptance or rejection of the offer. If the landowner accepts, he executes and delivers a
deed of transfer in favor of the government and surrenders the certificate of title. Within thirty days
from the execution of the deed of transfer, the Land Bank of the Philippines (LBP) pays the owner the
purchase price. If the landowner rejects the DAR’s offer or fails to make a reply, the DAR conducts
summary administrative proceedings to determine just compensation for the land. The landowner, the
LBP representative and other interested parties may submit evidence on just compensation within
fifteen days from notice. Within thirty days from submission, the DAR shall decide the case and inform
the owner of its decision and the amount of just compensation. Upon receipt by the owner of the
corresponding payment, or, in case of rejection or lack of response from the latter, the DAR shall deposit
the compensation in cash or in LBP bonds with an accessible bank. The DAR shall immediately take
possession of the land and cause the issuance of a transfer certificate of title in the name of the Republic
of the Philippines. The land shall then be redistributed to the farmer beneficiaries. Any party may
question the decision of the DAR in the regular courts for final determination of just compensation.

The DAR has made compulsory acquisition the priority mode of land acquisition to hasten the
implementation of the Comprehensive Agrarian Reform Program (CARP). 46 Under Section 16 of the
CARL, the first step in compulsory acquisition is the identification of the land, the landowners and the
beneficiaries. However, the law is silent on how the identification process must be made. To fill in this
gap, the DAR issued on July 26, 1989 Administrative Order NO. 12, Series of 1989, which set the
operating procedure in the identification of such lands. The procedure is as
follows:jgc:chanrobles.com.ph

"II. OPERATING PROCEDURE

A. The Municipal Agrarian Reform Officer with the assistance of the pertinent Barangay Agrarian Reform
Committee (BARC), shall:chanrob1es virtual 1aw library

1. Update the masterlist of all agricultural lands covered under the CARP in his area of responsibility. The
masterlist shall include such information as required under the attached CARP Masterlist Form which
shall include the name of the landowner, landholding area, TCT/OCT number, and tax declaration
number.
2. Prepare a Compulsory Acquisition Case Folder (CACF) for each title (OCT/TCT) or landholding covered
under Phase I and II of the CARP except those for which the landowners have already filed applications
to avail of other modes of land acquisition. A case folder shall contain the following duly accomplished
forms:chanrob1es virtual 1aw library

a) CARP CA Form 1 — MARO Investigation Report

b) CARP CA Form 2 — Summary Investigation Report of Findings and Evaluation

c) CARP CA Form 3 — Applicant’s Information Sheet

d) CARP CA Form 4 — Beneficiaries Undertaking

e) CARP CA Form 5 — Transmittal Report to the PARO

The MARO/BARC shall certify that all information contained in the above-mentioned forms have been
examined and verified by him and that the same are true and correct.

3. Send a Notice of Coverage and a letter of invitation to a conference/meeting to the landowner

covered by the Compulsory Case Acquisition Folder. Invitations to the said conference/meeting shall
also be sent to the prospective farmer-beneficiaries, the BARC representative(s), the Land Bank of the
Philippines (LBP) representative, and other interested parties to discuss the inputs to the valuation of
the property. He shall discuss the MARO/BARC investigation report and solicit the views, objection,
agreements or suggestions of the participants thereon. The landowner shall also be asked to indicate his
retention area. The minutes of the meeting shall be signed by all participants in the conference and shall
form an integral part of the CACF.

4. Submit all completed case folders to the Provincial Agrarian Reform Officer
(PARO).chanroblesvirtualawlibrary
B. The PARO shall:chanrob1es virtual 1aw library

1. Ensure that the individual case folders are forwarded to him by his MAROs.

2. Immediately upon receipt of a case folder, compute the valuation of the land in accordance with A.O.
No. 6, Series of 1988. 47 The valuation worksheet and the related CACF valuation forms shall be duly
certified correct by the PARO and all the personnel who participated in the accomplishment of these
forms.

3. In all cases, the PARO may validate the report of the MARO through ocular inspection and verification
of the property. This ocular inspection and verification shall be mandatory when the computed value
exceeds 500,000 per estate.

4. Upon determination of the valuation, forward the case folder, together with the duly accomplished
valuation forms and his recommendations, to the Central Office. The LBP representative and the MARO
concerned shall be furnished a copy each of his report.

C. DAR Central Office, specifically through the Bureau of Land Acquisition and Distribution (BLAD),
shall:chanrob1es virtual 1aw library

1. Within three days from receipt of the case folder from the PARO, review, evaluate and determine the
final land valuation of the property covered by the case folder. A summary review and evaluation report
shall be prepared and duly certified by the BLAD Director and the personnel directly participating in the
review and final valuation.

2. Prepare, for the signature of the Secretary or her duly authorized representative, a Notice of
Acquisition (CARP CA Form 8) for the subject property. Serve the Notice to the landowner personally or
through registered mail within three days from its approval. The Notice shall include, among others, the
area subject of compulsory acquisition, and the amount of just compensation offered by DAR.
3. Should the landowner accept the DAR’s offered value, the BLAD shall prepare and submit to the
Secretary for approval the Order of Acquisition. However, in case of rejection or non-reply, the DAR
Adjudication Board (DARAB) shall conduct a summary administrative hearing to determine just
compensation, in accordance with the procedures provided under Administrative Order No. 13, Series of
1989. Immediately upon receipt of the DARAB’s decision on just compensation, the BLAD shall prepare
and submit to the Secretary for approval the required Order of Acquisition.

4. Upon the landowner’s receipt of payment, in case of acceptance, or upon deposit of payment in the
designated bank, in case of rejection or non-response, the Secretary shall immediately direct the
pertinent Register of Deeds to issue the corresponding Transfer Certificate of Title (TCT) in the name of
the Republic of the Philippines. Once the property is transferred, the DAR, through the PARO, shall take
possession of the land for redistribution to qualified beneficiaries."cralaw virtua1aw library

Administrative Order No. 12, Series of 1989 requires that the Municipal Agrarian Reform Officer (MARO)
keep an updated master list of all agricultural lands under the CARP in his area of responsibility
containing all the required information. The MARO prepares a Compulsory Acquisition Case Folder
(CACF) for each title covered by CARP. The MARO then sends the landowner a "Notice of Coverage" and
a "letter of invitation" to a "conference/meeting" over the land covered by the CACF. He also sends
invitations to the prospective farmer-beneficiaries, the representatives of the Barangay Agrarian Reform
Committee (BARC), the Land Bank of the Philippines (LBP) and other interested parties to discuss the
inputs to the valuation of the property and solicit views, suggestions, objections or agreements of the
parties. At the meeting, the landowner is asked to indicate his retention area.

The MARO shall make a report of the case to the Provincial Agrarian Reform Officer (PARO) who shall
complete the valuation of the land. Ocular inspection and verification of the property by the PARO shall
be mandatory when the computed value of the estate exceeds P500,000.00 Upon determination of the
valuation, the PARO shall forward all papers together with his recommendation to the Central Office of
the DAR. The DAR Central Office, specifically, the Bureau of Land Acquisition and Distribution (BLAD),
shall review, evaluate and determine the final land valuation of the property. The BLAD shall prepare, on
the signature of the Secretary or his duly authorized representative, a Notice of Acquisition for the
subject property. 48 From this point, the provisions of Section 16 of R.A. 6657 then apply. 49

For a valid implementation of the CAR Program, two notices are required: (1) the Notice of Coverage
and letter of invitation to a preliminary conference sent to the landowner, the representatives of the
BARC, LBP, farmer beneficiaries and other interested parties pursuant to DAR A.O. No. 12, Series of
1989; and (2) the Notice of Acquisition sent to the landowner under Section 16 of the CARL.
The importance of the first notice, i.e., the Notice of Coverage and the letter of invitation to the
conference, and its actual conduct cannot be understated. They are steps designed to comply with the
requirements of administrative due process. The implementation of the CARL is an exercise of the
State’s police power and the power of eminent domain. To the extent that the CARL prescribes
retention limits to the landowners, there is an exercise of police power for the regulation of private
property in accordance with the Constitution. 50 But where, to carry out such regulation, the owners are
deprived of lands they own in excess of the maximum area allowed, there is also a taking under the
power of eminent domain. The taking contemplated is not a mere limitation of the use of the land. What
is required is the surrender of the title to and physical possession of the said excess and all beneficial
rights accruing to the owner in favor of the farmer beneficiary 51 The Bill Of Rights provides that" [n]o
person shall be deprived of life, liberty or property without due process of law." 52 The CARL was not
intended to take away property without due process of law. 53 The exercise of the power of eminent
domain requires that due process be observed in the taking of private property.

DAR A.O. No. 12, Series of 1989, from whence the Notice of Coverage first sprung, was amended in 1990
by DAR A.O. No. 9, Series of 1990 and in 1993 by DAR A.O. No. 1, Series of 1993. The Notice of Coverage
and letter of invitation to the conference meeting were expanded and amplified in said amendments.

DAR A.O. No. 9, Series of 1990 entitled "Revised Rules Governing the Acquisition of Agricultural Lands
Subject of Voluntary Offer to Sell and Compulsory Acquisition Pursuant to R.A. 6657," requires
that:jgc:chanrobles.com.ph

"B. MARO

1. Receives the duly accomplished CARP Form Nos. 1 & 1.1 including supporting documents.

2. Gathers basic ownership documents listed under 1.a or 1.b above and prepares corresponding
VOCF/CACF by landowner/landholding.

3. Notifies/invites the landowner and representatives of the LBP, DENR, BARC and prospective
beneficiaries of the schedule of ocular inspection of the property at least one week in advance.
4. MARO/LAND BANK FIELD OFFICE/BARC

a) Identify the land and landowner, and determine the suitability for agriculture and productivity of the
land and jointly prepare Field Investigation Report (CARP Form No. 2), including the Land Use Map of the
property.

b) Interview applicants and assist them in the preparation of the Application For Potential CARP
Beneficiary (CARP Form No. 3).

c) Screen prospective farmer-beneficiaries and for those found qualified, cause the signing of the
respective Application to Purchase and Farmer’s Undertaking (CARP Form No. 4).

d) Complete the Field Investigation Report based on the result of the ocular inspection/investigation of
the property and documents submitted. See to it that Field Investigation Report is duly accomplished
and signed by all concerned.

4. MARO

a) Assists the DENR Survey Party in the conduct of a boundary/subdivision survey delineating areas
covered by OLT, retention, subject of VOS, CA (by phases, if possible), infrastructures etc., whichever is
applicable.

b) Sends Notice of Coverage (CARP Form No. 5) to landowner concerned or his duly authorized
representative inviting him for a conference.

c) Sends Invitation Letter (CARP Form No. 6) for a conference/public hearing to prospective farmer-
beneficiaries, landowner, representatives of BARC, LBP, DENR, DA, NGO’s, farmers’ organizations and
other interested parties to discuss the following matters:chanrob1es virtual 1aw library

Result of Field Investigation

Inputs to valuation

Issues raised

Comments/recommendations by all parties concerned.

d) Prepares Summary of Minutes of the conference/public hearing to be guided by CARP Form No. 7.

e) Forwards the completed VOCF/CACF to the Provincial Agrarian Reform Office (PARO) using CARP
Form No. 8 (Transmittal Memo to PARO).

x x x."cralaw virtua1aw library

DAR A.O. No. 9, Series of 1990 lays down the rules on both Voluntary Offer to Sell (VOS) and Compulsory
Acquisition (CA) transactions involving lands enumerated under Section 7 of the CARL. 54 In both VOS
and CA transactions, the MARO prepares the Voluntary Offer to Sell Case Folder (VOCF) and the
Compulsory Acquisition Case Folder (CACF), as the case may be, over a particular landholding. The
MARO notifies the landowner as well as representatives of the LBP, BARC and prospective beneficiaries
of the date of the ocular inspection of the property at least one week before the scheduled date and
invites them to attend the same. The MARO, LBP or BARC conducts the ocular inspection and
investigation by identifying the land and landowner, determining the suitability of the land for
agriculture and productivity, interviewing and screening prospective farmer beneficiaries. Based on its
investigation, the MARO, LBP or BARC prepares the Field Investigation Report which shall be signed by
all parties concerned. In addition to the field investigation, a boundary or subdivision survey of the land
may also be conducted by a Survey Party of the Department of Environment and Natural Resources
(DENR) to be assisted by the MARO. 55 This survey shall delineate the areas covered by Operation Land
Transfer (OLT), areas retained by the landowner, areas with infrastructure, and the areas subject to VOS
and CA. After the survey and field investigation, the MARO sends a "Notice of Coverage" to the
landowner or his duly authorized representative inviting him to a conference or public hearing with the
farmer beneficiaries, representatives of the BARC, LBP, DENR, Department of Agriculture (DA), non-
government organizations, farmer’s organizations and other interested parties. At the public hearing,
the parties shall discuss the results of the field investigation, issues that may be raised in relation
thereto, inputs to the valuation of the subject landholding, and other comments and recommendations
by all parties concerned. The Minutes of the conference/public hearing shall form part of the VOCF or
CACF which files shall be forwarded by the MARO to the PARO. The PARO reviews, evaluates and
validates the Field Investigation Report and other documents in the VOCF/CACF. He then forwards the
records to the RARO for another review.

DAR A.O. No. 9, Series of 1990 was amended by DAR A.O. No. 1, Series of 1993. DAR A.O. No. 1, Series of
1993 provided, among others, that:jgc:chanrobles.com.ph

"IV. OPERATING PROCEDURES:jgc:chanrobles.com.ph

"Steps Responsible Activity Forms/

Agency/Unit Document

(Requirements)

A. Identification and

Documentation

x x x

5 DARMO Issues Notice of Coverage CARP to LO by personal Form No. delivery with proof of 2service, or
by registered mail with return card, informing him that his property is now under CARP coverage and for
LO to select his retention area, if he desires to avail of his right of retention; and at the same time invites
him to join the field investigation to be conducted on his property which should be scheduled at least
two weeks in advance of said notice.
A copy of said Notice CAR shall be posted for at least Form No.one week on the bulletin 17 board of the
municipal and barangay halls where the property is located. LGU office concerned notifies DAR about
compliance with posting requirement thru return indorsement on CARP Form No. 17.6 DARMO Sends
notice to the LBP, CARP BARC, DENR Form No. representatives and 3 prospective ARBs of th schedule of
the field investigation to be conducted on the subject property.

7 DARMO With the participation of CARP BARC the LO, representatives of Form No. LBP the LBP, BARC,
DENR 4 DENR and prospective ARBs, Land Use Local Office conducts the investigation Map on subject
property to identify the landholding, determines its suitability and productivity; and jointly prepares the
Field Investigation Report (FIR) and Land Use Map. However, the field investigation shall proceed even if
the LO, the representatives of the DENR and prospective ARBs are not available provided, they were
given due notice of the time and date of the investigation to be conducted. Similarly, if the LBP
representative is not available or could not come on the scheduled date, the field investigation shall also
be conducted, after which the duly accomplished Part I of CARP Form No. 4 shall be forwarded to the
LBP representative for validation. If he agrees to the ocular inspection report of DAR, he signs the FIR
(Part I) and accomplishes Part II thereof. In the event that there is difference or variance between the
findings of the DAR and the LBP as to the propriety of covering the land under CARP, whether in whole
or in part, on the issue of suitability to agriculture degree of development or slope, and on issues
affecting idle lands, the conflict shall be resolved

by a composite team of

DAR, LBP, DENR and

DA which shall jointly

conduct further

investigation thereon. The

team shall submit its

report of findings which

shall be binding to both

DAR and LBP, pursuant

to Joint Memorandum

Circular of the DAR,

LBP, DENR and DA

dated 27 January 1992.

8 DARMO Screens prospective ARBs CARP

BARC and causes the signing of Form No.

the Application of 5

Purchase and Farmers’

Undertaking (APFU).

9 DARMO Furnishes a copy of the CARP

duly accomplished FIR to Form No.

the landowner by personal 4

delivery with proof of

service or registered mail

with return card and posts

a copy thereof for at least

one week on the bulletin

board of the municipal

and barangay halls where

the property is located.chanrobles.com.ph : virtual law library

LGU Office concerned CARP

notifies DAR about Form No.

compliance with posting 17

requirement thru return

endorsement on CARP

Form No. 17.

B. Land Survey

10 DARMO Conducts perimeter or Perimeter

And/or segregation survey or

DENR delineating areas covered Segregation

Local Office by OLT, "uncarpable Survey Plan

areas such as 18% slope

and above, unproductive/

unsuitable to agriculture,

retention, infrastructure.
In case of segregation or

subdivision survey, the

plan shall be approved by

DENR-LMS.

C. Review and

Completion of

Documents

11 DARMO Forwards VOCF/CACF CARP

to DARPO. Form No.

x x x."cralaw virtua1aw library

DAR A.O. No. 1, Series of 1993, modified the identification process and increased the number of
government agencies involved in the identification and delineation of the land subject to acquisition. 56
This time, the Notice of Coverage is sent to the landowner before the conduct of the field investigation
and the sending must comply with specific requirements. Representatives of the DAR Municipal Office
(DARMO) must send the Notice of Coverage to the landowner by "personal delivery with proof of
service, or by registered mail with return card," informing him that his property is under CARP coverage
and that if he desires to avail of his right of retention, he may choose which area he shall retain. The
Notice of Coverage shall also invite the landowner to attend the field investigation to be scheduled at
least two weeks from notice. The field investigation is for the purpose of identifying the landholding and
determining its suitability for agriculture and its productivity. A copy of the Notice of Coverage shall be
posted for at least one week on the bulletin board of the municipal and barangay halls where the
property is located. The date of the field investigation shall also be sent by the DAR Municipal Office to
representatives of the LBP, BARC, DENR and prospective farmer beneficiaries. The field investigation
shall be conducted on the date set with the participation of the landowner and the various
representatives. If the landowner and other representatives are absent, the field investigation shall
proceed, provided they were duly notified thereof. Should there be a variance between the findings of
the DAR and the LBP as to whether the land be placed under agrarian reform, the land’s suitability to
agriculture, the degree or development of the slope, etc., the conflict shall be resolved by a composite
team of the DAR, LBP, DENR and DA which shall jointly conduct further investigation. The team’s
findings shall be binding on both DAR and LBP. After the field investigation, the DAR Municipal Office
shall prepare the Field Investigation Report and Land Use Map, a copy of which shall be furnished the
landowner "by personal delivery with proof of service or registered mail with return card." Another copy
of the Report and Map shall likewise be posted for at least one week in the municipal or barangay halls
where the property is located.

Clearly then, the notice requirements under the CARL are not confined to the Notice of Acquisition set
forth in Section 16 of the law. They also include the Notice of Coverage first laid down in DAR A.O. No.
12, Series of 1989 and subsequently amended in DAR A.O. No. 9, Series of 1990 and DAR A.O. No. 1,
Series of 1993. This Notice of Coverage does not merely notify the landowner that his property shall be
placed under CARP and that he is entitled to exercise his retention right; it also notifies him, pursuant to
DAR A.O. No. 9, Series of 1990, that a public hearing shall be conducted where he and representatives of
the concerned sectors of society may attend to discuss the results of the field investigation, the land
valuation and other pertinent matters. Under DAR A.O. No. 1, Series of 1993, the Notice of Coverage
also informs the landowner that a field investigation of his landholding shall be conducted where he and
the other representatives may be present.

B. The Compulsory Acquisition of Haciendas Palico and Banilad

In the case at bar, respondent DAR claims that it, through MARO Leopoldo C. Lejano, sent a letter of
invitation entitled "Invitation to Parties" dated September 29, 1989 to petitioner corporation, through
Jaime Pimentel, the administrator of Hacienda Palico. 57 The invitation was received on the same day it
was sent as indicated by a signature and the date received at the bottom left corner of said invitation.
With regard to Hacienda Banilad, respondent DAR claims that Jaime Pimentel, administrator also of
Hacienda Banilad, was notified and sent an invitation to the conference. Pimentel actually attended the
conference on September 21, 1989 and signed the Minutes of the meeting on behalf of petitioner
corporation. 58 The Minutes was also signed by the representatives of the BARC, the LBP and farmer
beneficiaries. 59 No letter of invitation was sent or conference meeting held with respect to Hacienda
Caylaway because it was subject to a Voluntary Offer to Sell to respondent DAR. 60

When respondent DAR, through the Municipal Agrarian Reform Officer (MARO), sent to the various
parties the Notice of Coverage and invitation to the conference, DAR A.O. No. 12, Series of 1989 was
already in effect more than a month earlier. The Operating Procedure in DAR Administrative Order No.
12 does not specify how notices or letters of invitation shall be sent to the landowner, the
representatives of the BARC, the LBP, the farmer beneficiaries and other interested parties. The
procedure in the sending of these notices is important to comply with the requisites of due process
especially when the owner, as in this case, is a juridical entity. Petitioner is a domestic corporation, 61
and therefore has a personality separate and distinct from its shareholders, officers and employees.

The Notice of Acquisition in Section 16 of the CARL is required to be sent to the landowner by "personal
delivery or registered mail." Whether the landowner be a natural or juridical person to whose address
the Notice may be sent by personal delivery or registered mail, the law does not distinguish. The DAR
Administrative Orders also do not distinguish. In the proceedings before the DAR the distinction
between natural and juridical persons in the sending of notices may be found in the Revised Rules of
Procedure of the DAR Adjudication Board (DARAB). Service of pleadings before the DARAB is governed
by Section 6, Rule V of the DARAB Revised Rules of Procedure. Notices and pleadings are served on
private domestic corporations or partnerships in the following manner:jgc:chanrobles.com.ph

"SECTION 6. Service upon Private Domestic Corporation or Partnership. — If the defendant is a

corporation organized under the laws of the Philippines or a partnership duly registered, service may be
made on the president, manager, secretary, cashier, agent, or any of its directors or partners."cralaw
virtua1aw library

Similarly, the Revised Rules of Court of the Philippines, in Section 13, Rule 14
provides:jgc:chanrobles.com.ph

"SECTION 13. Service upon private domestic corporation or partnership. — If the defendant is a
corporation organized under the laws of the Philippines or a partnership duly registered, service may be
made on the president, manager, secretary, cashier, agent, or any of its directors."cralaw virtua1aw
library

Summonses, pleadings and notices in cases against a private domestic corporation before the DARAB
and the regular courts are served on the president, manager, secretary, cashier, agent or any of its
directors. These persons are those through whom the private domestic corporation or partnership is
capable of action. 62

Jaime Pimentel is not the president, manager, secretary, cashier or director of petitioner corporation. Is
he, as administrator of the two Haciendas, considered an agent of the corporation?

The purpose of all rules for service of process on a corporation is to make it reasonably certain that the
corporation will receive prompt and proper notice in an action against it. 63 Service must be made on a
representative so integrated with the corporation as to make it a priori supposable that he will realize
his responsibilities and know what he should do with any legal papers served on him, 64 and bring home
to the corporation notice of the filing of the action. 65 Petitioner’s evidence does not show the official
duties of Jaime Pimentel as administrator of petitioner’s haciendas. The evidence does not indicate
whether Pimentel’s duties is so integrated with the corporation that he would immediately realize his
responsibilities and know what he should do with any legal papers served on him. At the time the
notices were sent and the preliminary conference conducted, petitioner’s principal place of business
was listed in respondent DAR’s records as "Soriano Bldg., Plaza Cervantes, Manila," 66 and "7th Flr.
Cacho-Gonzales Bldg., 101 Aguirre St., Makati, Metro Manila." 67 Pimentel did not hold office at the
principal place of business of petitioner. Neither did he exercise his functions in Plaza Cervantes, Manila
nor in Cacho-Gonzales Bldg., Makati, Metro Manila. He performed his official functions and actually
resided in the haciendas in Nasugbu, Batangas, a place over two hundred kilometers away from Metro
Manila.chanrobles virtual lawlibrary

Curiously, respondent DAR had information of the address of petitioner’s principal place of business.
The Notices of Acquisition over Haciendas Palico and Banilad were addressed to petitioner at its offices
in Manila and Makati. These Notices were sent barely three to four months after Pimentel was notified
of the preliminary conference. 68 Why respondent DAR chose to notify Pimentel instead of the officers
of the corporation was not explained by the said Respondent.

Nevertheless, assuming that Pimentel was an agent of petitioner corporation, and the notices and
letters of invitation were validly served on petitioner through him, there is no showing that Pimentel
himself was duly authorized to attend the conference meeting with the MARO, BARC and LBP
representatives and farmer beneficiaries for purposes of compulsory acquisition of petitioner’s
landholdings. Even respondent DAR’s evidence does not indicate this authority. On the contrary,
petitioner claims that it had no knowledge of the letter-invitation, hence, could not have given Pimentel
the authority to bind it to whatever matters were discussed or agreed upon by the parties at the
preliminary conference or public hearing. Notably, one year after Pimentel was informed of the
preliminary conference, DAR A.O. No. 9, Series of 1990 was issued and this required that the Notice of
Coverage must be sent "to the landowner concerned or his duly authorized representative." 69

Assuming further that petitioner was duly notified of the CARP coverage of its haciendas, the areas
found actually subject to CARP were not properly identified before they were taken over by respondent
DAR. Respondents insist that the lands were identified because they are all registered property and the
technical description in their respective titles specifies their metes and bounds. Respondents admit at
the same time, however, that not all areas in the haciendas were placed under the comprehensive
agrarian reform invariably by reason of elevation or character or use of the land. 70

The acquisition of the landholdings did not cover the entire expanse of the two haciendas, but only
portions thereof. Hacienda Palico has an area of 1,024 hectares and only 688.7576 hectares were
targetted for acquisition. Hacienda Banilad has an area of 1,050 hectares but only 964.0688 hectares
were subject to CARP. The haciendas are not entirely agricultural lands. In fact, the various tax
declarations over the haciendas describe the landholdings as "sugarland," and "forest, sugarland,
pasture land, horticulture and woodland." 71

Under Section 16 of the CARL, the sending of the Notice of Acquisition specifically requires that the land
subject to land reform be first identified. The two haciendas in the instant case cover vast tracts of land.
Before Notices of Acquisition were sent to petitioner, however, the exact areas of the landholdings were
not properly segregated and delineated. Upon receipt of this notice, therefore, petitioner corporation
had no idea which proportions of its estate were subject to compulsory acquisition, which portions it
could rightfully retain, whether these retained portions were compact or contiguous, and which portions
were excluded from CARP coverage. Even respondent DAR’s evidence does not show that petitioner,
through its duly authorized representative, was notified of any ocular inspection and investigation that
was to be conducted by respondent DAR. Neither is there proof that petitioner was given the
opportunity to at least choose and identify its retention areas in those portions to be acquired
compulsorily. The right of retention and how this right is exercised, is guaranteed in Section 6 of the
CARL, viz:chanrob1es virtual 1aw library
SECTION 6. Retention Limits. — . . .

The right to choose the area to be retained, which shall be compact or contiguous, shall pertain to the
landowner; Provided, however, That in case the area selected for retention by the landowner is
tenanted, the tenant shall have the option to choose whether to remain therein or be a beneficiary in
the same or another agricultural land with similar or comparable features. In case the tenant chooses to
remain in the retained area, he shall be considered a leaseholder and shall lose his right to be a
beneficiary under this Act. In case the tenant chooses to be a beneficiary in another agricultural land, he
loses his right as a leaseholder to the land retained by the landowner. The tenant must exercise this
option within a period of one (1) year from the time the landowner manifests his choice of the area for
retention.

Under the law, a landowner may retain not more than five hectares out of the total area of his
agricultural land subject to CARP. The right to choose the area to be retained, which shall be compact or
contiguous, pertains to the landowner. If the area chosen for retention is tenanted, the tenant shall
have the option to choose whether to remain on the portion or be a beneficiary in the same or another
agricultural land with similar or comparable features.

C. The Voluntary Acquisition of Hacienda Caylaway

Petitioner was also left in the dark with respect to Hacienda Caylaway, which was the subject of a
Voluntary Offer to Sell (VOS). The VOS in the instant case was made on May 6, 1988, 72 before the
effectivity of R.A. 6657 on June 15, 1988. VOS transactions were first governed by DAR Administrative
Order No. 19, series of 1989, 73 and under this order, all VOS filed before June 15, 1988 shall be heard
and processed in accordance with the procedure provided for in Executive Order No. 229,
thus:jgc:chanrobles.com.ph

"III. All VOS transactions which are now pending before the DAR and for which no payment has been
made shall be subject to the notice and hearing requirements provided in Administrative Order No. 12,
Series of 1989, dated 26 July 1989, Section II, Subsection A, paragraph 3.

All VOS filed before 15 June 1988, the date of effectivity of the CARL, shall be heard and processed in
accordance with the procedure provided for in Executive Order No. 229.
"x x x."cralaw virtua1aw library

Section 9 of E.O. 229 provides:jgc:chanrobles.com.ph

"SECTION 9. Voluntary Offer to Sell. — The government shall purchase all agricultural lands it deems
productive and suitable to farmer cultivation voluntarily offered for sale to it at a valuation determined
in accordance with Section 6. Such transaction shall be exempt from the payment of capital gains tax
and other taxes and fees."cralaw virtua1aw library

Executive Order 229 does not contain the procedure for the identification of private land as set forth in
DAR A.O. No. 12, Series of 1989. Section 5 of E.O. 229 merely reiterates the procedure of acquisition in
Section 16 R.A. 6657. In other words, the E.O. is silent as to the procedure for the identification of the
land, the notice of coverage and the preliminary conference with the landowner, representatives of the
BARC, the LBP and farmer beneficiaries. Does this mean that these requirements may be dispensed with
regard to VOS filed before June 15, 1988? The answer is no.

First of all, the same E.O. 229, like Section 16 of the CARL, requires that the land, landowner and
beneficiaries of the land subject to agrarian reform be identified before the notice of acquisition should
be issued. 74 Hacienda Caylaway was voluntarily offered for sale in 1989. The Hacienda has a total area
of 867.4571 hectares and is covered by four (4) titles. In two separate Resolutions both dated January
12, 1989, respondent DAR, through the Regional Director, formally accepted the VOS over two of these
four titles. 75 The land covered by the two titles has an area of 855.5257 hectares, but only 648.8544
hectares thereof fell within the coverage of R.A. 6657. 76 Petitioner claims it does not know where these
portions are located.

Respondent DAR, on the other hand, avers that surveys on the land covered by the four titles were
conducted in 1989, and that petitioner, as landowner, was not denied participation therein. The results
of the survey and the land valuation summary report, however, do not indicate whether notices to
attend the same were actually sent to and received by petitioner or its duly authorized representative.
77 To reiterate, Executive Order No. 229 does not lay down the operating procedure, much less the
notice requirements, before the VOS is accepted by respondent DAR. Notice to the landowner, however,
cannot be dispensed with. It is part of administrative due process and is an essential requisite to enable
the landowner himself to exercise, at the very least, his right of retention guaranteed under the CARL.
III. The Conversion of the three Haciendas

It is petitioner’s claim that the three haciendas are not subject to agrarian reform because they have
been declared for tourism, not agricultural purposes. 78 In 1975, then President Marcos issued
Proclamation No. 1520 declaring the municipality of Nasugbu, Batangas a tourist zone. Lands in Nasugbu
including the subject haciendas, were allegedly reclassified as non-agricultural 13 years before the
effectivity of R.A. No. 6657. 79 In 1993, the Regional Director for Region IV of the Department of
Agriculture certified that the haciendas are not feasible and sound for agricultural development. 80 On
March 20, 1992, pursuant to Proclamation No. 1520, the Sangguniang Bayan of Nasugbu, Batangas
adopted Resolution No. 19 reclassifying certain areas of Nasugbu as non-agricultural. 81 This Resolution
approved Municipal Ordinance No. 19, Series of 1992, the Revised Zoning Ordinance of Nasugbu 82
which zoning ordinance was based on a Land Use Plan for Planning Areas for New Development
allegedly prepared by the University of the Philippines. 83 Resolution No. 19 of the Sangguniang Bayan
was approved by the Sangguniang Panlalawigan of Batangas on March 8, 1993. 84

Petitioner claims that Proclamation No. 1520 was also upheld by respondent DAR in 1991 when it
approved conversion of 1,827 hectares in Nasugbu into a tourist area known as the Batulao Resort
Complex, and 13.52 hectares in Barangay Caylaway as within the potential tourist belt. 85 Petitioner
presents evidence before us that these areas are adjacent to the haciendas subject of this petition,
hence, the haciendas should likewise be converted. Petitioner urges this Court to take cognizance of the
conversion proceedings and rule accordingly. 86

We do not agree. Respondent DAR’s failure to observe due process in the acquisition of petitioner’s
landholdings does not ipso facto give this Court the power to adjudicate over petitioner’s application for
conversion of its haciendas from agricultural to non-agricultural. The agency charged with the mandate
of approving or disapproving applications for conversion is the DAR.

At the time petitioner filed its application for conversion, the Rules of Procedure governing the
processing and approval of applications for land use conversion was the DAR A.O. No. 2, Series of 1990.
Under this A.O., the application for conversion is filed with the MARO where the property is located. The
MARO reviews the application and its supporting documents and conducts field investigation and ocular
inspection of the property. The findings of the MARO are subject to review and evaluation by the
Provincial Agrarian Reform Officer (PARO). The PARO may conduct further filed investigation and submit
a supplemental report together with his recommendation to the Regional Agrarian Reform Officer
(RARO) who shall review the same. For lands less than five hectares, the RARO shall approve or
disapprove applications for conversion. For lands exceeding five hectares, the RARO shall evaluate the
PARO Report and forward the records and his report to the Undersecretary for Legal Affairs.
Applications over areas exceeding fifty hectares are approved or disapproved by the Secretary of
Agrarian Reform.

The DAR’s mandate over applications for conversion was first laid down in Section 4 (j) and Sections 5 (l)
of Executive Order No, 129-A, Series of 1987 and reiterated in the CARL and Memorandum Circular No.
54, Series of 1993 of the Office of the President. The DAR’s jurisdiction over applications for conversion
is provided as follows:jgc:chanrobles.com.ph

"A. The Department of Agrarian Reform (DAR) is mandated to "approve or disapprove applications for
conversion, restructuring or readjustment of agricultural lands into non-agricultural uses," pursuant to
Section 4 (j) of Executive Order No. 129-A, Series of 1987.chanrobles virtualawlibrary
chanrobles.com:chanrobles.com.ph

"B. Section 5 (l) of E.O. 129-A, Series of 1987, vests in the DAR, exclusive authority to approve or
disapprove applications for conversion of agricultural lands for residential, commercial, industrial and
other land uses.

"C. Section 65 of R.A. No. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988,
likewise empowers the DAR to authorize under certain conditions, the conversion of agricultural lands.

"D. Section 4 of Memorandum Circular No. 54, Series of 1993 of the Office of the President provides that
"action on applications for land use ‘conversion on individual landholdings shall remain as the
responsibility of the DAR, which shall utilize as its primary reference, documents on the comprehensive
land use plans and accompanying ordinances passed upon and approved by the local government units
concerned, together with the National Land Use Policy, pursuant to R.A. No. 6657 and E.O. No. 129-A."
87

Applications for conversion were initially governed by DAR A.O. No. 1, Series of 1990 entitled "Revised
Rules and Regulations Governing Conversion of Private Agricultural Lands and Non-Agricultural Uses,"
and DAR A.O. No. 2, Series of 1990 entitled "Rules of Procedure Governing the Processing and Approval
of Applications for Land Use Conversion." These A.O.’s and other implementing guidelines, including
Presidential issuances and national policies related to land use conversion have been consolidated in
DAR A.O. No. 07, Series of 1997. Under this recent issuance, the guiding principle in land use conversion
is:jgc:chanrobles.com.ph

"to preserve prime agricultural lands for food production while, at the same time, recognizing the need
of the other sectors of society (housing, industry and commerce) for land, when coinciding with the
objectives of the Comprehensive Agrarian Reform Law to promote social justice, industrialization and
the optimum use of land as a national resource for public welfare." 88

"Land Use" refers to the manner of utilization of land, including its allocation, development and
management. "Land Use Conversion" refers to the act or process of changing the current use of a piece
of agricultural land into some other use as approved by the DAR. 89 The conversion of agricultural land
to uses other than agricultural requires field investigation and conferences with the occupants of the
land. They involve factual findings and highly technical matters within the special training and expertise
of the DAR. DAR A.O. No. 7, Series of 1997 lays down with specificity how the DAR must go about its
task. This time, the field investigation is not conducted by the MARO but by a special task force, known
as the Center for Land Use Policy Planning and Implementation (CLUPPI-DAR Central Office). The
procedure is that once an application for conversion is filed, the CLUPPI prepares the Notice of Posting.
The MARO only posts the notice and thereafter issues a certificate to the fact of posting. The CLUPPI
conducts the field investigation and dialogues with the applicants and the farmer beneficiaries to
ascertain the information necessary for the processing of the application. The Chairman of the CLUPPI
deliberates on the merits of the investigation report and recommends the appropriate action. This
recommendation is transmitted to the Regional Director, thru the Undersecretary, or Secretary of
Agrarian Reform. Applications involving more than fifty hectares are approved or disapproved by the
Secretary. The procedure does not end with the Secretary, however. The Order provides that the
decision of the Secretary may be appealed to the Office of the President or the Court of Appeals, as the
case may be, viz:jgc:chanrobles.com.ph

"Appeal from the decision of the Undersecretary shall be made to the Secretary, and from the Secretary
to the Office of the President or the Court of Appeals as the case may be. The mode of appeal motion for
reconsideration, and the appeal fee, from Undersecretary to the Office of the Secretary shall be the
same as that of the Regional Director to the Office of the Secretary." 90

Indeed, the doctrine of primary jurisdiction does not warrant a court to arrogate unto itself authority to
resolve a controversy the jurisdiction over which is initially lodged with an administrative body of special
competence. 91 Respondent DAR is in a better position to resolve petitioner’s application for
conversion, being primarily the agency possessing the necessary expertise on the matter. The power to
determine whether Haciendas Palico, Banilad and Caylaway are non-agricultural, hence, exempt from
the coverage of the CARL lies with the DAR, not with this Court.

Finally, we stress that the failure of respondent DAR to comply with the requisites of due process in the
acquisition proceedings does not give this Court the power to nullify the CLOA’s already issued to the
farmer beneficiaries. To assume the power is to short-circuit the administrative process, which has yet
to run its regular course. Respondent DAR must be given the chance to correct its procedural lapses in
the acquisition proceedings. In Hacienda Palico alone, CLOA’s were issued to 177 farmer beneficiaries in
1993. 92 Since then until the present, these farmers have been cultivating their lands. 93 It goes against
the basic precepts of justice, fairness and equity to deprive these people, through no fault of their own,
of the land they till. Anyhow, the farmer beneficiaries hold the property in trust for the rightful owner of
the land.

IN VIEW WHEREOF, the petition is granted in part and the acquisition proceedings over the three
haciendas are nullified for respondent DAR’s failure to observe due process therein. In accordance with
the guidelines set forth in this decision and the applicable administrative procedure, the case is hereby
remanded to respondent DAR for proper acquisition proceedings and determination of petitioner’s
application for conversion.

SO ORDERED.
 G.R. No. 180471 : March 26, 2010]

ALANGILAN REALTY & DEVELOPMENT CORPORATION, PETITIONER, VS.

OFFICE OF THE PRESIDENT, REPRESENTED BY ALBERTO ROMULO, AS
EXECUTIVE SECRETARY, AND ARTHUR P. AUTEA, AS DEPUTY SECRETARY; AND
DEPARTMENT OF AGRARIAN REFORM, RESPONDENTS.

DECISION

NACHURA, J.:

At bar is a petition for review on certiorari under Rule 45 of the Rules of Court filed by
Alangilan Realty & Development Corporation (petitioner), challenging the August 28,
2007 Decision[1] and the November 12, 2007 Resolution[2] of the Court of Appeals (CA)
in CA-G.R. SP No. 76525.

Petitioner is the owner/developer of a 17.4892-hectare land in Barangays Alangilan and

Patay in Batangas City (Alangilan landholding). On August 7, 1996, petitioner filed
an Application and/or Petition for Exclusion/Exemption from Comprehensive Agrarian
Reform Program (CARP) Coverage[3] of the Alangilan landholding with the Municipal
Agrarian Reform Office (MARO) of the Department of Agrarian Reform (DAR). It averred
that, in 1982, the Sangguniang Bayan of Batangas City classified the subject
landholding as reserved for residential under a zoning ordinance (1982 Ordinance),
which was approved by the Human Settlement Regulatory Commission. It further
alleged that, on May 17, 1994, the Sangguniang Panglungsod of Batangas City
approved the City Zoning Map and Batangas Comprehensive Zoning and Land Use
Ordinance (1994 Ordinance), reclassifying the landholding as residential-1. Petitioner
thus claimed exemption of its landholding from the coverage of the CARP. In support of
its application, petitioner submitted a certification[4] dated October 31, 1995 of Zoning
Administrator Delia O. Malaluan.

On May 6, 1997, then DAR Secretary Ernesto Garilao issued an Order[5] denying

petitioner's application for exemption. The DAR Secretary noted that, as of February 15,
1993, the Alangilan landholding remained agricultural,  reserved for residential. It was
classified as residential-1  only on December 12, 1994 under Sangguniang
Panlalawigan Resolution No. 709, series of 1994. Clearly, the subject landholding was
still agricultural  at the time of the effectivity of Republic Act No. 6657, or the
Comprehensive Agrarian Reform Law (CARL), on June 15, 1988. The qualifying
phrase reserved for residential means that the property is still classified
as agricultural, and is covered by the CARP.

The DAR Secretary disposed thus:

WHEREFORE, premises considered, the herein application for exemption involving

seventeen (17) parcels of land with an aggregate area of 23.9258 hectares located [in]
Calicanto, Alangilan and Patay, Batangas City is hereby GRANTED insofar as the 4.9123
hectares [of] Calicanto landholdings are concerned and DENIED with respect to the
17.4892 Alangilan properties, subject to the payment of disturbance compensation to
qualified tenants, if any there be.
SO ORDERED.[6]

Petitioner moved for reconsideration of the Order, arguing that the Alangilan
landholding was already reserved  for residential use as early as October 6, 1982.
Invoking this Court's ruling in Natalia Realty, Inc. v. Department of Agrarian Reform,
[7]
 petitioner insisted that the subject landholding was outside the coverage of the
CARP. Petitioner also submitted a Supplemental to Motion for Reconsideration,
[8]
 arguing that the landholding had already been reclassified as reserved for
residential and had been earmarked for residential use even before the effectivity of
the CARL. Accordingly, its non-development into a subdivision did not remove the
landholding's zoning classification as reserved for residential.

On July 8, 1997, petitioner submitted an Addendum to Supplemental to Motion for

Reconsideration,[9] attaching another certification stating that the Alangilan landholding
was zoned as reserved for residential in 1982, and became residential-1 in 1994. In
a 2nd  Addendum to Supplemental to Motion for Reconsideration,[10] petitioner submitted
another certification whereby the zoning administrator withdrew her first certification
and clarified that the phrase agricultural, reserved for residential  spoke of two
classifications, namely, agricultural (coded brown in the map) and reserved
for residential (coded brown with diagonal lines), stating further that the Alangilan
landholding was reserved for residential.

However, the DAR Secretary was not at all persuaded, and denied petitioner's motion
for reconsideration on December 21, 1998, viz.:

After a careful review and evaluation of the case, this Office finds no cogent reason to
reverse its Order, dated 6 May 1997.

Administrative Order No. 6, series of 1994 provides that "lands that are classified as
commercial, industrial or residential before 15 June 1988 no longer need any
conversion clearance"; as such, they are exempt from the coverage of R.A. [No.] 6657.

The phrase "Reserved for Residential" is not a zoning classification contemplated in the
aforestated A.O. as to exempt a particular land from the coverage of R.A. 6657. Moreso
in this case, because the phrase was attached to the word "Agricultural"; in fact, we can
say that it merely qualified the term "Agricultural." We believe that the correct
interpretation of the zoning should be that the land is agricultural, but it may be
classified and used for residential purposes in some future time, precisely, because it
has been reserved for residential use. This interpretation is supported by the fact that
the zoning of the land became Residential only in 1994, per Ordinance No. 3, series of
1994, which established a Comprehensive Zoning Regulation and Land Use for
Batangas City. To reiterate, the Sanggunian Members of Batangas City would have
expressly, unequivocably, and unqualifiedly zoned the area as "residential" if they had
intended it to be zoned as such in 1982. They never did until the issuance of Ordinance
No. 3 in 1994.

It is also important to note, that the legend used in the Zoning Map of Batangas City
approved by HSRC (now HLURB) per Resolution No. 92, dated 6 October 1982,
indicated a certain kind of arrangement which put in sequential order those that were
similarly zoned, but with different qualifications and/or characteristics. Thus,
"residential-1," "residential-2," and "residential-3" were placed on top of the list one
after the other, while "Agricultural, reserved for residential" and mining agricultural
were put at the bottom, but also enumerated one after the other. If the subject
properties were classified more of residential than agricultural, it should have been
placed in the legend right after "residential-3", and the color that should have been
used was not brown but a shade of white with diagonal lines to reflect its dominant
residential character.

Even the Applicant was aware that the classification of the area was agricultural. In his
letter to the MARO of Batangas City, dated 24 October 1995, the Applicant categorically
admitted that the Alangilan Landholding was classified as agricultural. The said letter
stated as follows:

At present, the subject properties are classified as agricultural. However, Barangay

Alangilan where these properties are located have been declared by an ordinance of the
Municipal Council of Batangas City as commercial, industrial and/or residential.

As to what ordinance the Applicant was referring to was not specified. However, it
seems obvious that he was referring to the 1994 Comprehensive Zoning Regulations
and Land Use for Batangas City (Ordinance No. 3, series of 1994). The previous zoning
ordinance, i.e. the Batangas City Zoning Ordinance approved under HSRC Resolution
No. R-92, series of 1982, dated 6 October 1982, classified the said landholding as
"Agricultural, Reserved for Residential." It was Ordinance No. 3, series of 1994 that
explicitly classified the area as "Residential-1."

This Office, therefore, is convinced that the zoning classification of the Alangilan
Landholding prior to 15 June 1988 was Agricultural, although with the qualification that
it had been reserved for residential use. The ocular inspection conducted in 1996 by the
representatives of the MARO, PARO and RARO confirmed that the Alangilan Landholding
was still used for agricultural purposes. The area was planted with mangoes and
coconuts.

We could not give credence to the 3rd Certification, dated 9 December 1997, of Zoning
Administrator Delia Malaluan-Licarte, because it does not conform to the Batangas City
Zoning Ordinance and Map approved under HSRC Resolution No. R-92, series of 1982,
dated 6 October 1982. In the first place, what is asked from Zoning Administrators is
merely to state the kind of classification/zoning where a certain area falls as provided in
the approved Zoning Ordinance. In the case at bar, the Zoning Administrator went
beyond her authority. In effect, she reclassified the area from "Agricultural, Reserved
for Residential" to "Reserved for Residential" by claiming that there were actually two
zones provided by the Sanggunian Members. It was actually a modification of the
zoning ordinance which, to us, is clearly unwarranted.

Moreover, even assuming the Zoning Administrator is correct, the classification

"Reserved for Residential" is not within the contemplation of A.O. No. 6, series of 1994.
The said A.O. talks about lands that were classified as residential before 15 June 1988.
Alangilan Landholding was merely reserved for Residential. It connotes something in
the future, which is, that the land may be classified as residential in some future time.
It was identified as an expansion area, nothing else. The fact remains that in 1982, the
landholding was still Agricultural, and this fact is not changed by the re-interpretation
made by Zoning Administrator Delia Malaluan-Licarte.[11]

On appeal, the Office of the President (OP) affirmed the decision of the DAR Secretary:

WHEREFORE, premises considered, the instant appeal is hereby DISMISSED and the
appealed Order dated 21 December 1998 of the Department of Agrarian Reform [is]
AFFIRMED in toto.

Parties are required to INFORM this Office, within five (5) days from notice, of the dates
of their receipt of this Decision.

SO ORDERED.[12]

A motion for reconsideration was filed, but the motion also suffered the same fate, as
the OP denied it on March 20, 2003.[13]

Petitioner went up to the CA via a petition for review on certiorari,  assailing the OP
decision. On August 28, 2007, the CA dismissed the petition. The CA noted the report
of MARO, Provincial Agrarian Reform Office (PARO), and Regional Agrarian Reform
Office (RARO) that the Alangilan landholding was devoted to agricultural activities prior
to the effectivity of the CARP on June 15, 1988 and even thereafter. Likewise, there
was no showing that it was classified as commercial, industrial, or residential in town
plans and zoning ordinances of the Housing and Land Use Regulatory Board.
Accordingly, the Alangilan property did not cease to be agricultural. The 1994
Ordinance classifying the property as residential-1 did not convert or reclassify the
Alangilan landholding as residential because there was no proof that a conversion
clearance from the DAR was obtained. Thus, despite its reclassification in 1994 by the
City Government of Batangas, the Alangilan landholding remained under CARP
coverage. Petitioner filed a motion for reconsideration, but the CA denied it on
November 12, 2007.

Hence, this appeal by petitioner, arguing that:

THE COURT OF APPEALS SERIOUSLY ERRED IN HOLDING THAT PETITIONER'S

ALANGILAN LANDHOLDING IS SUBJECT TO THE COVERAGE OF THE COMPREHENSIVE
AGRARIAN REFORM LAW, NOTWITHSTANDING THAT THE PROPERTY HAS BEEN
CONVERTED TO NON-AGRICULTURAL USES BY THE ZONING ORDINANCE OF THE CITY
OF BATANGAS PRIOR TO THE LAW.[14]

Petitioner insists on exemption of the Alangilan landholding from CARP coverage. It

argues that the subject landholding had already been converted into non-agricultural
use long before the advent of the CARP. The passage of the 1982 Ordinance, classifying
the property as reserved for residential, it asserts, effectively transformed the land into
non-agricultural use, and thus, outside the ambit of the CARL. It cites Natalia, wherein
it was ruled that lands intended for residential use are outside the coverage of the
CARL.

Indeed, lands devoted to non-agricultural activity are outside the coverage of CARL.
These include lands previously converted into non-agricultural uses prior to the
effectivity of the CARL on June 15, 1988. Unfortunately, petitioner failed to convince us
that the Alangilan landholding ceased to be agricultural at the time of the effectivity of
the CARL.

It is beyond cavil that the Alangilan landholding was classified as agricultural, reserved
for residential in 1982, and was reclassified as residential-1 in 1994. However, contrary
to petitioner's assertion, the term reserved for residential does not change the nature of
the land from agricultural to non-agricultural. As aptly explained by the DAR Secretary,

the term reserved for residential simply reflects the intended land use. It does not
denote that the property has already been reclassified as residential, because the
phrase reserved for residential is not a land classification category.

Indubitably, at the time of the effectivity of the CARL in 1988, the subject landholding
was still agricultural. This was bolstered by the fact that the Sangguniang
Panlalawigan had to pass an Ordinance in 1994, reclassifying the landholding
as residential-1. If, indeed, the landholding had already been earmarked for residential
use in 1982, as petitioner claims, then there would have been no necessity for the
passage of the 1994 Ordinance.

Petitioner cannot take refuge in our ruling in Natalia. The case is not on all fours with
the instant case. In Natalia, the entire property was converted into residential use in
1979 and was developed into a low-cost housing subdivision in 1982. Thus, the
property was no longer devoted to agricultural use at the time of the effectivity of the
CARL.

In this case, however, petitioner failed to establish that the subject landholding had
already been converted into residential use prior to June 15, 1988. We also note that
the subject landholding was still being utilized for agricultural activities at the time of
the filing of the application for exemption. The ocular inspection, jointly conducted by
the MARO, PARO and RARO, disclosed that the landholding was planted with mangoes
and coconuts.[15]

In Department of Agrarian Reform v. Oroville Development Corporation,[16] we held:

[i]n order to be exempt from CARP coverage, the subject property must have been
classified as industrial/residential before June 15, 1988. In this case, the DAR's
examination of the zoning ordinances and certifications pertaining to the subject
property, as well as its field investigation, disclosed that the same remains to be
agricultural. The Zoning Certifications to the effect that the land is within the city's
potential growth area for urban expansion are inconsequential as they do not reflect the
present classification of the land but merely its intended land use.

Not having been converted into, or classified as, residential before June 15, 1988, the
Alangilan landholding is, therefore, covered by the CARP. The subsequent
reclassification of the landholding as residential-1 in 1994 cannot place the property
outside the ambit of the CARP, because there is no showing that the DAR Secretary
approved the reclassification.

In a last-ditch effort to secure a favorable decision, petitioner assails the authority of

the DAR Secretary to determine the classification of lands. It asserts that the power to
classify lands is essentially a legislative function that exclusively lies with the legislative
authorities, and thus, when the Sangguniang Bayan of Batangas City declared the
Alangilan landholding as residential in its 1994 Ordinance, its determination was
conclusive and cannot be overruled by the DAR Secretary.

The argument is specious.

The exclusive jurisdiction to classify and identify landholdings for coverage under the
CARP is reposed in the DAR Secretary. The matter of CARP coverage, like the instant
case for application for exemption, is strictly part of the administrative implementation
of the CARP, a matter well within the competence of the DAR Secretary.[17] As we
explained in Leonardo Tarona, et al. v. Court of Appeals (Ninth Division), et al.:[18]

The power to determine whether a property is subject to CARP coverage lies with the
DAR Secretary pursuant to Section 50 of R.A. No. 6657. Verily, it is explicitly provided
under Section 1, Rule II of the DARAB Revised Rules that matters involving strictly the
administrative implementation of the CARP and other agrarian laws and regulations,
shall be the exclusive prerogative of and cognizable by the Secretary of the DAR.

Finally, it is well settled that factual findings of administrative agencies are generally
accorded respect and even finality by this Court, if such findings are supported by
substantial evidence. The factual findings of the DAR Secretary, 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.[19] In this case, petitioner utterly failed to show justifiable reason to
warrant the reversal of the decision of the DAR Secretary, as affirmed by the OP and
the CA.

WHEREFORE, the petition is DENIED. The assailed Decision and Resolution of the

Court of Appeals in CA-G.R. SP No. 76525 are AFFIRMED.

Costs against petitioner.

SO ORDERED.

[G.R. No. 169913, June 08 : 2011]

HEIRS OF DR. JOSE DELESTE, NAMELY: JOSEFA DELESTE, JOSE RAY DELESTE,
RAUL HECTOR DELESTE, AND RUBEN ALEX DELESTE, PETITIONERS, VS. LAND
BANK OF THE PHILIPPINES (LBP), AS REPRESENTED BY ITS MANAGER, LAND
VALUATION OFFICE OF LBP COTABATO CITY; THE REGIONAL DIRECTOR -
REGION 12 OF COTABATO CITY, THE SECRETARY OF THE DEPARTMENT OF
AGRARIAN REFORM; THE REGIONAL DIRECTOR OF REGION X - CAGAYAN DE
ORO CITY, REPRESENTED BY MCMILLAN LUCMAN, IN HIS CAPACITY AS
PROVINCIAL AGRARIAN REFORM OFFICER (PARO) OF DAR LANAO DEL NORTE;
LIZA BALBERONA, IN HER CAPACITY AS DAR MUNICIPAL AGRARIAN REFORM
OFFICER (MARO); REYNALDO BAGUIO, IN HIS CAPACITY AS THE REGISTER OF
DEEDS OF ILIGAN CITY AS NOMINAL PARTY; THE EMANCIPATION PATENT
HOLDERS: FELIPE D. MANREAL, CUSTUDIO M. RICO, HEIRS OF DOMINGO V.
RICO, HEIRS OF ABDON T. MANREAL, MACARIO M. VELORIA, ALICIA B.
MANREAL, PABLO RICO, SALVACION MANREAL, HEIRS OF TRANQUILIANA
MANREAL, HEIRS OF ANGELA VELORIA, HEIRS OF NECIFURO CABALUNA,
HEIRS OF CLEMENTE RICO, HEIRS OF MANTILLANO OBISO, HEIRS OF
HERCULANO BALORIO, AND TITO BALER, RESPONDENTS.

DECISION

VELASCO JR., J.:

The Case

Before Us is a Petition for Review on Certiorari under Rule 45 seeking to reverse and
set aside the October 28, 2004 Resolution[1] of the Court of Appeals (CA) and its
September 13, 2005 Resolution[2] denying petitioners' motion for reconsideration.

The Facts

The spouses Gregorio Nanaman (Gregorio) and Hilaria Tabuclin (Hilaria) were the
owners of a parcel of agricultural land located in Tambo, Iligan City, consisting of 34.7
hectares (subject property).  Said spouses were childless, but Gregorio had a son
named Virgilio Nanaman (Virgilio) by another woman. Virgilio had been raised by the
couple since he was two years old. Gregorio also had two daughters, Esperanza and
Caridad, by still another woman.[3]

When Gregorio died in 1945, Hilaria and Virgilio administered the subject property.
[4]
 On February 16, 1954, Hilaria and Virgilio sold the subject property to Dr. Jose
Deleste (Deleste) for PhP 16,000.[5] The deed of sale was notarized on February 17,
1954 and registered on March 2, 1954. Also, the tax declaration in the name of Virgilio
was canceled and a new tax declaration was issued in the name of Deleste. The arrears
in the payment of taxes from 1952 had been updated by Deleste and from then on, he
paid the taxes on the property.[6]

On May 15, 1954, Hilaria died.[7] Gregorio's brother, Juan Nanaman, was appointed as
special administrator of the estate of the deceased spouses. Subsequently, Edilberto
Noel (Noel) was appointed as the regular administrator of the joint estate.[8]

On April 30, 1963, Noel, as the administrator of the intestate estate of the deceased
spouses, filed before the Court of First Instance, Branch II, Lanao del Norte an action
against Deleste for the reversion of title over the subject property, docketed as Civil
Case No. 698.[9] Said case went up to this Court in Noel v. CA, where We rendered a
Decision[10] on January 11, 1995, affirming the ruling of the CA that the subject
property was the conjugal property of the late spouses Gregorio and Hilaria and that
the latter could only sell her one-half (1/2) share of the subject property to Deleste. As
a result, Deleste, who died in 1992, and the intestate estate of Gregorio were held to
be the co-owners of the subject property, each with a one-half (1/2) interest in it.[11]
Notably, while Civil Case No. 698 was still pending before the CFI, particularly on
October 21, 1972, Presidential Decree No. (PD) 27 was issued. This law mandates that
tenanted rice and corn lands be brought under the Operation Land Transfer (OLT)
Program and awarded to farmer-beneficiaries. Thus, the subject property was placed
under the said program.[12] However, only the heirs of Gregorio were identified by the
Department of Agrarian Reform (DAR) as the landowners.  Concomitantly, the notices
and processes relative to the coverage were sent to these heirs.[13]

In 1975, the City of Iligan passed City Ordinance No. 1313, known as the "Zoning
Regulation of Iligan City," reclassifying the subject property as commercial/residential.
[14]

Eventually, on February 12, 1984, DAR issued Certificates of Land Transfer (CLTs) in
favor of private respondents who were tenants and actual cultivators of the subject
property.[15] The CLTs were registered on July 15, 1986.[16]

In 1991, the subject property was surveyed.[17] The survey of a portion of the land
consisting of 20.2611 hectares, designated as Lot No. 1407, was approved on January
8, 1999.[18] The claim folder for Lot No. 1407 was submitted to the LBP which issued a
Memorandum of Valuation and a Certificate of Cash Deposit on May 21, 2001 and
September 12, 2001, respectively. Thereafter, Emancipation Patents (EPs) and Original
Certificates of Title (OCTs) were issued on August 1, 2001 and October 1, 2001,
respectively, in favor of private respondents over their respective portions of Lot No.
1407.[19]

Meanwhile, on November 22, 1999, the City of Iligan filed a complaint with the Regional
Trial Court (RTC), Branch 4 in Iligan City for the expropriation of a 5.4686-hectare
portion of Lot No. 1407, docketed as Special Civil Action No. 4979. On December 11,
2000, the RTC issued a Decision granting the expropriation. Considering that the real
owner of the expropriated portion could not be determined, as the subject property had
not yet been partitioned and distributed to any of the heirs of Gregorio and Deleste, the
just compensation for the expropriated portion of the subject property in the amount of
PhP 27,343,000 was deposited with the Development Bank of the Philippines in Iligan
City, in trust for the RTC in Iligan City.[20]

On February 28, 2002, the heirs of Deleste, petitioners herein, filed with the
Department of Agrarian Reform Adjudication Board (DARAB) a petition seeking to
nullify private respondents' EPs.[21] This was docketed as Reg. Case No. X-471-LN-2002.

On July 21, 2003, the Provincial Agrarian Reform Adjudicator (PARAD) rendered a
Decision[22] declaring that the EPs were null and void in view of the pending issues of
ownership, the subsequent reclassification of the subject property into a
residential/commercial land, and the violation of petitioners' constitutional right to due
process of law.

Dissatisfied, private respondents immediately filed their Notice of Appeal on July 22,
2003. Notwithstanding it, on July 24, 2003, petitioners filed a Motion for a Writ of
Execution pursuant to Section 2, Rule XII of the Revised Rules of Procedure, which was
granted in an Order dated August 4, 2003 despite strong opposition from private
respondents.[23] On January 28, 2004, the DARAB nullified the Order dated August 4,
2003 granting the writ of execution.[24]

Subsequently, the DARAB, in DARAB Case No. 12486, reversed the ruling of the PARAD
in its Decision[25] dated March 15, 2004. It held, among others, that the EPs were valid
as it was the heirs of Deleste who should have informed the DAR of the pendency of
Civil Case No. 698 at the time the subject property was placed under the coverage of
the OLT Program considering that DAR was not a party to the said case. Further, it
stated that the record is bereft of any evidence that the city ordinance has been
approved by the Housing and Land Use Regulatory Board (HLURB), as mandated by
DAR Administrative Order No. 01, Series of 1990, and held that whether the subject
property is indeed exempt from the OLT Program is an administrative determination,
the jurisdiction of which lies exclusively with the DAR Secretary or the latter's
authorized representative. Petitioners' motion for reconsideration was likewise denied
by the DARAB in its Resolution[26] dated July 8, 2004.

Undaunted, petitioners filed a petition for review with the CA, docketed as CA-G.R. SP
No. 85471, challenging the Decision and Resolution in DARAB Case No. 12486. This was
denied by the CA in a Resolution dated October 28, 2004 for petitioners' failure to
attach the writ of execution, the order nullifying the writ of execution, and such
material portions of the record referred to in the petition and other supporting papers,
as required under Sec. 6 of Rule 43 of the Rules of Court. Petitioners' motion for
reconsideration was also denied by the appellate court in a Resolution dated September
13, 2005 for being pro forma.

On November 18, 2005, petitioners filed a petition for review with this Court. In Our
Resolution[27] dated February 4, 2008, We resolved to deny the said petition for failure
to show sufficiently any reversible error in the assailed judgment to warrant the
exercise by the Court of its discretionary appellate jurisdiction in this case.

On March 19, 2008, petitioners filed a Motion for Reconsideration.[28] On April 11, 2008,
they also filed a Supplement to the Motion for Reconsideration.[29]

In Our Resolution[30] dated August 20, 2008, this Court resolved to grant petitioners'
motion for reconsideration and give due course to the petition, requiring the parties to
submit their respective memoranda.

The Issues

I. [WHETHER THE CA WAS CORRECT IN DISMISSING] OUTRIGHT THE

PETITION FOR REVIEW OF PETITIONERS X X X.

II. [WHETHER] THE OUTRIGHT DENIAL OF PETITIONERS' MOTION FOR

RECONSIDERATION BASED ON A MISAPPRECIATION OF FACTS IS
JUSTIFIED; AND [WHETHER THE] OUTRIGHT DISMISSAL OF THE
PETITION IS JUST CONSIDERING THE IMPORTANCE OF THE ISSUES
RAISED THEREIN.

XXXX
 III. [WHETHER PETITIONERS' LAND IS] COVERED BY AGRARIAN REFORM
GIVEN THAT THE CITY OF ILIGAN PASSED [CITY] ORDINANCE NO. 1313
RECLASSIFYING THE AREA INTO A STRICTLY RESIDENTIAL AREA IN
1975.

IV. [WHETHER THE LAND] THAT HAS BEEN PREVIOUSLY AND PARTIALLY
EXPROPRIATED BY A CITY GOVERNMENT [MAY] STILL BE SUBJECT[ED]
TO AGRARIAN REFORM.

V. [WHETHER DAR VIOLATED] THE RIGHTS OF PETITIONERS TO

PROCEDURAL DUE PROCESS.

VI. [WHETHER] THE COMPENSATION DETERMINED BY DAR AND LBP IS

CORRECT GIVEN THAT THE FORMULA USED HAD BEEN REPEALED.

VII. [WHETHER] THE ISSUANCE OF EMANCIPATION PATENTS [IS] LEGAL

GIVEN THAT THEY WERE FRUITS OF AN ILLEGAL PROCEEDING.

VIII. [WHETHER] THE CERTIFICATES OF TITLE [ARE] VALID GIVEN THAT THEY
WERE DIRECTLY ISSUED TO THE FARMER-BENEFICIARIES IN GROSS
VIOLATION OF SECTION 16(E) OF R.A. 6657 X X X.[31]

Our Ruling

The petition is meritorious.

Effect of non-compliance with the requirements

under Sec. 6, Rule 43 of the Rules of Court

In filing a petition for review as an appeal from awards, judgments, final orders, or

resolutions of any quasi-judicial agency in the exercise of its quasi-judicial
functions, it is required under Sec. 6(c), Rule 43 of the Rules of Court that it be
accompanied by a clearly legible duplicate original or a certified true copy of the award,
judgment, final order, or resolution appealed from, with certified true copies of such
material portions of the record referred to in the petition and other supporting papers.
As stated:

Sec. 6. Contents of the petition. - The petition for review shall (a) state the full names
of the parties to the case, without impleading the court or agencies either as petitioners
or respondents; (b) contain a concise statement of the facts and issues involved and
the grounds relied upon for the review; (c) be accompanied by a clearly legible
duplicate original or a certified true copy of the award, judgment, final order
or resolution appealed from, together with certified true copies of such
material portions of the record referred to therein and other supporting
papers; and (d) contain a sworn certification against forum shopping as provided in the
last paragraph of section 2, Rule 42. The petition shall state the specific material dates
showing that it was filed within the period fixed herein. (Emphasis supplied.)
Non-compliance with any of the above-mentioned requirements concerning the
contents of the petition, as well as the documents that should accompany the petition,
shall be sufficient ground for its dismissal as stated in Sec. 7, Rule 43 of the Rules:

Sec. 7. Effect of failure to comply with requirements. - The failure of the petitioner to
comply with any of the foregoing requirements regarding the payment of the docket
and other lawful fees, the deposit for costs, proof of service of the petition, and the
contents of and the documents which should accompany the petition shall
be sufficient ground for the dismissal thereof. (Emphasis supplied.)

In the instant case, the CA dismissed the petition in CA-G.R. SP No. 85471 for
petitioners' failure to attach the writ of execution, the order nullifying the writ of
execution, and such material portions of the record referred to in the petition and other
supporting papers.[32]

A perusal of the issues raised before the CA would, however, show that the foregoing
documents required by the appellate court are not necessary for the proper disposition
of the case. Specifically:

Is [Lot No. 1407] within the ambit of the [Comprehensive Agrarian Reform Program]?

Can the OLT by DAR over the subject land validly proceed without notice to the
landowner?

Can the OLT be validly completed without a certification of deposit by Land Bank?

[I]s the landowner barred from exercising his right of retention x x x [considering that
EPs were already issued on the basis of CLTs]?

Are the EPs over the subject land x x x valid x x x?[33]

Petitioners complied with the requirement under Sec. 6(c), Rule 43 of the Rules of
Court when they appended to the petition filed before the CA certified true copies of the
following documents: (1) the challenged resolution dated July 8, 2004 issued by the
DARAB denying petitioners' motion for reconsideration; (2) the duplicate original copy
of petitioners' Motion for Reconsideration dated April 6, 2005; (3) the assailed decision
dated March 15, 2004 issued by the DARAB reversing on appeal the decision of the
PARAD and nullifying with finality the order of execution pending appeal; (4) the Order
dated December 8, 2003 issued by the PARAD reinstating the writ of execution earlier
issued; and (5) the Decision dated July 21, 2003 issued by the PARAD in the original
proceedings for the cancellation of the EPs.[34] The CA, therefore, erred when it
dismissed the petition based on such technical ground.

Even assuming that the omitted documents were material to the appeal, the appellate
court, instead of dismissing outright the petition, could have just required petitioners to
submit the necessary documents. In Spouses Espejo v. Ito,[35] the Court held that
"under Section 3 (d), Rule 3 of the Revised Internal Rules of the Court of Appeals,
[36]
 the Court of Appeals is with authority to require the parties to submit additional
documents as may be necessary to promote the interests of substantial justice."
Moreover, petitioners' subsequent submission of the documents required by the CA with
the motion for reconsideration constitutes substantial compliance with Section 6(c),
Rule 43 of the Rules of Court.[37] In Jaro v. CA, this Court held that subsequent and
substantial compliance may call for the relaxation of the rules of procedure.
Particularly:

The amended petition no longer contained the fatal defects that the original petition
had but the Court of Appeals still saw it fit to dismiss the amended petition. The Court
of Appeals reasoned that "non-compliance in the original petition is admittedly
attributable to the petitioner and that no highly justifiable and compelling reason has
been advanced" to the court for it to depart from the mandatory requirements of
Administrative Circular No. 3-96. The hard stance taken by the Court of Appeals in this
case is unjustified under the circumstances.

There is ample jurisprudence holding that the subsequent and substantial

compliance of an appellant may call for the relaxation of the rules of
procedure. In Cusi-Hernandez vs. Diaz and Piglas-Kamao vs. National Labor Relations
Commission, we ruled that the subsequent submission of the missing documents
with the motion for reconsideration amounts to substantial compliance. The
reasons behind the failure of the petitioners in these two cases to comply with the
required attachments were no longer scrutinized. What we found noteworthy in each
case was the fact that the petitioners therein substantially complied with the formal
requirements. We ordered the remand of the petitions in these cases to the Court of
Appeals, stressing the ruling that by precipitately dismissing the petitions "the appellate
court clearly put a premium on technicalities at the expense of a just resolution of the
case."[38] (Citations omitted; emphasis supplied.)

Time and again, this Court has held that a strict and rigid application of technicalities
must be avoided if it tends to frustrate rather than promote substantial justice.[39] As
held in Sta. Ana v. Spouses Carpo:[40]

Rules of procedure are merely tools designed to facilitate the attainment of justice. If
the application of the Rules would tend to frustrate rather than to promote
justice, it is always within our power to suspend the rules or except a
particular case from their operation. Law and jurisprudence grant to courts the
prerogative to relax compliance with the procedural rules, even the most
mandatory in character, mindful of the duty to reconcile the need to put an
end to litigation speedily and the parties' right to an opportunity to be heard.

Our recent ruling in Tanenglian v. Lorenzo is instructive:

We have not been oblivious to or unmindful of the extraordinary situations that merit
liberal application of the Rules, allowing us, depending on the circumstances, to set
aside technical infirmities and give due course to the appeal. In cases where we
dispense with the technicalities, we do not mean to undermine the force and effectivity
of the periods set by law. In those rare cases where we did not stringently apply the
procedural rules, there always existed a clear need to prevent the commission of a
grave injustice. Our judicial system and the courts have always tried to maintain a
healthy balance between the strict enforcement of procedural laws and the guarantee
that every litigant be given the full opportunity for the just and proper disposition of his
cause. (Citations omitted; emphasis supplied.)

Clearly, the dismissal of the petition by the CA on mere technicality is unwarranted in

the instant case.

On the coverage of the subject property

by the agrarian reform program

Petitioners contend that the subject property, particularly Lot No. 1407, is outside the
coverage of the agrarian reform program in view of the enactment of City Ordinance
No. 1313 by the City of Iligan reclassifying the area into a residential/commercial land.
[41]

Unconvinced, the DARAB, in its Decision, noted that the record is bereft of any evidence
that the city ordinance has been approved by the HLURB, thereby allegedly casting
doubt on the validity of the reclassification over the subject property.[42] It further noted
that whether the subject property is exempt from the OLT Program is an administrative
determination, the jurisdiction of which lies exclusively with the DAR Secretary, not with
the DARAB.

Indeed, it is the Office of the DAR Secretary which is vested with the primary and
exclusive jurisdiction over all matters involving the implementation of the agrarian
reform program.[43] However, this will not prevent the Court from assuming jurisdiction
over the petition considering that the issues raised in it may already be resolved on the
basis of the records before Us. Besides, to allow the matter to remain with the Office of
the DAR Secretary would only cause unnecessary delay and undue hardship on the
parties. Applicable, by analogy, is Our ruling in the recent Bagong Pagkakaisa ng
Manggagawa ng Triumph International v. Department of Labor and Employment
Secretary,[44] where We held:

But as the CA did, we similarly recognize that undue hardship, to the point of

injustice, would result if a remand would be ordered under a situation where
we are in the position to resolve the case based on the records before us. As
we said in Roman Catholic Archbishop of Manila v. Court of Appeals:

[w]e have laid down the rule that the remand of the case to the lower court for further
reception of evidence is not necessary where the Court is in a position to resolve the
dispute based on the records before it. On many occasions, the Court, in the public
interest and for the expeditious administration of justice, has resolved actions
on the merits instead of remanding them to the trial court for further
proceedings, such as where the ends of justice, would not be subserved by the
remand of the case.

Thus, we shall directly rule on the dismissal issue. And while we rule that the CA could
not validly rule on the merits of this issue, we shall not hesitate to refer back to its
dismissal ruling, where appropriate. (Citations omitted; emphasis supplied.)

Pertinently, after an assiduous study of the records of the case, We agree with
petitioners that the subject property, particularly Lot No. 1407, is outside the coverage
of the agrarian reform program in view of the enactment by the City of Iligan of its local
zoning ordinance, City Ordinance No. 1313.

It is undeniable that the local government has the power to reclassify agricultural into
non-agricultural lands. In Pasong Bayabas Farmers Association, Inc. v. CA,[45] this Court
held that pursuant 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]."[46]

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.[47]

Significantly, accompanying the Certification[48] dated October 8, 1999 issued by Gil R.

Balondo, Deputy Zoning Administrator of the City Planning and Development Office,
Iligan City, and the letter[49] 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. As this  Court held in Buklod nang
Magbubukid sa Lupaing Ramos, Inc. v. E.M. Ramos and Sons, Inc.,[50] "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."

Despite the foregoing ruling, respondents allege that the subsequent reclassification by
the local zoning ordinance cannot free the land from the legal effects of PD 27 which
deems the land to be already taken as of October 21, 1972, when said law took effect.
Concomitantly, they assert that the rights which accrued from said date must be
respected. They also maintain that the reclassification of the subject property did not
alter its agricultural nature, much less its actual use.[51]

Verily, vested rights which have already accrued cannot just be taken away by the
expedience of issuing a local zoning ordinance reclassifying an agricultural land into a
residential/commercial area. As this Court extensively discussed in Remman
Enterprises, Inc. v. CA:[52]

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, thus:

We now determine whether such lands are covered by the CARL. Section 4 of R.A. 6657
provides that the CARL shall "cover, regardless of tenurial arrangement and commodity
produced, all public and private agricultural lands." As to what constitutes "agricultural
land," it is referred to as "land devoted to agricultural activity as defined in this Act and
not classified as mineral, forest, residential, commercial or industrial land." The
deliberations of the Constitutional Commission confirm this limitation. "Agricultural
lands" are only those lands which are "arable and suitable agricultural lands" and "do
not include commercial, industrial and residential land."

xxx xxx xxx

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 --

. . . Agricultural lands 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. . . . .

However, Natalia should be cautiously applied in light of Administrative Order 04, Series

of 2003, which outlines the rules on the Exemption on Lands from CARP Coverage
under Section (3) of Republic Act No. 6657, and Department of Justice (DOJ) Opinion
No. 44, Series of 1990. It reads:

I.  Prefatory Statement

Republic Act (RA) 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."

Department of Justice Opinion No. 44, Series of 1990, (or "DOJ Opinion 44-1990" for
brevity) and the case of Natalia Realty versus Department of Agrarian Reform (12
August 2993, 225 SCRA 278) opines that with respect to the conversion of agricultural
land covered by RA 6657 to non-agricultural uses, the authority of the Department of
Agrarian Reform (DAR) to approve such conversion may be 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.

However, the reclassification of lands to non-agricultural uses shall not

operate to divest tenant[-]farmers of their rights over lands covered by
Presidential Decree (PD) No. 27, which have been vested prior to 15 June
1988.

As emphasized, the reclassification of lands to non-agricultural cannot be

applied to defeat vested rights of tenant-farmers under Presidential Decree
No. 27.

Indeed, in the recent case of Sta. Rosa Realty Development Corporation v. Amante,
where the Court was confronted with the issue of whether the contentious property
therein is agricultural in nature on the ground that the same had been classified as
"park" since 1979 under the Zoning Ordinance of Cabuyao, as approved by the HLURB,
the Court said:

The Court recognizes the power of a local government to reclassify and convert lands
through local ordinance, especially if said ordinance is approved by the HLURB.
Municipal Ordinance No. 110-54 dated November 3, 1979, enacted by the Municipality
of Cabuyao, divided the municipality into residential, commercial, industrial, agricultural
and institutional districts, and districts and parks for open spaces. It did not convert,
however, existing agricultural lands into residential, commercial, industrial, or
institutional. While it classified Barangay Casile into a municipal park, as shown in its
permitted uses of land map, the ordinance did not provide for the retroactivity of its
classification. In Co vs. Intermediate Appellate Court, it was held that an ordinance
converting agricultural lands into residential or light industrial should be
given prospective application only, and should not change the nature of
existing agricultural lands in the area or the legal relationships existing over
such land. . . . .

A reading of Metro Manila Zoning Ordinance No. 81-01, series of 1981, does not
disclose any provision converting existing agricultural lands in the covered area into
residential or light industrial. While it declared that after the passage of the measure,
the subject area shall be used only for residential or light industrial purposes, it is not
provided therein that it shall have retroactive effect so as to discontinue all rights
previously acquired over lands located within the zone which are neither residential nor
light industrial in nature. This simply means that, if we apply the general rule, as
we must, the ordinance should be given prospective operation only. The
further implication is that it should not change the nature of existing
agricultural lands in the area or the legal relationships existing over such
lands. (Citations omitted; emphasis supplied.)

This, however, raises the issue of whether vested rights have actually accrued in the
instant case. In this respect, We reckon that under PD 27, tenant-farmers of rice and
corn lands were "deemed owners" of the land they till as of October 21, 1972. This
policy, intended to emancipate the tenant-farmers from the bondage of the soil, is
given effect by the following provision of the law:

The tenant farmer, whether in land classified as landed estate or not, shall be deemed
owner of a portion constituting a family size farm of five (5) hectares if not irrigated
and three (3) hectares if irrigated. (Emphasis supplied.)

It should be clarified that even if under PD 27, tenant-farmers are "deemed owners" as
of October 21, 1972, this is not to be construed as automatically vesting upon these
tenant-farmers absolute ownership over the land they were tilling. Certain requirements
must also be complied with, such as payment of just compensation, before full
ownership is vested upon the tenant-farmers. This was elucidated by the Court
in Association of Small Landowners in the Philippines, Inc. v. Sec. of Agrarian Reform:
[53]

It is true that P.D. No. 27 expressly ordered the emancipation of tenant-farmer as

October 21, 1972 and declared that he shall "be deemed the owner" of a portion of land
consisting of a family-sized farm except that "no title to the land owned by him was to
be actually issued to him unless and until he had become a full-fledged member of a
duly recognized farmers' cooperative." It was understood, however, that full
payment of the just compensation also had to be made first, conformably to
the constitutional requirement.

When E.O. No. 228, categorically stated in its Section 1 that:

All qualified farmer-beneficiaries are now deemed full owners as of October 21, 1972 of
the land they acquired by virtue of Presidential Decree No. 27.

it was obviously referring to lands already validly acquired under the said
decree, after proof of full-fledged membership in the farmers' cooperatives
and full payment of just compensation. Hence, it was also perfectly proper for the
Order to also provide in its Section 2 that the "lease rentals paid to the landowner by
the farmer-beneficiary after October 21, 1972 (pending transfer of ownership after full
payment of just compensation), shall be considered as advance payment for the land."

The CARP Law, for its part, conditions the transfer of possession and ownership of the
land to the government on receipt by the landowner of the corresponding payment or
the deposit by the DAR of the compensation in cash or LBP bonds with an accessible
bank. Until then, title also remains with the landowner. No outright change of
ownership is contemplated either. (Citations omitted; emphasis supplied.)

Prior to compliance with the prescribed requirements, tenant-farmers have, at most, an

inchoate right over the land they were tilling. In recognition of this, a CLT is issued to a
tenant-farmer to serve as a "provisional title of ownership over the landholding while
the lot owner is awaiting full payment of [just compensation] or for as long as the
[tenant-farmer] is an `amortizing owner'."[54] This certificate "proves inchoate
ownership of an agricultural land primarily devoted to rice and corn production. It is
issued in order for the tenant-farmer to acquire the land"[55] he was tilling.

Concomitantly, with respect to the LBP and the government, tenant-farmers cannot be
considered as full owners of the land they are tilling unless they have fully paid the
amortizations due them. This is because it is only upon such full payment of the
amortizations that EPs may be issued in their favor.

In Del Castillo v. Orciga, We explained that land transfer under PD 27 is effected in two
(2) stages. The first stage is the issuance of a CLT to a farmer-beneficiary as soon as
the DAR transfers the landholding to the farmer-beneficiary in recognition that said
person is its "deemed owner." And the second stage is the issuance of an EP as proof of
full ownership of the landholding upon full payment of the annual amortizations or lease
rentals by the farmer-beneficiary.[56]

In the case at bar, the CLTs were issued in 1984. Therefore, for all intents and
purposes, it was only in 1984 that private respondents, as farmer-
beneficiaries, were recognized to have an inchoate right over the subject
property prior to compliance with the prescribed requirements. Considering
that the local zoning ordinance was enacted in 1975, and subsequently
approved by the HSRC in 1978, private respondents still had no vested rights
to speak of during this period, as it was only in 1984 that private respondents
were issued the CLTs and were "deemed owners."

The same holds true even if EPs and OCTs were issued in 2001, since
reclassification had taken place twenty-six (26) years prior to their issuance.
Undeniably, no vested rights accrued prior to reclassification and its approval.
Consequently, the subject property, particularly Lot No. 1407, is outside the
coverage of the agrarian reform program.

On the violation of petitioners' right to due process of law

Petitioners contend that DAR failed to notify them that it is subjecting the subject
property under the coverage of the agrarian reform program; hence, their right to due
process of law was violated.[57] Citing De Chavez v. Zobel,[58] both the DAR and the
private respondents claim that the enactment of PD 27 is a statutory notice to all
owners of agricultural lands devoted to rice and/or corn production,[59] implying that
there was no need for an actual notice.

We agree with petitioners. The importance of an actual notice in subjecting a property

under the agrarian reform program cannot be underrated, as non-compliance with it
trods roughshod with the essential requirements of administrative due process of law.
[60]
 Our ruling in Heirs of Jugalbot v. CA[61] is particularly instructive:

Firstly, the taking of subject property was done in violation of constitutional due
process. The Court of Appeals was correct in pointing out that Virginia A. Roa
was denied due process because the DAR failed to send notice of the
impending land reform coverage to the proper party. The records show that
notices were erroneously addressed and sent in the name of Pedro N. Roa who was not
the owner, hence, not the proper party in the instant case. The ownership of the
property, as can be gleaned from the records, pertains to Virginia A. Roa. Notice should
have been therefore served on her, and not Pedro N. Roa.

xxxx

In addition, the defective notice sent to Pedro N. Roa was followed by a DAR
certification signed by team leader Eduardo Maandig on January 8, 1988 stating that
the subject property was tenanted as of October 21, 1972 and primarily devoted to rice
and corn despite the fact that there was no ocular inspection or any on-site fact-finding
investigation and report to verify the truth of the allegations of Nicolas Jugalbot that he
was a tenant of the property. The absence of such ocular inspection or on-site fact-
finding investigation and report likewise deprives Virginia A. Roa of her right to property
through the denial of due process.

By analogy, Roxas & Co., Inc. v. Court of Appeals applies to the case at bar since there
was likewise a violation of due process in the implementation of the Comprehensive
Agrarian Reform Law when the petitioner was not notified of any ocular inspection and
investigation to be conducted by the DAR before acquisition of the property was to be
undertaken. Neither was there proof that petitioner was given the opportunity to at
least choose and identify its retention area in those portions to be acquired. Both in the
Comprehensive Agrarian Reform Law and Presidential Decree No. 27, the right of
retention and how this right is exercised, is guaranteed by law.

Since land acquisition under either Presidential Decree No. 27 and the
Comprehensive Agrarian Reform Law govern the extraordinary method of
expropriating private property, the law must be strictly construed. Faithful
compliance with legal provisions, especially those which relate to the
procedure for acquisition of expropriated lands should therefore be
observed. In the instant case, no proper notice was given to Virginia A. Roa by the
DAR. Neither did the DAR conduct an ocular inspection and investigation. Hence, any
act committed by the DAR or any of its agencies that results from its failure to comply
with the proper procedure for expropriation of land is a violation of constitutional due
process and should be deemed arbitrary, capricious, whimsical and tainted with grave
abuse of discretion. (Citations omitted; emphasis supplied.)

Markedly, a reading of De Chavez invoked by both the DAR and private respondents
does not show that this Court ever made mention that actual notice may be dispensed
with under PD 27, its enactment being a purported "statutory notice" to all owners of
agricultural lands devoted to rice and/or corn production that their lands are subjected
to the OLT program.
Quite contrarily, in Sta. Monica Industrial & Dev't. Corp. v. DAR,[62] this Court
underscored the significance of notice in implementing the agrarian reform program
when it stated that "notice is part of the constitutional right to due process of law. It
informs the landowner of the State's intention to acquire a private land upon payment
of just compensation and gives him the opportunity to present evidence that his
landholding is not covered or is otherwise excused from the agrarian law."

The Court, therefore, finds interest in the holding of the DARAB that petitioners were
not denied the right to due process despite the fact that only the Nanamans were
identified as the owners. Particularly:

Fourthly, the PARAD also ruled that the petitioners were denied the right to be given
the notice since only the Nanamans were identified as the owners. The fault lies with
petitioners who did not present the tax declaration in the name of Dr. Deleste as of
October 21, 1972. It was only in 1995 that Civil Case No. 698 was finally decided by
the Supreme Court dividing the 34.7 hectares between the Delestes and the Nanamans.
Note that Dr. Deleste died in 1992 after PD 27 was promulgated, hence, the subject
land or his ½ share was considered in his name only (see Art. 777, New Civil Code).
Even then, it must be borne in mind that on September 26, 1972, PD No. 2 was issued
by President Marcos proclaiming the whole country as a land reform area, this was
followed by PD 27. This should have alarmed them more so when private respondents
are in actual possession and cultivation of the subject property.

But it was incumbent upon the DAR to notify Deleste, being the landowner of the
subject property. It should be noted that the deed of sale executed by Hilaria in favor of
Deleste was registered on March 2, 1954, and such registration serves as a constructive
notice to the whole world that the subject property was already owned by Deleste by
virtue of the said deed of sale. In Naval v. CA, this Court held:

Applying the law, we held in Bautista v. Fule that the registration of an instrument

involving unregistered land in the Registry of Deeds creates constructive
notice and binds third person who may subsequently deal with the same property.[63] x
x x (Emphasis supplied.)

It bears stressing that the principal purpose of registration is "to notify other persons
not parties to a contract that a transaction involving the property has been entered
into."[64] There was, therefore, no reason for DAR to feign ignorance of the transfer of
ownership over the subject property.

Moreover, that DAR should have sent the notice to Deleste, and not to the Nanamans,
is bolstered by the fact that the tax declaration in the name of Virgilio was already
canceled and a new one issued in the name of Deleste.[65] Although tax declarations or
realty tax payments of property are not conclusive evidence of ownership, they are
nonetheless "good indicia of possession in the concept of an owner, for no one in his
right mind would be paying taxes for a property that is not in his actual or, at least,
constructive possession."[66]

Petitioners' right to due process of law was, indeed, violated when the DAR failed to
notify them that it is subjecting the subject property under the coverage of the agrarian
reform program.
On this note, We take exception to our ruling in Roxas & Co., Inc. v. CA,[67] where,
despite a finding that there was a violation of due process in the implementation of the
comprehensive agrarian reform program when the petitioner was not notified of any
ocular inspection and investigation to be conducted by the DAR before acquiring the
property, thereby effectively depriving petitioner the opportunity to at least choose and
identify its retention area in those portions to be acquired,[68] this Court nonetheless
ruled that such violation does not give the Court the power to nullify the certificates of
land ownership award (CLOAs) already issued to the farmer-beneficiaries, since the
DAR must be given the chance to correct its procedural lapses in the acquisition
proceedings.

Manifesting her disagreement that this Court cannot nullify illegally issued CLOAs and
should first ask the DAR to reverse and correct itself, Justice Ynares-Santiago, in her
Concurring and Dissenting Opinion,[69] stated that "[i]f the acts of DAR are patently
illegal and the rights of Roxas & Co. violated, the wrong decisions of DAR should be
reversed and set aside. It follows that the fruits of the wrongful acts, in this case the
illegally issued CLOAs, must be declared null and void." She also noted that "[i]f CLOAs
can under the DAR's own order be cancelled administratively, with more reason can the
courts, especially the Supreme Court, do so when the matter is clearly in issue."

In the same vein, if the illegality in the issuance of the CLTs is patent, the Court must
immediately take action and declare the issuance as null and void. There being no
question that the CLTs in the instant case were "improperly issued, for which reason,
their cancellation is warranted."[70] The same holds true with respect to the EPs and
certificates of title issued by virtue of the void CLTs, as there can be no valid transfer of
title should the CLTs on which they were grounded are void.[71] Cancellation of the EPs
and OCTs are clearly warranted in the instant case since, aside from the violation of
petitioners' right to due process of law, the subject property is outside the coverage of
the agrarian reform program.

Issue of Validity of EPs Not Barred by Res Judicata

The LBP maintains that the issue of the EPs' validity has already been settled by this
Court in Heirs of Sofia Nanaman Lonoy v. Secretary of Agrarian Reform,[72] where We
held that the EPs and OCTs issued in 2001 had already become indefeasible and
incontrovertible by the time the petitioners therein instituted the case in 2005; hence,
their issuance may no longer be reviewed.[73]

In effect, the LBP raises the defense of res judicata in order to preclude a "relitigation"
of the issue concerning the validity of the EPs issued to private respondents.

Notably, the doctrine of res judicata has two aspects, namely: (1) "bar by prior
judgment,"[74] wherein the judgment in a prior case bars the prosecution of a second
action upon the same claim, demand, or cause of action;[75] and (2) "conclusiveness of
judgment,"[76] which precludes relitigation of a particular fact or issue in another action
between the same parties on a different claim or cause of action.[77]

Citing Agustin v. Delos Santos,[78] this Court, in Spouses Antonio v. Sayman,

[79]
  expounded on the difference between the two aspects of res judicata:
The principle of res judicata is applicable by way of (1) "bar by prior judgment" and (2)
"conclusiveness of judgment." This Court had occasion to explain the difference
between these two aspects of res judicata as follows:

There is "bar by prior judgment" when, as between the first case where the judgment
was rendered and the second case that is sought to be barred, there is identity of
parties, subject matter, and causes of action. In this instance, the judgment in the first
case constitutes an absolute bar to the second action. Otherwise put, the judgment or
decree of the court of competent jurisdiction on the merits concludes the litigation
between the parties, as well as their privies, and constitutes a bar to a new action or
suit involving the same cause of action before the same or other tribunal.

But where there is identity of parties in the first and second cases, but no
identity of causes of action, the first judgment is conclusive only as to those
matters actually and directly controverted and determined and not as to
matters merely involved therein. This is the concept of res judicata known as
"conclusiveness of judgment." Stated differently, any right, fact or matter in issue
directly adjudicated or necessarily involved in the determination of an action before a
competent court in which judgment is rendered on the merits is conclusively settled by
the judgment therein and cannot again be litigated between the parties and their
privies whether or not the claim, demand, purpose, or subject matter of the two actions
is the same. (Citations omitted; emphasis supplied.)

To be sure, conclusiveness of judgment merits application "when a fact or question has

been squarely put in issue, judicially passed upon, and adjudged in a former suit by a
court of competent jurisdiction."[80] Elucidating further on this second aspect of res
judicata, the Court, in Spouses Antonio, stated:

x x x The fact or question settled by final judgment or order binds the parties to that
action (and persons in privity with them or their successors-in-interest), and continues
to bind them while the judgment or order remains standing and unreversed by proper
authority on a timely motion or petition; the conclusively-settled fact or question cannot
again be litigated in any future or other action between the same parties or their privies
and successors-in-interest, in the same or in any other court of concurrent jurisdiction,
either for the same or for a different cause of action. Thus, only the identities of
parties and issues are required for the operation of the principle of
conclusiveness of judgment.[81] (Citations omitted; emphasis supplied.)

Applying the above statement of the Court to the case at bar, We find that LBP's
contention that this Court's ruling in Heirs of Sofia Nanaman Lonoy that the EPs and
OCTs issued in 2001 had already become indefeasible and incontrovertible precludes a
"relitigation" of the issue concerning the validity of the EPs issued to private
respondents does not hold water.

In the first place, there is no identity of parties in Heirs of Sofia Nanaman Lonoy and
the instant case. Arguably, the respondents in these two cases are similar. However,
the petitioners are totally different. In Heirs of Sofia Nanaman Lonoy, the petitioners
are the more than 120 individuals who claim to be descendants of Fulgencio Nanaman,
Gregorio's brother, and who collectively assert their right to a share in Gregorio's
estate, arguing that they were deprived of their inheritance by virtue of the improper
issuance of the EPs to private respondents without notice to them. On the other hand,
in the instant case, petitioners are the heirs of Deleste who seek nullification of the EPs
issued to private respondents on grounds of violation of due process of law, disregard
of landowner's right of retention, improvident issuance of EPs and OCTs, and non-
coverage of the agrarian reform program, among others. Evidently, there is even no
privity among the petitioners in these two cases.

And in the second place, the issues are also dissimilar. In Heirs of Sofia Nanaman
Lonoy, the issue was whether the filing of a petition for prohibition was the proper
remedy for the petitioners therein, considering that the EPs and OCTs had already been
issued in 2001, four (4) years prior to the filing of said petition in 2005. In the instant
case, however, the issue is whether the EPs and OCTs issued in favor of private
respondents are void, thus warranting their cancellation.

In addition, the factual circumstances in these two cases are different such that the
necessity of applying the rule on indefeasibility of title in one is wanting in the other.
In Heirs of Sofia Nanaman Lonoy, the petition for prohibition was filed by the
petitioners therein in 2005, notwithstanding the fact that the EPs and OCTs had already
been issued in 2001. For that reason, apart from making a ruling that "[p]rohibition, as
a rule, does not lie to restrain an act that is already a fait accompli," it becomes
incumbent upon this Court to hold that:

x x x Considering that such EPs and OCTs were issued in 2001, they had become
indefeasible and incontrovertible by the time petitioners instituted CA-G.R. SP
No. 00365 in 2005, and may no longer be judicially reviewed.[82] (Emphasis supplied.)

On the contrary, in the instant case, the petition for nullification of private respondents'
EPs and OCTs was filed on February 28, 2002. Taking into account that the EPs and
OCTs were issued on August 1, 2001 and October 1, 2001, respectively, the filing of the
petition was well within the prescribed one year period, thus, barring the defense of
indefeasibility and incontrovertibility. Even if the petition was filed before the DARAB,
and not the Regional Trial Court as mandated by Sec. 32 of the Property Registration
Decree,[83] this should necessarily have the same effect, considering that DARAB's
jurisdiction extends to cases involving the cancellation of CLOAs, EPs, and even of
certificates of title issued by virtue of a void EP. As this Court held in Gabriel v. Jamias:
[84]

It is well-settled that the DAR, through its adjudication arm, i.e., the DARAB and its
regional and provincial adjudication boards, exercises quasi-judicial functions and
jurisdiction on all matters pertaining to an agrarian dispute or controversy and the
implementation of agrarian reform laws. Pertinently, it is provided in the DARAB
Revised Rules of Procedure that the DARAB has primary and exclusive jurisdiction, both
original and appellate, to determine and adjudicate all agrarian disputes involving the
implementation of the Comprehensive Agrarian Reform Program (CARP) and related
agrarian reform laws. Such jurisdiction shall extend to cases involving the
issuance, correction and cancellation of Certificates of Land Ownership Award
(CLOAs) and Emancipation Patents which are registered with the Land
Registration Authority.

This Court has had the occasion to rule that the mere issuance of an emancipation
patent does not put the ownership of the agrarian reform beneficiary beyond attack and
scrutiny. Emancipation patents may be cancelled for violations of agrarian laws, rules
and regulations. Section 12 (g) of P.D. No. 946 (issued on June 17, 1976) vested the
then Court of Agrarian Relations with jurisdiction over cases involving the cancellation
of emancipation patents issued under P.D. No. 266. Exclusive jurisdiction over such
cases was later lodged with the DARAB under Section 1 of Rule II of the DARAB Rules
of Procedure.

For sure, the jurisdiction of the DARAB cannot be deemed to disappear the
moment a certificate of title is issued, for, such certificates are not modes of
transfer of property but merely evidence of such transfer, and there can be no
valid transfer of title should the CLOA, on which it was grounded, be void. The
same holds true in the case of a certificate of title issued by virtue of a void
emancipation patent.

From the foregoing, it is therefore undeniable that it is the DARAB and not the regular
courts which has jurisdiction herein, this notwithstanding the issuance of Torrens titles
in the names of the petitioners. For, it is a fact that the petitioners' Torrens titles
emanated from the emancipation patents previously issued to them by virtue of being
the farmer-beneficiaries identified by the DAR under the OLT of the government. The
DAR ruling that the said emancipation patents were erroneously issued for failing to
consider the valid retention rights of respondents had already attained finality.
Considering that the action filed by respondents with the DARAB was precisely to annul
the emancipation patents issued to the petitioners, the case squarely, therefore, falls
within the jurisdiction of the DARAB. x x x (Citations omitted; emphasis supplied.)

Inevitably, this leads to no other conclusion than that Our ruling in Heirs of Sofia
Nanaman Lonoy concerning the indefeasibility and incontrovertibility of the EPs and
OCTs issued in 2001 does not bar Us from making a finding in the instant case that the
EPs and OCTs issued to private respondents are, indeed, void.

With the foregoing disquisition, it becomes unnecessary to dwell on the other issues
raised by the parties.

WHEREFORE, the Court GRANTS the petition and REVERSES and SETS ASIDE the

CA's October 28, 2004 and September 13, 2005 Resolutions in CA-G.R. SP No. 85471.
The Emancipation Patents and Original Certificates of Title covering the subject
property, particularly Lot No. 1407, issued in favor of private respondents are hereby
declared NULL and VOID.

The DAR is ordered to CANCEL the aforementioned Emancipation Patents and Original

Certificates of Title erroneously issued in favor of private respondents.

No pronouncement as to costs.

SO ORDERED.
G.R. No. 169331 : September 05, 2011]

AGAPITO ROM, PASTORA P. ROSEL, VALENTINO R. ANILA, JUANITO P. ROSEL,

VIRGILIO R. CASAL, LUIS H. BAUTISTA, CRESENCIANO M. ARGENTE, ANA M.
 ARGENTE, GIL B. CUENO, ENGRACIO B. BELTRAN, ANGELITO B. AURE,
ESTEBAN C. BENDO, MARIA ALBAO, GILBERT H. DEL MUNDO, EUFRONIO H.
DEL MUNDO, PASTOR H. DEL MUNDO, ANTONIO H. DEL MUNDO, ALBERTA H.
DEL MUNDO, PEDRO H. DEL MUNDO, ROLANDO B. ATIE, PETITIONERS, VS.
ROXAS & COMPANY, INC., RESPONDENT.

DECISION

DEL CASTILLO, J.:

Justifying their resort to a petition for certiorari before the appellate court and insisting
that the Department of Agrarian Reform (DAR) Orders they assailed therein were issued
without jurisdiction, petitioners are now before this Court for recourse.

This Petition for Review on Certiorari assails the Decision[1] dated April 29, 2005 of the
Court of Appeals (CA) in CA-G.R. SP No. 82709 dismissing the Petition
for Certiorari which assailed the DAR Orders[2] dated November 6, 2002 and December
12, 2003 in ADM Case No. A-9999-014-98.  Said DAR November 6, 2002 Order granted
respondent Roxas & Company, Inc.'s Application for Exemption from the
Comprehensive Agrarian Reform Program's (CARP) coverage while the December 12,
2003 Order denied petitioners' Motion for Reconsideration thereto. Likewise assailed
herein is the CA Resolution[3] dated August 11, 2005 denying the Motion for
Reconsideration of its April 29, 2005 Decision.

Factual Antecedents

On September 30, 1997, respondent sought the exemption of 27 parcels of land located
in Barangay Aga, Nasugbu, Batangas, having an aggregate area of 21.1236 hectares
and constituting portions of the land covered by Transfer Certificate of Title (TCT) No.
T-44664 from the coverage of CARP, pursuant to DAR Administrative Order (AO) No. 6,
Series of 1994.[4]  The application was docketed as DAR ADM Case No. A-9999-014-98.

Respondent asserted that Comprehensive Agrarian Reform Law (CARL) covers only
agricultural land[5] which is defined under Section 3(c) thereof as "land devoted to
agricultural activity x x x and not classified as mineral, forest, residential, commercial
or industrial land."  Respondent claimed that prior to the effectivity of the CARL on June
15, 1988, the lands subject of its application were already re-classified as part of the
Residential Cluster Area specified in Zone A VII of the Nasugbu Municipal Zoning
Ordinance No. 4, Series of 1982, which zoning ordinance was approved by the Human
Settlement Regulatory Commission (HSRC [now the Housing and Land Use Regulatory
Board (HLURB)]) under HSRC Resolution No. 123, Series of 1983.  Respondent cited
DOJ Opinion No. 44 (1990) which provides that lands already classified by a valid
zoning ordinance for commercial, industrial or residential use, which ordinance was
approved prior to the effectivity of the CARL, no longer need conversion clearance from
the DAR.[6]

In support of its application for exemption, respondent submitted, among others, the
following documents:
 1. Letter-application dated 29 September 1997 signed by Elino SJ. Napigkit, for and
on behalf of Roxas & Company, Inc., seeking exemption from CARP coverage of
subject landholdings;

xxxx

3. Photocopy of TCT No. T-44664 and the corresponding Declaration of Real

Property No. 024-17-013-01-001;

4. Location and vicinity maps of subject landholdings;

5. Certification dated 10 July 1997 issued by Administrator Reynaldo Garcia

[Administrator Garcia], Municipal Planning and Development Coordinator (MPDC)
and Zoning Administrator of Nasugbu, Batangas, stating that the subject parcels
of land are within the Residential Cluster Area as specified in Zone VII of
Municipal Zoning Ordinance No. 4, series of 1982, approved by the Human
Settlements Regulatory Commission (HSRC), now the Housing and Land Use
Regulatory Board (HLURB), thru Resolution No. 123, Series of 1983, dated 4 May
1983;.

6. Certification dated 31 August 1998 issued by Engr. Alfredo M. Tan II [Engr. Tan],
Regional Director, HLURB, Region IV, stating that the subject parcels of land
appear to be within the Residential Cluster Area as specified in Zone VII of
Municipal Zoning Ordinance No. 4, Series of 1982, as approved under HSRC
Resolution No. 123, Series of 1983, dated 4 May 1983;

7. Three (3) Certifications all dated 8 September 1997 issued by Administrator

Rolando T. Bonrostro, Regional Irrigation Manager, National Irrigation
Administration (NIA), Region IV; stating that the subject parcels of land are not
irrigated, not irrigable lands and not covered by irrigation projects with firm
funding commitment; and,

8. Certification dated 18 January 1999, issued by Manuel J. Limjoco, Jr., Municipal

Agrarian Reform Officer of Nasugbu, Batangas, stating that the subject parcels of
land are not covered by Operation Land Transfer (OLT) but covered by a
collective Certificate of Land Ownership Award (CLOA) No. 6653 issued to
twenty-seven (27) farmer-beneficiaries.

x x x x[7]

Ruling of the Department of Agrarian Reform

Considering that the application for exemption was not accompanied by proof of
disturbance compensation,[8] the DAR, through its Center for Land Use Policy, Planning
and Implementation (CLUPPI-II), directed respondent to submit proof of payment of
disturbance compensation and/or waiver of rights of bona fide occupants.[9]
To comply with the directive, respondent offered payment of disturbance compensation
and attempted to obtain the required waivers from herein petitioners who are the
farmer-beneficiaries of the subject parcels of land as identified by the DAR.  However,
the parties failed to reach an agreement as regards the amount of disturbance
compensation, hence, respondent filed on September 28, 2001 a Petition[10] to fix
disturbance compensation before the Provincial  Agrarian  Reform

Adjudication Board (PARAD) of Batangas.

In its Order[11] of November 6, 2002, the DAR granted the application in this wise:

WHEREFORE, premises considered, the Application for Exemption Clearance from CARP
coverage filed by Roxas & Company, Inc., involving twenty-seven (27) parcels of land,
specifically described in pages 1 and 2 of this Order,[[12]] being portions of TCT No. T-
44664, with an aggregate area of 21.1236 hectares located [in] Barangay Aga,
Nasugbu, Batangas is hereby GRANTED, subject to the following conditions:

1. The farmer-occupants within subject parcels of land shall be maintained in their

peaceful possession and cultivation of their respective areas of tillage until a final
determination has been made on the amount of disturbance compensation due
and entitlement of such farmer-occupants thereto by the PARAD of Batangas.

2. No development shall be undertaken within the subject parcels of land until the
appropriate disturbance compensation has been paid to the farmer-occupants
who are determined by the PARAD to be entitled thereto.  Proof of payment of
disturbance compensation shall be submitted to this Office within ten (10) days
from such payment; and

3. The cancellation of the CLOA issued to the farmer beneficiaries shall be subject
of a separate proceeding before the PARAD of Batangas.

SO ORDERED.[13]

From this Order, petitioners filed a Motion for Reconsideration,[14] Supplemental Motion

for Reconsideration[15] and Second Supplemental Motion for Reconsideration.[16] They
averred that the bases of the DAR in granting respondent's application for exemption
were the Certification[17] dated July 10, 1997 of Administrator Garcia and the
Certification[18] dated August 31, 1998 issued by Engr. Tan of the HLURB, Region IV,
both of which stated that the subject lands are within the residential cluster area as
specified in Zone VII of the (Nasugbu) Municipal Zoning Ordinance No. 4, series of
1982, as approved under HSRC Resolution No. 123, Series of 1983, dated May 4,
1983.  However, they claimed that these certifications have already been superseded
by Sangguniang Bayan Resolution No. 30, Series of 1993,[19] which classified the area
of Barangay Aga as an agricultural zone except for the 50-meter strip from both sides
of the National Road with existing roads, which was classified as residential zone. 
Petitioners also alleged that the application for exemption is already barred by laches
or estoppel considering that Certificates of Land Ownership Award (CLOAs) have been
issued to petitioners way back in 1991 and that since then, they have been occupying
the subject parcels of land in the concept of an owner.  Finally, they claimed that they
were never notified of the proceedings in the said application despite their being
parties-in-interest thereto.

Said motions, however, were dismissed by the DAR in an Order[20] dated December 12,
2003.

Aggrieved, petitioners filed a Petition for Certiorari[21] before the CA.

Ruling of the Court of Appeals

Petitioners averred that Sec. III (B) of DAR AO No. 06, Series of 1994 requires that an
application for exemption must be accompanied by certain documents[22] before DAR
acquires jurisdiction over the application. And since respondent failed to attach to its
application the required proof of disturbance compensation, petitioners claimed that the
DAR has no jurisdiction to act on the same. Moreover, petitioners alleged that the
payment of disturbance compensation is a condition sine qua non  to the grant of
exemption and since no disturbance compensation was paid to them, then the DAR
gravely abused its discretion amounting to lack or excess of jurisdiction in issuing its
assailed Orders.

Petitioners reiterated their argument that the Certifications dated July 10, 1997 and
August 31, 1998, respectively issued by the MPDC and HLURB, and used as bases for
DAR's assailed Orders granting the application for exemption, have already been
superseded by Sangguniang Bayan Resolution No. 30, Series of 1993.  This fact was
affirmed by the Certification dated January 29, 2003 likewise issued by Administrator
Garcia of the MPDC.  Also, petitioners argued that since respondent had previously
voluntarily offered to sell the subject land to the DAR, then they (petitioners) have
already acquired a vested right over the subject properties.

In a Decision[23] dated April 29, 2005, the CA dismissed the petition for certiorari it

being an improper remedy.  The CA held that petitioners should have filed a petition for
review under Section 1, Rule 43 of the Rules of Court.[24]  Even if the certiorari petition
is considered as properly filed, the CA ruled that it would still dismiss the same as there
was no grave abuse of discretion on the part of the DAR in issuing the assailed Orders.

Petitioners filed a Motion for Reconsideration[25] and a Supplemental Motion for

Reconsideration[26] but both were denied in a Resolution[27] dated August 11, 2005.

Hence, this Petition for Review on Certiorari.

Issues

Petitioners raise the following issues:

i. WHETHER THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR OR

GRAVE ABUSE OF DISCRETION IN AFFIRMING THE GRANT OF RESPONDENT
ROXAS' APPLICATION FOR EXEMPTION FROM COVERAGE OF THE CARL DESPITE
THE FACT THAT THE PROPERTY [HAS BEEN THE SUBJECT OF RESPONDENT'S
VOLUNTARY OFFER TO SELL TO THE DAR]
 ii. WHETHER THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR OR
GRAVE ABUSE OF DISCRETION IN AFFIRMING THE GRANT OF RESPONDENT
ROXAS' APPLICATION FOR EXEMPTION FROM COVERAGE OF THE CARL
WITHOUT THE REQUIRED PAYMENT OF DISTURBANCE COMPENSATION,
WITHOUT ANY UNDERTAKING TO PAY THE SAID COMPENSATION AND WITHOUT
ANY BOND BEING POSTED BY THE LANDOWNER TO SECURE PAYMENT OF SAID
COMPENSATION

iii. WHETHER THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR OR

GRAVE ABUSE OF DISCRETION IN RULING THAT THE  REMEDY OF APPEAL IS 
NOT AVAILABLE IN THIS CASE[28]

The Parties' Arguments

Petitioners insist that a certiorari petition, instead of a petition for review under Rule 43
of the Rules of Court, is the proper remedy since what they principally questioned
before the CA was the jurisdiction of the DAR to take cognizance of the application. 
Even assuming that a petition for review is the proper mode of appeal, petitioners
contend that they can still resort to the remedy of certiorari pursuant to settled
jurisprudence[29] that the Court, in exceptional cases, may consider certiorari  as the
appropriate remedy.[30] "[T]he writ [may] be granted where necessary to prevent a
substantial wrong or to do substantial justice."[31] Since in this case, petitioners stand to
lose the land they are tilling without receiving the appropriate disturbance
compensation, the ends of justice dictate that they be entitled to the writ of certiorari.

Petitioners likewise aver that since respondent had previously voluntarily offered to sell
the subject parcels of land to the DAR, it can no longer withdraw the same from the
CARP's coverage.  Under DAR Memorandum Circular No. 02, Series of 1998,[32] a
landowner who voluntarily offers to sell his property but failed to submit the required
documents shall be notified that the property offered for sale shall be acquired by
compulsory acquisition. This means that once a landowner has voluntarily offered to sell
his property, he can no longer withdraw it from the coverage of the land reform law as
the DAR will nevertheless acquire it through compulsory acquisition even if he fails to
submit the documents required. Moreover, petitioners claim that estoppel has already
set in considering that respondent filed its application only after eight years from the
time it voluntarily offered to sell the property.

Petitioners also cite Section III (B), paragraph 8 of DAR AO No. 06, Series of 1994
which provides that an application for exemption should be accompanied by proof of
payment of disturbance compensation, if the area is occupied by farmers, or
waiver/undertaking by the occupants that they will vacate the area whenever required. 
There being no payment of disturbance compensation here, respondent should have
submitted such a waiver/undertaking.  Also, when respondent was granted exemption,
conditional as it is since same is subject to the payment of disturbance compensation, it
should have posted a bond in an amount to be determined by the adjudicator pursuant
to paragraphs 4.4 and 4.5 of DAR AO No. 4, Series of 2003[33] viz:

4.4. Whenever there is a dispute on the fixing of disturbance compensation or

entitlement to disturbance compensation, the Regional Director shall refer the matter to
the Adjudicator who shall be bound to take cognizance of and resolve the case despite
the non-finality of the issue on whether or not the subject land is exempt from CARP.

4.5. The Approving Authority may grant a conditional exemption order, despite non-
payment of disturbance compensation or while awaiting determination of entitlement
thereto, subject however to the condition that the applicant and/or landowner shall post
a bond in an amount to be determined by the Adjudicator. Notwithstanding the posting
of such bond, the property applied for exemption shall not be developed for non-
agricultural purposes and the farmers, agricultural lessees, share tenants, farmworkers,
and actual tillers thereof cannot be ejected therefrom until the finality of the exemption
order.

In contravention of the above-quoted provisions, however, no bond was posted in this

case.

Lastly, petitioners cite Section VIII of said DAR AO No. 04, Series of 2003

which provides that:

VIII. EFFECT ON PRE-EXISTING CARP COVERAGE

When the filing of an application for exemption clearance is in response to a notice of

CARP coverage, the DAR shall deny due course to the application if it was filed after
sixty (60) days from the date the landowner received a notice of CARP Coverage.

Petitioners allege that here, respondent filed its application for exemption more than
eight years from its receipt of the notice of CARP coverage on August 23, 1989.  While
conceding that said administrative order was issued only in 2003, petitioners argue that
same is applicable to respondent as this merely interpreted both Sec. 3 of R.A. No.
6657 and DOJ Opinion No. 44, Series of 1990, which were already in effect long before
respondent filed its application.

Respondent, for its part, emphasizes that petitioners resorted to a wrong mode of
appeal.  For this alone, it contends that the CA correctly dismissed petitioners' petition
for certiorari.

As regards petitioners' other arguments, respondent addresses them point by point.

Respondent refutes petitioners' contention that a landowner can no longer withdraw his
property from the coverage of CARP once he has voluntarily offered to sell the same to
the DAR by invoking this Court's ruling in the related case of Roxas & Company, Inc. v.
Court of Appeals.[34]  There it was held that as part of administrative due process, the
DAR must first comply with the notice requirement before a Voluntary Offer to Sell
(VOS) is accepted.  For failure of the DAR to send notices to Roxas to attend the survey
and the land valuation meeting before accepting the VOS, the acceptance of the VOS
and the entire acquisition proceedings over
three haciendas, including Hacienda Caylaway, where the parcels of land subject of this
case are located, were nullified.  Moreover, respondent stresses that DAR Memorandum
Circular No. 02 Series of 1998 upon which petitioners anchor their assertion that a VOS
cannot be withdrawn was issued 10 years after the VOS in this case was made in 1988.
Aside from arguing that the circular cannot be applied retroactively, respondent asserts
that there is nothing in such circular which prohibits, either expressly or impliedly, a
landowner from withdrawing a VOS.  If at all, said circular merely serves as guide to be
followed by the concerned DAR officials in cases where landowners have voluntarily
offered to sell their land to the government.

Anent the claim that payment of disturbance compensation is a condition sine qua

non to the grant of an application for exemption, respondent invokes the Court's ruling
in Bacaling v. Muya[35] that farmer-beneficiaries are not entitled to disturbance
compensation because the lots subject thereof never became available for agrarian
reform.  This was because said lots were already classified as residential prior to the
effectivity of Presidential Decree No. 27 and R.A. No. 6657.  Similarly in this case,
respondent contends that petitioners are not entitled to disturbance compensation
because the subject landholdings are not and have never been available for agrarian
reform as they have been classified as residential properties prior to the effectivity of
the CARL.  However, believing in good faith that it has the legal obligation to pay
disturbance compensation, respondent still filed a Petition to fix disturbance
compensation before the PARAD after petitioners refused to accept respondent's offer of
disturbance compensation or to execute a waiver/undertaking that they will vacate the
area whenever required.

With respect to the requirement of bond under paragraph 4.5 of DAR AO No. 4, Series
of 2003, respondent counter-argues that such was not a requirement at the time of the
filing of its application. It asserts that said administrative order cannot be retroactively
applied to its application which was filed prior to said administrative order's issuance.

Finally, respondent avers that petitioners' invocation of Section VIII of DAR AO No. 04,
Series of 2003 is downright illogical.  It points out that it received a notice of
compulsory acquisition way back in 1989 while said AO was issued only in 2003. 
Respondent asserts that this provision cannot be given retroactive application;
otherwise, it would prejudice its vested right to file an application, which at that time,
was not yet subject to the 60-day period. More importantly, there was no valid notice of
coverage to speak of as held in Roxas & Company, Inc. v. Court of Appeals.

Our Ruling

There is no merit in the petition.

We note at the outset that this case is intimately related to Roxas & Company, Inc. v.
Court of Appeals [36] and Roxas & Company, Inc. v. DAMBA-NFSW,[37] earlier resolved by
this Court on December 17, 1999 and December 4, 2009, respectively.  In fact, the
present case is similar to one[38] of the seven consolidated petitions in Roxas &
Company, Inc. v. DAMBA-NFSW, except that the parcels of land involved therein are
located in Hacienda Palico, while here, they are situated in Hacienda Caylaway.[39]

For purposes of discussion, a brief overview of said two cases is proper.

Roxas & Company, Inc. v. Court of Appeals involves three haciendas in Nasugbu,

Batangas, namely, Palico, Banilad and Caylaway, owned by herein respondent Roxas &
Company, Inc.  At issue there was the validity of the haciendas' coverage under the
CARP as well as Roxas' application for their conversion from agricultural to non-
agricultural use. For failure to observe due process, the acquisition proceedings over
the haciendas were nullified.  With respect, however, to the application for conversion,
the Court held that DAR is in a better position to resolve the same, it being the primary
agency possessing the necessary expertise on the matter.  In its Decision dated
December 17, 1999, this Court ordered the remand of the case to the DAR for proper
acquisition proceedings and determination of Roxas's application for conversion.

Roxas & Company, Inc. v. DAMBA-NFSW, on the other hand, involved seven
consolidated petitions,[40] the main subjects of which were Roxas' application for
conversion from agricultural to non-agricultural use of said three haciendas and
exemption from CARP coverage.  Apparently, after the remand of the case to the DAR
in Roxas & Company, Inc. v. Court of Appeals and during the pendency of Roxas'
application for conversion, it likewise filed an application for exemption of
the haciendas from the CARP's coverage on the basis of Presidential Proclamation No.
1520[41] and DAR AO No. 6, Series of 1994.[42]

Two of the seven consolidated petitions relevant to the present case are G.R. Nos.
167505[43] and 179650.[44] Both petitions revolved around Roxas' application for
exemption under DAR AO No. 6, Series of 1994 invoking as basis the same (Nasugbu)
Municipal Zoning Ordinance No. 4 earlier alluded to. In resolving them, the Court
recognized the power of a local government unit to classify and convert land from
agricultural to non-agricultural prior to the effectivity of the CARL and thus upheld the
validity of said zoning ordinance. However, in G.R. No. 179650, the Court found that
the DAR acted with grave abuse of discretion when it granted the application for
exemption considering that there exist uncertainties on the location and identities of the
properties being applied for exemption. It stated that Roxas should have submitted the
comprehensive land use plan and pinpointed therein the location of the properties to
prove that they are indeed within the area of coverage of the subject (Nasugbu)
Municipal Zoning Ordinance No. 4.

With respect to G.R. No. 167505, we quote the pertinent portions of the Court's
December 4, 2009 Decision:

In its application, Roxas & Co. submitted the following documents:

1. Letter-application dated 29 September 1997 signed by Elino SJ. Napigkit, for and on
behalf of Roxas & Company, Inc.,  seeking exemption from

CARP coverage of subject landholdings;

2. Secretary's Certificate dated September 2002 executed by Mariano M. Ampil III,

Corporate Secretary of Roxas & Company, Inc., indicating a Board Resolution
authorizing him to represent the corporation in its application for exemption with the
DAR.  The same Board Resolution revoked the authorization previously granted to the
Sierra Management & Resources Corporation;

3. Photocopy of TCT No. 985 and its corresponding Tax Declaration No. 0401;

4. Location and vicinity maps of subject landholdings;

5. Certification dated 10 July 1997 issued by Reynaldo Garcia, Municipal
Planning and Development Coordinator (MPDC) and Zoning Administrtor of
Nasugbu, Batangas, stating that the subject parcels of land are within the
Urban Core Zone as specified in Zone A. VII of Municipal Zoning Ordinance No.
4, Series of 1982, approved by the Human Settlements Regulatory Commission
(HSRC), now the Housing and Land Use Regulatory Board (HLURB), under Resolution
No. 123, Series of 1983, dated 4 May 1983;

6. Two (2) Certifications both dated 31 August 1998, issued by Alfredo Tan II,
Director, HLURB, Region IV, stating that the subject parcels of land appear to
be within the Residential cluster Area as specified in Zone VII of Municipal
Zoning Ordinance No. 4, Series of 1982, approved under HSRC Resolution No. 123,
Series of 1983, dated 4 May, 1983

xxxx

By Order of November 6, 2002, the DAR Secretary granted the application for
exemption but issued the following conditions:

1.  The farmer-occupants within subject parcels of land shall be maintained in their
peaceful possession and cultivation of their respective areas of tillage until a final
determination has been made on the amount of disturbance compensation due and
entitlement of such farmer-occupants thereto by the PARAD of Batangas;

2. No development shall be undertaken within the subject parcels of land until the
appropriate disturbance compensation has been paid to the farmer-occupants who are
determined by the PARAD to be entitled thereto.  Proof of payment of disturbance
compensation shall be submitted to this Office within ten (10) days from such payment;
and

3.  The cancellation of the CLOA issued to the farmer-beneficiaries shall be subject of a
separate proceeding before the PARAD of Batangas.

DAMBA-NSFW moved for reconsideration but the DAR Secretary denied the same x x x
x.

xxxx

On DAMBA-NSFW's petition for certiorari, the Court of Appeals, x x x x sustained, by

Decision of December 20, 1994 and Resolution of May 7, 2007, the DAR Secretary's
finding that Roxas & Co. had substantially complied with the prerequisites of DAR AO 6,
Series of 1994.  Hence, DAMBA-NFSW's petition in G.R. No. 167505.

The Court finds no reversible error in the Court of Appeals' assailed issuances,
the orders of the DAR Secretary which it sustained being amply supported by
evidence.[45]  (Emphasis and underscoring in the original.)

In view of this, the Court ordered the cancellation of the CLOAs issued to farmer-
beneficiaries of the nine parcels of land in DAR Administrative Case No. A-9999-008-98
subject of G.R. No. 167505, conditioned, however, on the satisfaction of the
disturbance compensation of said farmer-beneficiaries pursuant to R. A. No. 3844, as
amended[46] and DAR AO No. 6, Series of 1994.[47]

Remarkably, in its application for exemption in DAR ADM Case No. A-9999-014-98
subject of this case, respondent submitted documents in support of its application for
exemption similar to those submitted by it in DAR Administrative Case No. A-9999-008-
98 subject of G.R. No. 167505. And, having established through said documents that
the 27 parcels of land are within the coverage of the said (Nasugbu) Municipal Zoning
Ordinance No. 4, the DAR declared as well that respondent substantially complied with
the requirements of DAR AO No. 6, series of 1994 in DAR ADM Case No. A-9999-014-
98.  The DAR thus granted the application in an Order of the same date and of exactly
the same tenor as that issued in DAR Administrative Case No. A-9999-008-98.

Given this backdrop, we are inclined to uphold the DAR's November 6, 2002 Order
which granted respondent's application for exemption in DAR Administrative Case No.
A-9999-014-98 subject of this case.  Aside from the fact that this Court in Roxas &
Company, Inc. v. DAMBA-NFSW has already upheld the grant of a similar application
which, notably, was supported by the same documents submitted in support of the
application herein, our own review of the records of this case reveals that there was
indeed no error on the part of the DAR in issuing said Order. The documents submitted
by respondent to support its application for exemption as well as the Investigation
Report of CLUPPI-II[48] clearly show that the 27 parcels of land, specifically identified,
were already re-classified as residential prior to the effectivity of the CARL.  "Well-
settled is the rule that findings of fact of x x x quasi-judicial bodies (like the DAR) which
have acquired expertise because their jurisdiction is confined to specific matters, are
generally accorded not only great respect but even finality.  They are binding upon this
Court unless there is a showing of grave abuse of discretion or where it is clearly shown
that they were arrived at arbitrarily or in utter disregard of the evidence on record."[49]

On this ground alone we can already deny the petition. Nonetheless, we shall proceed
to discuss the issues raised by petitioners.

Petitioners resorted to a wrong mode of appeal.

"Section 61[50] of R.A. No. 6657 clearly mandates that judicial review of DAR orders or
decisions are governed by the Rules of Court. The Rules direct that it is Rule 43 that
governs the procedure for judicial review of decisions, orders, or resolutions of the DAR
Secretary."[51]  Hence here, petitioners should have assailed before the CA the
November 6, 2002 and December 12, 2003 Orders of the DAR through a Petition for
Review under Rule 43.  "By pursuing a special civil action for certiorari under Rule 65
rather than the mandatory petition for review under Rule 43, petitioners opted for the
wrong mode of appeal."[52]

Petitioners assert that a certiorari petition is the proper mode since what they
principally questioned before the CA was the jurisdiction of the DAR to take cognizance
of respondent's application for exemption.

We are not persuaded. It bears stressing that it is the law which confers upon the DAR
the jurisdiction over applications for exemption.[53]  And, "[w]hen a court, tribunal or
officer has jurisdiction over the person and the subject matter of the dispute, the
decision on all other questions arising in the case is an exercise of that jurisdiction.
Consequently, all errors committed in the exercise of said jurisdiction are merely errors
of judgment. Under prevailing procedural rules and jurisprudence, errors of judgment
are not proper subjects of a special civil action for certiorari."[54] Besides, petitioners'
basis in claiming that the DAR has no jurisdiction to take cognizance of respondent's
application for exemption is gravely flawed.  The submission of proof of payment of
disturbance compensation is not jurisdictional as to deprive the DAR of the power to act
on an application for exemption. To reiterate, jurisdiction over the subject of a case is
conferred by law.[55]

Also untenable is petitioners' assertion that even assuming that a petition for review
under Rule 43 is the proper remedy, they are still entitled to the writ of certiorari. 
Petitioners posit that an exceptional circumstance in this case calls for the issuance of
the writ, i.e., they stand to lose the land they till without receiving the appropriate
disturbance compensation.  It is well to remind petitioners, however, that the assailed
November 6, 2002 Order of the DAR granting respondent's application for exemption is
subject to the payment of disturbance compensation to the farmer-beneficiaries of the
subject parcels of land.  Hence, petitioners' fear that they will be deprived of the land
they till without payment of disturbance compensation is totally without basis. There
being no substantial wrong or substantial injustice to be prevented here, petitioners
cannot therefore invoke the exception to the general rule that a petition
for certiorari will not lie if an appeal is the proper remedy.

Thus, we are totally in accord with the CA's finding that petitioners resorted to a wrong
remedy.

The fact that respondent had previously

voluntarily offered to sell the subject properties
to the DAR is immaterial in this case.

Indeed, respondent had previously voluntarily offered to sell to the

DAR Hacienda Caylaway, where the properties subject of this case are located. 
However, this offer to sell became irrelevant because respondent was later able to
establish before the DAR that the subject 27 parcels of land were reclassified as non-
agricultural (residential) by virtue of (Nasugbu) Municipal Zoning Ordinance No. 4 prior
to the effectivity of the CARL on June 15, 1988.  "In Natalia Realty, Inc. vs. Department
of Agrarian Reform,[56] it was held that lands not devoted to agricultural activity are
outside the coverage of CARL including lands previously converted to non-agricultural
uses prior to the effectivity of CARL by government agencies other than the DAR."[57] 
This being the case, respondent is not bound by its previous voluntary offer to sell
because the subject properties cannot be the subject of a VOS, they being clearly
beyond the CARP's coverage.

Respondent substantially complied with the

requirements of DAR AO No. 6, Series of 1990.

Indeed, respondent's application for exemption was not accompanied by proof of

disturbance compensation or by petitioners' waiver/undertaking that they will vacate
the subject parcels of land whenever required.  However, this Court finds that
respondent has substantially complied with this requirement found under Section III (B)
of DAR AO No. 6, Series of 1990.

Records show that upon being required by CLUPPI-II to submit proof of payment of
disturbance compensation and/or waiver of rights of bona fide occupants after an
evaluation of its application for exemption revealed that it was not accompanied by the
same,[58] respondent exerted efforts to comply with the said requirement.  It offered to
pay petitioners their disturbance compensation but they failed to agree on the price. 
Petitioners also refused to execute a waiver/ undertaking.  Respondent thus filed a
Petition to fix disturbance compensation before the PARAD.  To prove these, it
submitted to the DAR a (1) Certification dated September 10, 2001, issued by Manuel
J. Limjoco, Jr., MARO of Nasugbu, Batangas, stating that there was failure to reach an
amicable settlement on the matter of disturbance compensation between the parties;
and (2) copy of the Petition to fix disturbance compensation duly received by the
PARAD on September 28, 2001.[59] To us, these constitute substantial compliance with
the said particular requirement of Section III (B), DAR AO No. 6, Series of 2002.  At
any rate, the lack of proof of such payment later proved to be of no consequence since
the assailed November 6, 2002 Order of the DAR was nevertheless made subject to the
condition of payment of disturbance compensation to petitioners. In fact, the Order
likewise states that 10 days from such payment, proof of payment of disturbance
compensation must be submitted to the DAR.

The issues regarding respondent's non-posting of bond

pursuant to Section IV, paragraph 4.5 of DAR AO No. 4,
Series of 2003 and its non-compliance with Section VIII
thereof were belatedly raised.

A careful review of the records reveals that petitioners raised the issues of respondent's
non-posting of bond pursuant to Section IV, paragraph 4.5 of DAR AO No. 4, Series of
2003 and its non-compliance with Section VIII thereof only in their Motion for
Reconsideration of the CA's assailed Decision.  While petitioners themselves alleged
that DAR AO No. 4, Series of 2003 was already in effect during the pendency of their
Motions for Reconsideration before the DAR, there is no showing that they raised these
points therein.  "It is well-settled that no question will be entertained on appeal unless
it has been raised in the proceedings below. Points of law, theories, issues and
arguments not brought to the attention of the lower court, administrative agency or
quasi-judicial body, need not be considered by a reviewing court, as they cannot be
raised for the first time at that late stage.  Basic considerations of fairness and due
process impel this rule.  Any issue raised for the first time on appeal is barred
by estoppel."[60]  Thus, petitioners cannot now be allowed to challenge the assailed
Orders of the DAR on grounds of technicalities belatedly raised as an afterthought.

WHEREFORE, this petition is DENIED. The assailed Decision dated April 29, 2005 and
Resolution dated August 11, 2005 of the Court of Appeals in CA-G.R. SP No. 82709
are AFFIRMED.

[G.R. No. 161796 : February 08, 2012]

LAND BANK OF THE PHILIPPINES, PETITIONER, VS. ESTATE OF J. AMADO

 ARANETA, RESPONDENT.

[G.R. NO. 161830]

DEPARTMENT OF AGRARIAN REFORM,[1] PETITIONER, NORBERTO RESULTA,

EDITHA ABAD, LEDELIA ASIDOY, GIL PAGARAGAN, ROSALITO PAGHUBASAN,
EDWIN FAUSTINO, FELOMINO JUSOL, EDELBERTO POBLARES, EFREN APON,
NELSON VILLAREAL, JIMMY ZONIO, SERLISTO ZONIO, WILFREDO MARCELINO,
ROGELIO RODERO, SERGIO ZONIO, NORBERTO FRANCISCO, AURORA
VILLACORTE, JOVITO NINONUEVO, ELIZABETH ZAUSA, RUBEN VILLANUEVA,
VICENTA RACCA, ROGELIO RACCA, MERCEDES VILLANUEVA, EDUARDO BIUTE,
APOLINARIO TORRAL, BENJAMIN TANJER, JR., MINDA SOLIMAN, CIPRIANO
REQUIOLA, GLORIA ROMERO, SILVERIO ZONIO, NESTOR ZONIO, NILO ZAUSA,
ROMUALDO ZAUSA, REYNALDO ZAUSA, LUMILYN ZAUSA, GILBERT BAUTISTA,
GILDA PACETES, ALUDIA CALUB, LOURDES CAGNO, ABELARDO CAGNO,
BENJAMIN MARINAS, CRISPINA ARNAIZ, MARIA CABUS, RESTITUTA
PRETENCIO, MA. LUZ ABALOS, ABELARDO DEL ROSARIO, CANDELARIA
CEPEDA, HAYDEE MARQUILENCIA, LEONCIA ZATA, LUCIA LOPEZ, MARGARITA
MANLANGIT, CRISTINA PACIS, LEONELDA FIDELA, MA. BLESS MASAGNAY,
AGUSTIN CADAO, DOLORES FELICIANO, MA. JESSICA FELICIANO, MA.
LOURDES FELICIANO, MA. JULITA FELICIANO, FEDERICO ZONIO, NENITA
SINGSON, LIBRADA ZASPA, THELMA ELISERIO, SALVADOR VILLORENTE,
SATURNINA TESORERO, ROGELIO PARACUELES, ANITA MENDOZA, AMADEO
MASAGNAY, ELVIRA CAMPOS, LAURIANO CAMPOS, BENITO VILLAGANAS,
VIRGILIO FERRER, SALVADOR RESULTA, NORLITO RESULTA, DIANA SEPTIMO,
SALVADOR SEPTIMO, DIOSDADO LAGMAN, CLAUDIA MIRALLES, RICARDO
FRANCISCO, RODOLFO FRANCISCO, ALEXANDER YURONG, ALFREDO
BUENAVENTURA, ISIDRO DELA CRUZ, REMEDIOS CABUNDOC, ARTEMIO
MIRASOL, MINDA COPINO, ANDRES IBARBIA, WILFREDO BALLOS, ELSA
BANGCA, ARTURO CANTURIA, PABLITO SAGUIBO, CARLITO VILLONES,
JOSEFINA TABANGCURA, NEDA MASAGNAY, PETITIONERS-INTERVENORS,
ESTELA MARIE MALOLOS, LORETO DELA CRUZ, JOSE PAJARILLO, IMELDA
ZAUSA, FEDERICO ZAUSA REPRESENTED BY ROSALINDA ZAUSA, LUDEVICO
ZAUSA, GLORIA VILLANUEVA, ZENAIDA MASAGNAY, ELSIO ESTO, RODOLFO
VILLONES, ALVINO NARCI REPRESENTED BY LILIA VILLONES, RUFINO ZONIO,
ALBERTO ROSI, ZENAIDA VILLENA, ANTONIO ZAUSA, SALDITO ZONIO,
ZACARIAS CORTEZ, LARRY MASAGNAY REPRESENTED BY LEONEL MASAGNAY,
ERLINDA MORISON, JUAN CORTEZ, PRIMITIBO NICASIO, CARMELO CESAR,
ANDRES ZONIO REPRESENTED BY RUFINO ZONIO, JUANITO ZONIO, JERENCIO
ZONIO, ALEX CORTEZ, PEPITO VILLAREAL, PETITIONERS-MOVANTS, VS.
ESTATE OF J. AMADO ARANETA, RESPONDENT.

[G.R. NO. 190456]

ERNESTO B. DURAN, LOPE P. ABALOS (DECEASED) REPRESENTED BY LOPE

ABALOS, JR., ARTEMIO T. GONZALES (DECEASED) REPRESENTED BY PAUL
GONZALES, AUGUSTO LIM, IMELDA MARCELINO, ERNESTO NAVARTE
(DECEASED) REPRESENTED BY SURVIVING SPOUSE NELIA NAVARTE,
FLORANTE M. QUIMZON, MANUEL R. QUIMZON (DECEASED) REPRESENTED BY
FLORANTE M. QUIMZON, NELIA ZAUSA, PETITIONERS-INTERVENORS, VS.
 ESTATE OF J. AMADO ARANETA, RESPONDENT.

DECISION

VELASCO JR., J.:

In these three petitions for review under Rule 45, petitioners Land Bank of the
Philippines (Land Bank), Department of Agrarian Reform (DAR), and Ernesto B. Duran,
et al.  (Duran, et al.) separately assail and seek to nullify the Decision[2] of the Court of
Appeals (CA) dated September 19, 2003 in CA-G.R. SP No. 65822 that set aside the
February 7, 2001 Decision of the DAR Adjudication Board (DARAB) in DARAB Case No.
4176.  Likewise sought to be annulled is the Resolution of the CA dated January 22,
2004[3] that denied separate motions for reconsideration of the September 19, 2003
Decision.cralaw

The reversed DARAB decision upheld the agrarian reform coverage of 1,266 hectares of
respondent estate's 1,644.55-hectare property and its award to over a thousand
farmer-beneficiaries. The CA's reversing decision, on the other hand, is hinged on the
illegality of the coverage and the consequent award. According to the CA, the property
in question, having meanwhile ceased to be agricultural, is not amenable to land reform
coverage and, hence, falls outside of DAR's jurisdiction to implement agrarian
enactments.

In G.R. No. 161796, petitioner Land Bank faults the CA insofar as it accorded
retroactive exclusionary application to Presidential Proclamation No. (Proclamation)
1283,[4] as amended by Proclamation 1637.[5] In so doing, so Land Bank claims, the
appellate court effectively but illegally extended exempt-coverage status to the subject
land and in the process negated  the purpose behind Presidential Decree No. (PD) 27:
to emancipate rice/corn land tenant-farmers from the bondage of the soil under their
tillage.

Pursuing cognate arguments, petitioner DAR, in G.R. No. 161830, assails the CA's
holding, and the premises tying it together, on the department's jurisdiction over the
property subject of the case.

In G.R. No. 190456, petitioners Duran, et al. take issue at the CA's pronouncement on
the validity of service of the petition for review effected by respondent upon their long-
deceased counsel of record, Atty. Eduardo Soliven Lara (Atty. Lara).[6]  Like Land Bank
and DAR, Duran, et al. impute reversible error on the CA for holding that the concerned
farmer-beneficiaries never acquired ownership over their respective portions subject of
the DAR award, owing to the prior conversion of the whole property to non-agricultural
uses before the completion of the land reform process.

Per its Resolution of June 28, 2004, the Court ordered the consolidation of G.R. Nos.
161796 and 161830 with G.R. No. 163174 (Nell-Armin Raralio v. Estate of J. Amado
Araneta).   Another Resolution issued on November 17, 2010 directed that G.R. No.
190456 be consolidated with G.R. Nos. 161796, 161830 and 163174.

Due, however, to the denial, per Resolution of August 18, 2004, of the petition in G.R.
No. 163174 and pursuant to entry of judgment dated December 9, 2004, the Court, by
Resolution dated July 11, 2011, deconsolidated G.R. No. 163174 with the other three
cases and considered it closed and terminated.[7]

The Facts

At the heart of the controversy is a large tract of land, denominated as Lot No. 23 of
the Montalban Cadastre (Lot 23), located in Brgy. Mascap, Montalban, Rizal with an
area of 1,645 hectares, more or less.  Lot 23 was originally registered in the name of
Alfonso Doronilla (Doronilla) under Original Certificate of Title (OCT) No. 7924 of the
Rizal Registry.

On June 21, 1974, then President Marcos issued Proclamation 1283, carving out a wide
expanse from the Watershed Reservation in Antipolo, Rizal and reserving the
segregated area for townsite purposes, "subject to private rights, if any there be

." In its pertinent parts, Proclamation 1283 reads:

"Excluding from the Operation of Executive Order No. 33 dated July 26, 1904, as
Amended by Executive Orders Nos. 14 and 16, Both Series of 1915, which Established
the Watershed Reservation Situated in the Municipality of Antipolo, Province of Rizal,
Island of Luzon, a Certain Portion of the Land Embraced therein and Reserving the
Same, Together with the Adjacent Parcel of Land of the Public Domain, for Townsite
Purposes Under the Provisions of Chapter XI of the Public Land Act"

Upon recommendation of the Secretary of Agriculture and Natural Resources x x x, I,

FERDINAND E. MARCOS, President of the Philippines, do hereby exclude from the
operation of Executive Order No. 33 dated July 26, 1904, as amended x x x, which
established the Watershed Reservation situated in the Municipality of Antipolo, Province
of Rizal, Island of Luzon, certain portions of land embraced therein and reserve the
same, together with the adjacent parcel of land of the public domain, for townsite
purposes under the provisions of Chapter XI of the Public Land Act, subject to private
rights, if any there be, and to future subdivision survey in accordance with the
development plan to be prepared and approved by the Department of Local
Government and Community Development, which parcels are more particularly
described as follows:

Lot A (Part of Watershed Reservation)

A parcel of land (Lot A of Proposed Poor Man's Baguio, being a portion of the Marikina
Watershed, IN-2), situated in the municipality of Antipolo, Province of Rizal, Island of
Luzon x x x;

[technical description omitted]

Containing an area of THREE THOUSAND SEVEN HUNDRED EIGHTY (3,780) Hectares,

more or less.

Lot B (Alienable and Disposable Land)

A parcel of land (Lot B of Proposed Poor Man's Baguio, being a portion of alienable and
disposable portion of public domain) situated in the municipality of Antipolo, Province of
Rizal x x x;

[technical description omitted]

Containing an area of ONE THOUSAND TWO HUNDRED TWENTY FIVE (1,225) Hectares,
more or less. (Emphasis supplied.)

Then came the amendatory issuance, Proclamation 1637 dated April 18, 1977, thereby
increasing the size of the reservation, designated as "Lungsod Silangan Townsite" (LS
Townsite), by 20.312 hectares and revising its technical description so as to include,
within its coverage, other lands in the municipalities of San Mateo and Montalban, Rizal
to absorb "the population overspill in Greater Manila Area," but again "subject to
private rights, if any there be," thus:

Upon recommendation of the Secretary of Natural Resources x x x, I, FERDINAND E.

MARCOS, President of the Philippines, do hereby amend Proclamation No. 1283, dated
June 21, 1974 which established the townsite reservation in the municipalities of
Antipolo and San Mateo, Province of Rizal, Island of Luzon, by increasing the area and
revising the technical descriptions of the land embraced therein, subject to private
rights, if any there be, which parcel of land is more particularly described as follows:

(Proposed Lungsod Silangan Townsite)

A PARCEL OF LAND (Proposed Lungsod Silangan Townsite Reservation amending the

area under SWO-41762 establishing the Bagong Silangan Townsite Reservation)
situated in the Municipalities of Antipolo, San Mateo, and Montalban, Province of Rizal,
Island of Luzon. Bounded on the E., along lines x x x.

Beginning at a point marked "1" on the Topographic Maps with the Scale of 1:50,000
which is the identical corner 38 IN-12, Marikina Watershed Reservation.

[technical description omitted]

Containting an area of TWENTY THOUSAND THREE HUNDRED TWELVE (20,312)

hectares, more or less.

NOTE: all data are approximate and subject to change based on future survey.
(Emphasis supplied.)

On November 9, 1977, Letter of Instructions No. (LOI) 625 addressed to several

agencies was issued for the implementation of the aforementioned proclamations.  The
Office of the Solicitor General (OSG), in particular, was directed to initiate
condemnation proceedings for the acquisition of private lands within the new townsite,
among which was Lot 23 (the Doronilla property).

Prior to the issuance of the LS Townsite proclamations, the following events transpired:

(1) On October 21, 1972, PD 27 (Tenant's Emancipation Decree) was issued. In

accordance with PD 27 in relation to LOI 474 and related issuances, the DAR undertook
to place under the Operation Land Transfer (OLT) program of the government all
tenanted rice/corn lands with areas of seven hectares or less belonging to landowners
who own other agricultural lands of more than seven (7) hectares.  In line with this
program, the tenants of Doronilla tilling portions of his property, who claimed their
primary crops to be rice and/or corn, organized themselves into farmers' cooperatives
or  Samahang Nayons and applied for certificates of land transfer (CLTs); and

(2) The DAR, to which the processed applications were forwarded, processed 106
CLTs involving 100 tenants-beneficiaries covering 73 hectares out of the total
1,645 hectares of Lot 23.  However, out of the 106 CLTs generated, only 75 CLTs had
actually been distributed.

Upon the issuance of Proclamation 1637 on April 18, 1977, on-going parcellary
mapping, survey and other processing activities related to the Doronilla property were
stopped.[8]

In 1978, the OSG, conformably with the directive embodied in LOI 625, filed with the
then Court of First Instance (CFI) of Rizal an expropriation complaint against the
Doronilla property.  Meanwhile, on June 6, 1979, Doronilla issued a Certification,[9] copy
furnished the Agrarian Reform Office, among other agencies, listing seventy-nine (79)
"bona fide planters" he allegedly permitted to occupy a portion of his land.  On
September 9, 1987 or nine (9) years after it commenced expropriation proceedings, the
OSG moved[10] for and secured, per the Rizal CFI Order[11] dated September 18, 1987,
the dismissal of the expropriation case.

Earlier, or on March 15, 1983, J. Amado Araneta, now deceased, acquired ownership of
the subject Doronilla property by virtue of court litigation. A little over a week later, he
had OCT No. 7924 canceled and secured the issuance of Transfer Certificate of Title
(TCT) No. N-70860 in his name.

On July 22, 1987, then President Corazon C. Aquino issued Proclamation No. 131
instituting the Comprehensive Agrarian Reform Program (CARP).  Thereafter, then DAR
Undersecretary Jose C. Medina, in a memorandum of March 10, 1988, ordered the
Regional Director of DAR Region IV to proceed with the OLT coverage and final survey
of the Doronilla property.[12]  Republic Act No. (RA) 6657, otherwise known as
the Comprehensive Agrarian Reform Law (CARL)[13] of 1988, was then enacted, and
took effect on June 15, 1988.

On July 27, 1989, Jorge L. Araneta, as heir of J. Amado Araneta and administrator of
his estate, wrote the DAR Secretary requesting approval, for reasons stated in the
covering letter, of the conversion of Lot 23 from agricultural to commercial, industrial
and other non-agricultural uses.[14]  Appended to the letter were maps, location
clearance and other relevant documents. Through Jorge L. Araneta, respondent Estate
of J. Amado Araneta (Araneta or Araneta Estate) would, however, reiterate the
conversion request owing to what it viewed as DAR's inaction on said request.

On December 12, 1989, DAR issued a "Notice of Acquisition" addressed to Doronilla,

covering 7.53 hectares of the land now covered by TCT No. 216746 and offering
compensation at a valuation stated in the notice.[15]  Alarmed by the turn of events
whereby DAR was having its property, or a portion of it, surveyed, incidental to
effecting compulsory land acquisition, the Araneta Estate addressed a letter[16] to DAR
dated June 27, 1990, formally protesting the series of land surveys being conducted by
the Bureau of Lands on what is now its property.  It claimed that the CARL does not
cover the said property, being part of the LS Townsite reservation, apart from being
mountainous, with a slope of more than 70 degrees and containing commercial
quantities of marble deposit.  The Araneta Estate followed its protest letter with two (2)
more letters dated June 20, 1990 and May 28, 1991, in which it reiterated its request
for conversion, citing, for the purpose, Department of Justice (DOJ) Opinion No. 181,
Series of 1990.[17]

On November 29, 1991, the Office of the Provincial Adjudication Board of Rizal set a
hearing to determine the just compensation for the subject property, docketed as P.A.
Case No. IV-Ri-0024-91. Notwithstanding Araneta's protest against the compulsory
agrarian reform coverage and acquisition of the property in question, the Land Bank,
nonetheless, proceeded to approve, on January 21, 1992, the land transfer claim
(Claim No. EO-91-1266) covering 1,266 hectares. On February 26, 1992, Land Bank
notified Araneta of its entitlement, upon its compliance with certain requirements, of
the amount of PhP 3,324,412.05, representing just compensation for its covered
parcels of land.[18]

By September 25, 1990, some 1,200 emancipation patents (EPs) had been generated
in favor of 912 farmer-beneficiaries and TCTs derived from the EPs issued.[19]

It is upon the foregoing backdrop of events that Araneta, sometime in April 1992, filed
with the DARAB an action against the DAR and Land Bank for Cancellation of
Compulsory Coverage under PD 27 and Exemption from CARL Coverage of the erstwhile
Doronilla property, docketed as DARAB Case No. DCN-JC-RIV-R12-026-CO.[20] 
Thereafter, DARAB turned over the case folder to the Rizal Provincial Agrarian Reform
Adjudicator (PARAD) where the matter was re-docketed as PARAD Case No. IV-Ri-
0057-92.  Before the Rizal PARAD Office and with its leave, some 1,022 individuals
affiliated with different farmer groups intervened and filed an answer-in- intervention,
[21]
 joining a group of earlier intervenors led by one Anastacia Ferrer claiming to be EP
grantees.

Save for Land Bank, all the parties subsequently submitted their respective position
papers.

Ruling of the Regional Adjudicator 

By Decision dated October 17, 1994,[22] Regional Agrarian Reform Adjudicator (RARAD)

Fe Arche-Manalang ruled against Araneta, denying its bid to have its property excluded
from OLT coverage and/or the compulsory scheme under CARL.  The fallo of the
RARAD's Decision reads as follows:

WHEREFORE, premises considered, judgment is hereby rendered:

1. Dismissing the petition for lack of merit;

2. Upholding the OLT coverage of the property described in Paragraph 1 of the Petition,
pursuant to the provision of P.D. 27 as affirmed by E.O. 228 in relation to Section 7 of
R.A. 6657;
3. Affirming the regularity of the OLT processing undertaken on the subject Property
and sustaining the validity of the Transfer Certificates of Title emanating from the
Emancipation Patents generated in favor of the Intervenors-awardees;

4. Directing the Respondent Land Bank of the Philippines to effect and release
immediate payment to the Petitioner-Landowner under approved Land Transfer Claim
No. EO-91-1266 dated February 3, 1992; and

5. Without pronouncement as to costs.

SO ORDERED.

Therefrom, Araneta appealed to the DARAB proper. The appeal was docketed as DARAB
Case No. 4176.  In due time, the DARAB, following the RARAD's line that the
intervenor-appellees were deemed owners of the land they tilled as of October 21,
1972, rendered a Decision dated February 7, 2001[23] affirming in toto that of the
RARAD's,  disposing as follows:

WHEREFORE, premises considered, this Board hereby AFFIRMS the appealed decision in
toto without pronouncement as to costs.

SO ORDERED.

Just like that of the RARAD, the DARAB ruling did not name individuals in whose favor
the EPs were specifically generated, albeit, 86 were, per Our count, impleaded as
"intervenor-appellees" in DARAB Case No. 4176.

Subsequently, Araneta went to the CA via a petition for review under Rule 43 of the
1997 Rules of Civil Procedure on the stated principal issue of whether or not the DARAB
in its appealed decision unduly expanded the scope of coverage of PD 27.

Ruling of the CA

By Decision of September 19, 2003, the CA, as earlier stated, set aside the Decision of
the DARAB, in effect nullifying all the individual farm lots awards thus made by the
DARAB ostensibly in favor of the named  intervenor-appellees and necessarily all other
unnamed awardees. The decretal portion of the CA decision reads as follows:

WHEREFORE, premises considered, the present petition is hereby GIVEN DUE COURSE.
The challenged Decision of the DARAB in DARAB Case No. 4176 (Reg. Case No. IV-RI-
0057-92) is hereby ANNULLED and SET ASIDE.  The DARAB is hereby ordered to
reconvey to petitioner [Araneta] the subject portions of petitioner's property embraced
in TCT No. N-70860, earlier awarded to intervenors-appellees under their individual EPs
now covered by their respective certificates of title, in accordance with pertinent
administrative issuances of DARAB.

No pronouncement as to costs.

SO ORDERED.
In the main, the CA predicated its reversal action on the interplay of the ensuing
premises, juxtaposed with the pertinent pronouncements in the cited cases of Natalia
Realty, Inc. v. DAR[24] and Paris v. Alfeche,[25] among other landmark agrarian cases,
thus:

(1) Agricultural lands found within the boundaries of declared townsite reservations are
reclassified for residential use. They ceased to be agricultural lands upon approval of
their inclusion in the reservation, as in the case of agricultural lands situated within the
LS Townsite reservation upon its establishment pursuant to Proclamation 1637.

(2) The processing of the OLT coverage of the Doronilla property was not completed
prior to the passage of CARL or RA 6657; hence, the governing law should be RA 6657,
with PD 27 and Executive Order No. (EO) 228[26] only having suppletory effect.

(3) Full payment of the cost of the land, inclusive of interest, is in every case
considered a mandatory requirement prior to the transfer of the title to the farmer-
beneficiary.  Before that time, the term "subject to private rights, if any" found in
Proclamation 1637 refers to the landowner's private rights.  At the time Proclamation
1637 was issued, the farmer-beneficiaries of the Doronilla property have no "vested
rights" yet under PD 27 to their allotted lot, as erroneously ruled by the DARAB.

(4) The DARAB, as the adjudicating arm of DAR, was divested of jurisdiction over the
Araneta property upon its inclusion in the LS Townsite reservation by virtue of
Proclamation 1637, as can be gleaned from LOI 625 which directed the implementation
of Proclamation 1637.

From the foregoing decision, Land Bank, DAR/DARAB and Araneta separately moved for
but were denied reconsideration by the appellate court in its Resolution of January 22,
2004.

In due time, Land Bank and DARAB/DAR interposed before the Court separate petitions
for review.

On the other hand, in December 2009, or some six (6) years after the CA rendered its
appealed judgment, Duran and eight others, as self-styled petitioners-intervenors,
came to this Court on a petition for review under Rule 45.  In a bid to justify the six-
year hiatus between the two events, Duran, et al. claimed that, through the
machinations of Araneta's counsel, they have been virtually kept in the dark about CA-
G.R. SP No. 65822 and consequently were deprived of their right to appeal what turned
out to be an adverse CA ruling. How the supposed deprivation came about, per Duran,
et al.'s version, shall be explained shortly. Duran, et al. presently allege being EP
holders over portions of the property in question, their rights to the patents having
been decreed in the October 17, 1994 RARAD Decision, as affirmed by the DARAB.

The Issues

Apart from what it considers the appellate court's misapplication of the holdings
in Natalia Realty, Inc.  and Paris, Land Bank, in G.R. No. 161796,[27] ascribes to the CA
the commission of serious errors of law:
1) When it gave retroactive effect or application to Proclamation Nos. 1283 & 1637 resulting
in the negation of "full land ownership to qualified farmer-beneficiaries covered by P.D.
No. 27 x x x."
2) When it gave imprimatur to the virtual conversion through Proclamation Nos. 1283 & 1637
of erstwhile agricultural lands to residential use without the requisite
expropriation/condemnation proceedings pursuant to LOI No. 625.
3) When it upheld the nullification of the CLTs and EPs in the name of farmer-beneficiaries
through a mere collateral attack which is not allowed by law.
4) When it recognized respondent's alleged private right which had been reduced into a mere
claim for just compensation upon promulgation or effectivity of P.D. No. 27 on October 21,
1972.

In G.R. No. 161830,[28] the DAR raises the following issues:

1) Whether the subject agricultural landholding is exempt from CARP coverage, being non-
agricultural, pursuant to Proclamation Nos. 1283, as amended, over and above the statutory
emancipation of the tenants from the bondage of the soil under P.D. No. 27;
2) Whether or not DAR was no longer possessed of jurisdiction over respondent Araneta's
landholding after the same was included in the LS Townsite; and
3) Whether or not DAR should reconvey to Araneta the portion of its property that was
subjected to OLT under P.D.  27.

Aside from the procedural concerns articulated in their petition, the main substantive
issue raised by Duran, et al. in G.R. No. 190456,[29] as outlined at the outset, revolves
around the question, and its implication on their ownership rights over a portion of the
subject estate, of whether or not the process of land reform was incomplete at the time
of issuance of Proclamation 1637.

The different but oftentimes overlapping issues tendered in this consolidated recourse
boil down to this relatively simple but pregnant question: whether or not the Doronilla,
now the Araneta, property, in light of the issuance of the land reclassifying
Proclamation 1283, as amended, is, as held by the CA, entirely outside the ambit of PD
27 and RA 6657, and, thus, excluded from compulsory agrarian reform coverage,
unfettered by the private claim of the farmer-beneficiaries.

The Court's Ruling

We find the petitions partly meritorious.

Classification of the Doronilla Property    

Several basic premises should be made clear at the outset.  Immediately prior to the
promulgation of PD 27 in October 1972, the 1,645-hectare Doronilla property, or a
large portion of it, was indisputably agricultural, some parts devoted to rice and/or corn
production tilled by Doronilla's tenants. Doronilla, in fact, provided concerned
government agencies with a list of seventy-nine (79)[30] names he considered  bona
fide "planters" of his land. These planters, who may reasonably be considered tenant-
farmers, had purposely, so it seems, organized themselves into Samahang Nayon(s) so
that the DAR could start processing their applications under the PD 27 OLT program.
CLTs were eventually generated covering 73 hectares, with about 75 CLTs actually
distributed to the tenant-beneficiaries.  However, upon the issuance of Proclamation
1637, "all activities related to the OLT were stopped."[31]

The discontinuance of the OLT processing was obviously DAR's way of acknowledging
the implication of the townsite proclamation on the agricultural classification of the
Doronilla property. It ought to be emphasized, as a general proposition, however, that
the former agricultural lands of Doronilla--situated as they were within areas duly set
aside for townsite purposes, by virtue particularly of Proclamation 1637--were
converted for residential use. By the terms of  Natalia Realty, Inc., they would be
exempt from land reform and, by necessarily corollary, beyond DAR's or DARAB's
jurisdictional reach.   Excerpts from Natalia Realty, Inc.:

We now determine whether such lands are covered by the CARL.  Section 4 of R.A.
6657 provides that the CARL shall "cover, regardless of tenurial arrangement and
commodity produced, all public and private agricultural lands."  As to what constitutes
"agricultural land," it is referred to as "land devoted to agricultural activity as defined in
this Act and not classified as mineral, forest, residential, commercial or industrial land." 
The deliberations of the Constitutional Commission confirm this limitation. "Agricultural
lands" are only those lands which are "arable and suitable agricultural lands" and "do
not include commercial, industrial and residential lands."

Based on the foregoing, it is clear that the undeveloped portions of the Antipolo Hills
Subdivison cannot in any language be considered as `agricultural lands.' These lots
were intended for residential use.  They ceased to be agricultural lands upon
approval of their inclusion in the Lungsod Silangan Reservation. x x x

xxxx

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.[32] (Emphasis added;
italics in the original.)

Guided by the foregoing doctrinal pronouncement, the key date to reckon, as a

preliminary matter, is the precise time when Doronilla's Lot 23, now Araneta's property,
ceased to be agricultural. This is the same crucial cut-off date for considering the
existence of "private rights" of farmers, if any, to the property in question.  This, in
turn, means the date when Proclamation 1637 establishing LS Townsite was issued:
April 18, 1977.  From then on, the entire Lot 23 was, for all intents and purposes,
considered residential, exempted ordinarily from land reform, albeit parts of the lot may
still be actually suitable for agricultural purposes.  Both the Natalia lands, as
determined in Natalia Realty, Inc., and the Doronilla property are situated within the
same area covered by Proclamation 1637; thus, the principles regarding the
classification of the land within the Townsite stated in Natalia Realty, Inc. apply mutatis
mutandis to the instant case.

Applicability of PD 27, RA 6657

and Proclamation 1637 to the Doronilla Estate
From the standpoint of agrarian reform, PD 27, being in context the earliest issuance,
governed at the start the disposition of the rice-and-corn land portions of the Doronilla
property.  And true enough, the DAR began processing land transfers through the OLT
program under PD 27 and thereafter issued the corresponding CLTs.  However, when
Proclamation 1637 went into effect, DAR discontinued with the OLT processing.  The
tenants of Doronilla during that time desisted from questioning the halt in the issuance
of the CLTs.  It is fairly evident that DAR noted the effect of the issuance of
Proclamation 1637 on the subject land and decided not to pursue its original operation,
recognizing the change of classification of the property from agricultural to residential.

When it took effect on June 15, 1988, RA 6657 became the prevailing agrarian reform
law.  This is not to say, however, that its coming into effect necessarily impeded the
operation of PD 27, which, to repeat, covers only rice and corn land.   Far from it, for
RA 6657, which identifies "rice and corn land" under PD 27 as among the properties the
DAR shall acquire and distribute to the landless,[33] no less provides that PD 27 shall be
of suppletory application.  We stated in Land Bank of the Philippines v. Court of
Appeals, "We cannot see why Sec. 18 of R.A. 6657 should not apply to rice and corn
lands under P.D. 27. Section 75 of R.A. 6657 clearly states that the provisions of P.D.
27 and E.O. 228 shall only have a suppletory effect."[34]

All told, the primary governing agrarian law with regard to agricultural lands, be they of
private or public ownership and regardless of tenurial arrangement and crops produced,
is now RA 6657.  Section 3(c) of RA 6657 defines "agricultural lands" as "lands
devoted to agricultural activity as defined in the Act and not classified as
mineral, forest, residential, commercial or industrial land."  The DAR itself refers
to "agricultural lands" as:

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.[35]

At the time of the effectivity of RA 6657 on June 15, 1998, the process of agrarian
reform on the Doronilla property was, however, to reiterate, far from complete.  In fact,
the DAR sent out a Notice of Acquisition to Araneta only on December 12, 1989, after
the lapse of around 12 years following its discontinuance of all activities incident to the
OLT.

Proclamation 1637, a martial law and legislative-powers issuance, partakes the nature
of a law.  In Natalia Realty, Inc., the Court in fact considered and categorically declared
Proclamation 1637 a special law, since it referred specifically to the LS Townsite
Reservation.[36]  As such, Proclamation 1637 enjoys, so  Natalia Realty, Inc.  intones,
applying basic tenets of statutory construction, primacy over general laws, like RA
6657.

In light of the foregoing legal framework, the question that comes to the fore is
whether or not the OLT coverage of the Doronilla property after June 15, 1988, ordered
by DAR pursuant to the provisions of PD 27 and RA 6657, was still valid, given the
classificatory effect of the townsite proclamation.

To restate a basic postulate, the provisions of RA 6657 apply only to agricultural lands
under which category the Doronilla property, during the period material, no longer falls,
having been effectively classified as residential by force of Proclamation 1637.  It
ceased, following Natalia Realty, Inc., to be agricultural land upon approval of its
inclusion in the LS Townsite Reservation pursuant to the said reclassifying presidential
issuance. In this regard, the Court cites with approval the following excerpts from the
appealed CA decision:

The above [Natalia Realty, Inc.] ruling was reiterated in National Housing
Authority vs. Allarde where the Supreme Court held that lands reserved for,
converted to, non-agricultural uses by government agencies other than the
[DAR], prior to the effectivity of [RA] 6657 x x x are not considered and
treated as agricultural lands and therefore, outside the ambit of said law. The
High Court declared that since the Tala Estate as early as April 26, 1971 was reserved,
inter alia, under Presidential Proclamation No. 843, for the housing program of the
[NHA], the same has been categorized as not being devoted to agricultural activity
contemplated by Section 3(c) of R.A. No. 6657, and therefore outside the coverage of
CARL.[37] (Emphasis supplied.)

"Private Rights" and Just Compensation as Payment 

Unlike in Natalia Realty, Inc., however, where pre-existing tenancy arrangement over
the Natalia land, among other crucial considerations, was not part of the equation, this
case involves farmers claiming before April 18, 1979 to be actual tenants of the rice
and/or corn portion of the Doronilla property. The Court has, to be sure, taken stock of
the fact that PD 27 ordains the emancipation of tenants and "deems" them owners of
the rice and corn lands they till as of October 21, 1972.  The following provisions of the
decree have concretized this emancipation and ownership policy:

This [decree] shall apply to tenant farmers of private agricultural lands primarily
devoted to rice and corn under a system of sharecrop or lease-tenancy, whether
classified as landed estate or not;

The tenant farmer x x x shall be deemed owner of a portion constituting a family-size

farm of five (5) hectares if not irrigated and three (3) hectares if irrigated. (Emphasis
added.)

Complementing PD 27 is EO 228, Series of 1987, Sec. 1 of which states, "All qualified

farmer beneficiaries are now deemed full owners as of October 21, 1972 of the land
they acquired by virtue of Presidential Decree No. 27." (Emphasis supplied.)

Petitioners DAR, Land Bank and Duran, et al. uniformly maintain that the PD 27 tenant-
beneficiaries have acquired "vested rights" over the lands they tilled as of October 21,
1972 when the decree took effect.  Pursuing this point, they argue that, as of that date,
the farmer-beneficiaries were "deemed owners" of what was to be Araneta's property,
and the issuance of Proclamation 1637 did not alter the legal situation.
The CA, however, was of a different mind, predicating its stance on the following:

Since actual title remained with the landowner Alfonso Doronilla at the time Presidential
Proclamation No. 1637 was issued in 1977, it follows that it is the "private rights" of
such owner which are contemplated by the exemption declared in said
proclamation.  Definitely, the proviso "subject to private rights" could not refer to the
farmer-tenants the process of land reform having just been commenced with the filing
of their application with the DAR.  The conclusion finds support in a similar proclamation
covering the Baguio Townsite Reservation.  Our Supreme Court in a case involving an
application for registration of lots situated within the Baguio Townsite Reservation cited
the decision dated November 13, 1922 of the Land Registration Court in Civil
Reservation No. 1, GLRO Record No. 211, which held that all lands within the Baguio
Townsite are public land with the exception of (1) lands reserved for specific public uses
and (2) lands claimed and adjudicated as private property.  It is therefore in that sense
that the term "private rights" under the subject proviso in Presidential Proclamation No.
1637 must be understood.[38] x x x (Emphasis added.)

In fine, the CA held that the "private rights" referred to in the proclamation pertained to
the rights of the registered owner of the property in question, meaning Doronilla or
Araneta, as the case may be.

The Court cannot lend full concurrence to the above holding of the appellate court and
the consequent wholesale nullification of the awards made by the DARAB.

The facts show that several farmer-beneficiaries received 75 CLTs prior to the issuance
of Proclamation 1637 on June 21, 1974. The 75 CLTs seemingly represent the first
batch of certificates of bona fide planting rice and corn. These certificates were
processed pursuant to the OLT program under PD 27. It bears to stress, however, that
the mere issuance of the CLT does not vest on the recipient-farmer-tenant ownership of
the lot described in it. At best, the certificate, in the phraseology of Vinzons-Magana v.
Estrella,[39] "merely evidences the government's recognition of the grantee as the party
qualified to avail of the statutory mechanisms for the acquisition of ownership of the
land [tilled] by him as provided under [PD] 27."

The clause "now deemed full owners as of October 21, 1972" could not be pure
rhetoric, without any beneficial effect whatsoever descending on the actual tillers of rice
and/or corn lands, as the appealed decision seems to convey. To Us, the clause in
context means that, with respect to the parcel of agricultural land covered by PD 27
and which is under his or her tillage, the farmer-beneficiary ipso facto acquires, by
weight of that decree, ownership rights over it. That ownership right may perhaps not
be irrevocable and permanent, nay vested, until the tenant-farmer shall have complied
with the amortization payments on the cost of the land and other requirements exacted
in the circular promulgated to implement PD 27. Vinzons-Magana  holds:

This Court has therefore clarified that it is only compliance with the prescribed
conditions which entitled the farmer/grantee to an emancipation patent by which he
acquires the vested right of absolute ownership in the landholding--a right which has
become fixed and established and is no longer open to doubt and controversy.[40] x x x
Said ownership right is, nonetheless, a statutory right to be respected.

Plainly enough then, the farmer-beneficiaries vis-à-vis the PD 27 parcel they till,
especially that brought within the coverage of OLT under PD 27, own in a sense the lot
which they can validly set up against the original owners notwithstanding the fact that
the latter have not yet been paid by Land Bank and/or even if the farmers have not yet
fully paid their amortization obligation to the Land Bank, if that be the case.  After all,
the former landowners, by force of PD 27, is already divested of their ownership of the
covered lot, their right to payment of just compensation or of the un-amortized portion
payable by Land Bank[41] being assured under EO 228 and RA 6657.

If only to stress, while the PD 27 tenant-farmers are considered the owners by virtue of
that decree, they cannot yet exercise all the attributes inherent in ownership, such as
selling the lot, because, with respect to the government represented by DAR and LBP,
they have in the meantime only inchoate rights in the lot--the being "amortizing
owners."  This is because they must still pay all the amortizations over the lot to Land
Bank before an EP is issued to them. Then and only then do they acquire, in the
phraseology of Vinzons-Magana, "the vested right of absolute ownership in the
landholding."

This brings us to the question, to whom does "private rights" referred to in

Proclamation 1637 pertain? Absent any agrarian relationship involving the tract of lands
covered by the proclamation, We can categorically state that the reference is to the
private rights of the registered lot owner, in this case Doronilla and subsequently,
Araneta.  But then the reality on the ground was that the Araneta property or at least a
portion was placed under OLT pursuant to PD 27 and subject to compulsory acquisition
by DAR prior to the issuance of Proclamation 1637 on June 21, 1974, and 75 CLTs were
also issued to the farmer-beneficiaries. Stated a bit differently, before Proclamation
1637 came to be, there were already PD 27 tenant-farmers in said property.   In a very
real sense, the "private rights" belong to these tenant-farmers.  Since the said farmer-
beneficiaries were deemed owners of the agricultural land awarded to them as of
October 21, 1972 under PD 27 and subsequently deemed full owners under EO 228,
the logical conclusion is clear and simple: the township reservation established under
Proclamation 1637 must yield and recognize the "deemed ownership rights" bestowed
on the farmer-beneficiaries under PD 27. Another way of looking at the situation is that
these farmer-beneficiaries are subrogated in the place of Doronilla and eventual
transferee Araneta.

To Us, the private rights referred to in Proclamation 1637 means those of the farmer-
beneficiaries who were issued the 75 CLTs.  As to them, farm lots are EXCLUDED from
the coverage of Proclamation 1637 and are governed by PD 27 and subsequently RA
6657.

With respect to the 912 farmer-beneficiaries who were issued around 1,200
EPs as a result of the DAR Notice of Acquisition dated December 12, 1989, We
are constrained to affirm the CA ruling invalidating the individual lot awarded to them.
Obviously, they are not rice/corn land tenant-farmers contemplated in PD 27. They do
not possess the rights flowing from the phrase "deemed owner as of October 21, 1972."
In this regard, the Court notes only too distinctly that Doronilla no less only named
some 79 individuals as coming close to being legitimate PD 27 tenant-farmers of Lot
23.  We reiterate the ensuing pronouncement in Natalia Realty, Inc., as cited by the CA,
that agricultural lands reclassified as a residential land are outside the ambit of
compulsory acquisition under RA 6657 ought to be brought to bear against the 912
farmer-beneficiaries adverted to:

The issue of whether such lands of the Lungsod Silangan Townsite are covered by
the Comprehensive Agrarian Reform Law of 1988, the Supreme Court categorically
declared, viz:

We now determine whether such lands are covered by the CARL. Section 4 of R.A. 6657
provides that CARL shall `cover, regardless of tenurial agreement and commodity
produced, all public and private agricultural lands.'  As to what constitutes `agricultural
land,' it is referred to as `land devoted to agricultural activity as defined in this Act
and not classified as mineral, forest, residential, commercial or industrial land.'  The
deliberations of the Constitutional Commission confirm this limitation.  `Agricultural
lands' are only those lands which are `arable and suitable agricultural lands' and do not
include commercial, industrial and residential lands.'

"Based on the foregoing, it is clear that the undeveloped portions of the Antipolo Hills
Subdivision cannot in any language be considered as `agricultural lands.' These lots
were intended for residential use.  They ceased to be agricultural lands upon approval
of their inclusion in the Lungsod Silangan Reservation.  Even today, the areas in
question continued to be developed as a low-cost housing subdivision, albeit at a snail's
pace. x x x

"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 June 15, 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."[42]
Summarizing, the farmer-beneficiaries who were given the 75 CLTs prior to the
issuance of Proclamation 1283, as amended by Proclamation 1637, are deemed full
owners of the lots covered by 75 CLTs vis-à-vis the real registered owner.  The farmer-
beneficiaries have private rights over said lots as they were deemed owners prior to the
establishment of the LS Townsite reservation or at least are subrogated to the rights of
the registered lot owner.  Those farmer-beneficiaries who were issued CLTs or EPs after
June 21, 1974 when Proclamation 1283, as amended, became effective do not acquire
rights over the lots they were claiming under PD 27 or RA 6657, because the lots have
already been reclassified as residential and are beyond the compulsory coverage for
agrarian reform under RA 6657.  Perforce, the said CLTs or EPs issued after June 21,
1974 have to be annulled and invalidated for want of legal basis, since the lots in
question are no longer subject to agrarian reform due to the reclassification of the
erstwhile Doronilla estate to non-agricultural purposes.

Power of Reclassification of Land 

Petitioners DAR and Land Bank ascribe error on the CA in giving Proclamation 1637, an
administrative issuance, preference and weight over PD 27, a law.  As argued, it is
basic that, in the hierarchy of issuances, a law has greater weight than and takes
precedence over a mere administrative issuance.

Petitioners' contention may be accorded some measure of plausibility, except for the
fact that it ignores a basic legal principle: that the power to classify or reclassify lands
is essentially an executive prerogative,[43] albeit local government units, thru zoning
ordinances, may, subject to certain conditions, very well effect reclassification of land
use within their respective territorial jurisdiction.[44]  Reclassification decrees issued by
the executive department, through its appropriate agencies, carry the same force and
effect as any statute.  As it were, PD 27 and Proclamation 1637 are both presidential
issuances, each forming, by virtue of Sec. 3(2), Article XVII of the 1973 Constitution, a
part of the law of the land.  Sec. 3(2), Art. XVII of the 1973 Constitution provides that:

[A]ll proclamations, orders, decrees, instructions, and acts promulgated, issued or

done by the incumbent President shall be part of the law of the land, and shall remain
valid, legal, binding and effective even after the lifting of Martial Law or the
ratification of this Constitution unless modified, revoked, or superseded by subsequent
proclamations, orders, decrees, instructions or unless expressly or impliedly modified or
repealed by the regular Batasang Pambansa. (Emphasis supplied.)

While not determinative of the outcome of this dispute, the Court has, in Agrarian
Reform Beneficiaries Association (ARBA)  v. Nicolas,[45] held that the principles
enunciated in Natalia Realty, Inc. hold sway regardless of what non-agricultural use to
which an agricultural land is converted. ARBA, in fine, declares that the Natalia Realty,
Inc. ruling is not confined solely to agricultural lands located within the townsite
reservations; it is also applicable to other agricultural lands converted to non-
agricultural uses prior to the effectivity of the CARL.  The land classifying medium
that ARBA teaches is not limited solely to a proclamation, but may also involve a city
ordinance.

Jurisdiction of DAR and its Adjudicating Arm 

The DARAB has been created and designed to exercise the DAR's adjudicating
functions.[46]  And just like any quasi-judicial body, DARAB derives its jurisdiction from
law, specifically RA 6657, which invested it with adjudicatory powers over agrarian
reform disputes[47] and matters related to the implementation of CARL.  We need not
belabor that DARAB's jurisdiction over the subject matter, the Doronilla property,
cannot be conferred by the main parties, let alone the intervening farmer-beneficiaries
claiming to have "vested rights" under PD 27.  As earlier discussed, the process of land
reform covering the 1,266 hectares of the Araneta estate was not completed prior to
the issuance of Proclamation 1637. So the intervenors, with the exception of the 79
tenant-beneficiaries who were granted CLTs, failed to acquire private rights of
ownership under PD 27 before the effective conversion of the Doronilla property to non-
agricultural uses.  Hence, the Doronilla property, being outside of CARP coverage, is
also beyond DARAB's jurisdiction.

The OSG's withdrawal of the expropriation suit on September 9, 1987 did not, as Land
Bank posits, automatically restore the Doronilla property to its original classification nor
did it grant DAR or DARAB the power or jurisdiction to order the compulsory acquisition
of the property and to place it under CARP.  And, as the CA aptly noted, the DOJ
Secretary, through Opinion No. 181,[48] even advised the DAR Secretary that lands
covered by Proclamation 1637, having been reserved for townsite purposes, are not
deemed "agricultural lands" within the meaning and intent of Sec. 3(c) of RA
6657 and, hence, outside the coverage of CARL.[49]  The Secretary of Justice
further stated that RA 6657 did not supersede or repeal Proclamations 1283 and 1637
and they remain operative until now; their being townsite reservations still remain valid
and subsisting.  To clarify, a DOJ opinion carries only a persuasive weight upon the
courts.  However since this Court, in Natalia Realty, Inc., cited with approval DOJ
Opinion No. 181, such citation carries weight and importance as jurisprudence.  Be that
as it may, We recognize and apply the principles found in Natalia Realty, Inc. regarding
the character of the Doronilla property being converted to a townsite and, thus, non-
agricultural in character.

Worth mentioning at this juncture is the fact that DAR itself issued administrative
circulars governing lands exempted from CARP. For instance, Administrative No. (AO)
3, Series of 1996, declares in its policy statement what categories of lands are outside
CARP coverage and unequivocally states that properties not covered by CARP shall be
reconveyed to the original transferors or owners. Significantly, AO 3 defines lands not
so covered as "property determined to be exempted from CARP coverage
pursuant to [DOJ] Opinion Nos. 44 and 181" and "where Presidential
Proclamation has been issued declaring the subject property for certain uses
other than agricultural."  Said policy of the DAR, as explained in the CA Decision,
[50]
 should be "applied and upheld in cases where the DAR had erroneously ordered the
compulsory acquisition of the lands found outside CARP coverage."  This is true with the
case at bar due to the fact that Proclamation 1283, as amended by Proclamation 1637,
had effectively reclassified respondent's land as "residential."

To address erroneous compulsory coverage or acquisition of non-agricultural lands or

agricultural lands subject of retention, especially where Certificates of Land Ownership
Award (CLOAs) or EPs have been generated, the said AO itself provides the
mechanism/remedy for the reconveyance of lots thus covered or acquired, viz:
 1. The Emancipation Patents (EPs) or Certificate of Land Ownership Awards
(CLOAs) already generated for landholdings to be reconveyed shall have to be
cancelled first pursuant to Administrative Order No. 02, Series of 1994 prior to
the actual reconveyance. The cancellation shall either be through administrative
proceedings in cases where the EP/CLOA has not yet been registered with the
ROD or through quasi-judicial proceedings in cases where the said EP/CLOA has
already been registered.[51]

Given the foregoing perspective, private petitioners' lament about the injustice done to
them due to the cancellation of their EPs or CLOAs, as the case may be, is specious at
best, for those EPs or CLOAs were generated or granted based on the invalid order by
DAR for the inclusion of the bulk of the Doronilla property under PD 27 and CARP.

With Respect to Petitioners-Intervenors Duran, et al. 

In their petition for intervention filed before Us on December 17, 2009, Duran, et al.
claim that Atty. Lara, the counsel who won their case before the DARAB, passed away
on March 6, 1995.[52]   They bemoan the fact that due to his death, which was
unbeknownst to them at that time, they were not able to receive a copy of, thus are not
bound by, the CA Decision dated September 19, 2003.  They blame Araneta for this
unfortunate incident, alleging, "[S]ix years after Atty. Lara died, the Estate of J. Amado
Araneta x x x filed a Petition for Review [of the DARAB's decision] before the Court of
Appeals. x x x The Araneta estate faked and feigned the service of its Petition upon
Atty. Lara and the farmers by registered mail with the  Explanation `unavailability of
messenger.' "[53]  On the basis of the foregoing premises, Duran, et al. pray to be
allowed to intervene in the instant case and admit their petition for review.

In its Comment (with motion to exclude) on intervenors' petition for review, Araneta
stated the observation that if a handling lawyer dies, it is the that lawyer's client who is
in the better position to know about the former's death, not his adversary or the court.
Assuming that court notices and pleadings continued to be sent and delivered to Atty.
Lara even after his death, at his given address, the comment added, it was intervenors'
fault.[54]  And in support of the motion to exclude, Araneta draws attention to the rule
governing how intervention is done, i.e., via a motion with a pleading-in- intervention
attached to it. Exclusion is also sought on the ground that the petition includes
individuals who are long dead and parties who are not parties below.

We resolve to deny due course to the plea for intervention of Duran, et al.

As the records would show, the DARAB promulgated its Decision on February 7, 2001 or
six (6) years after Atty. Lara died.  Yet, intervening petitioners opted to make an issue
only with respect about their inability, due to Atty. Lara's death, to receive the adverse
CA Decision, but curiously not about the DARAB judgment favorable to them.
Noticeably, in the instant petition, they only focused on questioning what they termed
as the "malicious" failure of the Estate of Araneta to individually inform them of the
filing of its petition for review with the CA.  Nowhere can it be gleaned that they are
questioning the failure of the CA and the DARAB to send copies of their respective
decisions to them.  Thus, the Court is at a loss to understand how Duran, et al. can
insinuate malice on the part of the Estate of Araneta's for its alleged failure to provide
them with a copy of the CA decision and yet not have any problem with respect to the
DARAB decision which they also failed to personally receive due to their counsel's
demise.

While the fault clearly lies with Duran, et al. themselves, they found it convenient to
point fingers.  To be sure, they were remiss in their duty of coordinating with their
counsel on the progress of their pending case.  The constant communication link
needed to be established between diligent clients and their attorney did not obtain in
this case.  It is not surprising, therefore, that Duran and his group only filed their
instant petition 14 years after the death of their counsel, Atty. Lara.  Parties cannot
blame their counsel for negligence when they themselves were guilty of neglect.[55] 
Relief cannot be granted to parties who seek to be relieved from the effects of a
judgment when the loss of the remedy was due to their own negligence.[56]  Equity
serves the vigilant and not those who slumber on their rights.[57] Duran, et al., as are
expected of prudent men concerned with their ordinary affairs, should have had
periodically touched base at least to be apprised with the status of their case. 
Judiciousness in this regard would have alerted them about their counsel's death, thus
enabling them to take the necessary steps to protect their claimed right and interest in
the case.

As Araneta aptly suggested in its Comment on the petition for review-in-intervention, it

is Duran, et al., as clients, not the court or their adversary, who are in a better position
or at least expected to know about their lawyer's death due to the nature of a client-
lawyer relationship.  And knowing, fair play demands that the client accordingly advises
the court and the adverse party about the fact of death.  It is not for the appellate court
or respondent Araneta to inquire why service of court processes or pleadings seemingly
remained unacted by Atty. De Lara and/or his clients.

The long inaction of Duran, et al. to assert their rights over the subject case should be
brought to bear against them.  Thus, We held in Esmaquel v. Coprada:[58]

Laches is the failure or neglect, for an unreasonable and unexplained length of time, to
do that which, by exercising due diligence, could or should have been done earlier; it is
negligence or omission to assert a right within a reasonable time, warranting the
presumption that the party entitled to assert it either has abandoned or declined to
assert it. There is no absolute rule as to what constitutes laches or staleness of
demand; each case is to be determined according to its particular circumstances, with
the question of laches addressed to the sound discretion of the court. Because laches is
an equitable doctrine, its application is controlled by equitable considerations and
should not be used to defeat justice or to perpetuate fraud or injustice.

There can be little quibble about Duran, et al. being guilty of laches.  They failed and
neglected to keep track of their case with their lawyer for 14 long years. As discussed
above, Atty. Lara died even prior to the promulgation of the DARAB Decision.  Even
then, they failed to notify the DARAB and the other parties of the case regarding the
demise of Atty. Lara and even a change of counsel.  It certainly strains credulity to
think that literally no one, among those constituting the petitioning-intervenors, had
the characteristic good sense of following up the case with their legal counsel.    Only
now, 14 years after, did some think of fighting for the right they slept on.  Thus, as to
them, the CA Decision is deemed final and executory based on the principle of laches.
Agrarian reform finds context in social justice in tandem with the police power of the
State. But social justice itself is not merely granted to the marginalized and  the
underprivileged.  But while the concept of social justice is intended to favor those who
have less in life, it should never be taken as a toll to justify let alone commit an
injustice. To borrow from Justice Isagani A. Cruz:

[S]ocial justice--or any justice for that matter--is for the deserving whether he be a
millionaire in his mansion or a pauper in his hovel. It is true that, in a case of
reasonable doubt, we are called upon to tilt the balance in favor of the poor simply
because they are poor, to whom the Constitution fittingly extends its sympathy and
compassion.  But never is it justified to prefer the poor simply because they are poor,
or to eject the rich simply because they are rich, for justice must always be served, for
poor and rich alike, according to the mandate of the law.[59]

At any rate, all is not lost on the part of Duran and the other petitioners-intervenors. In
the event that they belong to the group of 75 PD 27 tenant-farmers who, as earlier
adverted, were awarded individual CLT covering parcels of lands described in the CLT,
then it is just but fair and in keeping with the imperatives of social justice that their
rights to the covered lots should be recognized and respected.

To the 912 holders of EPs, this decision might be a big let down. But then the facts and
applicable laws and jurisprudence call for this disposition.
cralaw

WHEREFORE, the petitions are hereby partly DENIED. The CA Decision dated

September 19, 2003, as effectively reiterated in its Resolution of January 22, 2004 and
April 2, 2004, is AFFIRMED with the modification that the 75 CLTs issued prior to the
effectivity of Presidential Proclamation No. 1283 on June 21, 1974 are declared legal
and valid.  The other CLTs, EPs, CLOAs issued by DAR involving the subject property
are hereby CANCELED and NULLIFIED.

The Land Bank and DAR are hereby ordered to COMPUTE the just compensation of the
land subject of the 75 CLTs and PAY the just compensation to the Estate of J. Amado
Araneta.

No pronouncement as to cost.

SO ORDERED.

G.R. No. 167952, October 19, 2016

 GONZALO PUYAT & SONS, INC., Petitioner, v. RUBEN ALCALDE (DECEASED),
SUBSTITUTED BY GLORIA ALCALDE, REPRESENTATIVE OF THE FARMER
BENEFICIARIES, Respondent.

RESOLUTION

VELASCO JR., J.:

This resolves the Motion for Reconsideration and the Supplement to Respondent's

Motion for Reconsideration filed by respondents praying that the Decision of the Court
dated February 1, 2012 be set aside and reconsidered and that the Decision dated
February 1, 2005 and Resolution dated April 25, 2005 of the Court of Appeals in CA-
G.R. SP No. 86069 be reinstated.

To recall, the Court, by its Decision dated February 1, 2012, reversed and set aside the
Decision1 dated February 1, 2005 and the Resolution2 dated April 25, 2005 of the Court
of Appeals (CA), and reinstated the Decision3 dated August 8, 2003 and the
Order4 dated July 2, 2004 of the Office of the President (OP). In tum, the said Orders of
the OP set aside the Orders5 dated June 8, 2001 and November 5, 2001 of the
Department of Agrarian Reform (DAR) Secretary and lifted the Notice of Coverage
dated April 14, 1998 and Notice of Land Valuation and Acquisition dated November 15,
1998 over the 37.7353-hectare portion of petitioner Gonzalo Puyat & Sons, Inc.'s
property (subject landholding).

The facts of the case, as stated in this Court's Decision dated February 1, 2012, are as
follows:
chanRoblesvirtualLawlibrary

On April 14, 1998, the Municipal Agrarian Reform Officer (MARO) issued a Notice of
Coverage over the subject landholding informing petitioner that the subject properties
were being considered for distribution under the government's agrarian reform
program. Thereafter on November 15, 1998, the corresponding Notice of Valuation and
Acquisition was issued informing petitioner that a 37.7353-hectare portion of its
property is subject to immediate acquisition and distribution to qualified agrarian
reform beneficiaries and that the government is offering P7,071,988.80 as
compensation for the said property.

Petitioner then filed a Petition before the Department of Agrarian Reform (DAR),
wherein it argues that the properties were bought from their previous owners in good
faith; that the same remains (sic) uncultivated, unoccupied, and untenanted up to the
present; and, that the subject landholdings were classified as industrial, thus, exempt
from the coverage of the Comprehensive Agrarian Reform Program (CARP). Petitioner
prayed, among other things, that the Notice of Coverage and Notice of Acquisition be
lifted and that the properties be declared exempt from the coverage of CARP.

Respondents on their part countered, among other things, that the classification of the
land as industrial did not exempt it from the coverage of the CARP considering that it
was made only in 1997; the BLURB certification that the Municipality of Bifian, Laguna
does not have any approved plan/zoning ordinance to date; that they are not among
those farmer-beneficiaries who executed the waivers or voluntary surrender: and, that
the subject landholdings were planted with palay.

On June 8, 2001, then DAR Secretary Hernani A. Braganza, issued an Order in favor of
the respondent declaring that the subject properties are agricultural land; thus, falling
within the coverage of the CARP, the decretal portion of which reads: ChanRoblesVirtualawlibrary

WHEREFORE, premises considered, Order is hereby issued dismissing the petition. The
MARO/PARO concerned is directed to immediately proceed with the acquisition of
subject landholdings under CARP, identify the farmer-beneficiaries and generate/issue
the corresponding Certificates of Land Ownership Awards pursuant to Section 16 of RA
6657.

SO ORDERED.
On July 24, 2001, respondents tiled a Motion for the Issuance of an Order of Finality of
Judgment praying that an Order of Finality be issued for petitioner's failure to interpose
a motion for reconsideration or an appeal from the order of the DAR Secretary.

On August 3, 200L the DAR issued an Order granting the motion and directing that an
Order of Finality be issued. Consequently, on August 6, 2001, an Order of Finality
quoting the dispositive portion of the June 8, 2001 Order of the DAR Secretary was
issued.

On August 17, 2001, petitioner received a copy of the Orders dated August 3 and 6,
2001. Thereafter, on August 20, 2001, petitioner filed a Motion to Lift Order of Finality.

On August 28, 2001, petitioner's counsel filed a Manifestation with Urgent Ex

Parte Motion for Early Resolution informing the DAR of his new office address and
praying that the petition be resolved at the earliest convenient time and that he be
furnished copies of dispositions and notices at his new and present address.

In a Letter sent to the new address of petitioner's counsel, dated September 4, 2001,
Director Delfin B. Samson of the DAR informed petitioner's counsel that the case has
been decided and an order of finality has already been issued, copies of which were
forwarded to his last known address. Nevertheless, Director Samson attached copies of
the Order dated June 8, 2001 and the Order of Finality dated August 6, 2001 for his
reference.

On September 14, 2001, petitioner filed a Motion for Reconsideration with

Manifestation, questioning the orders dated June 8, 2001 and August 6, 2001 and
praying that the said orders be set aside and a new one issued granting the petition.

On September 21, 2001, the DAR issued an order directing the parties to submit their
respective memoranda.

On November 5, 2001, the DAR issued an order denying the motion for reconsideration,
which was received by petitioner's counsel on November 15, 2001.

Aggrieved, petitioner filed an appeal before the Office of the President which was
received by the latter on November 21, 2001. The case was docketed as O.P. Case No.
01-K-184.
On August 8, 2003, the Office of the President rendered a Decision in favor of
petitioner, the dispositive portion of which reads: ChanRoblesVirtualawlibrary

WHEREFORE, premises considered, the Orders dated 08 June 2001 and 05 November
2001 of the DAR Secretary are hereby SET ASIDE and the Notice of Coverage dated
April 14, 1998 and Notice of Acquisition dated November 15, 1998 issued over the
subject land LIFTED, without prejudice to the conduct of an ocular inspection to
determine the classification of the land.

Parties are to INFORM this Office, within five (5) days from notice, of the dates of their
receipt of this Decision.

SO ORDERED.
On March 24, 2004, there being no appeal or motion for reconsideration interposed
despite clear showing that both parties had received their copies of the August 8, 2003
Decision. the Office of the President issued an Order declaring that the decision has
become final and executory.

Subsequently, respondents filed a Petition for Relief seeking that the above Decision
and Order of the Office of the President be set aside and the Orders of the DAR
Secretary reinstated.

On July 2, 2004, the Office of the President treating the Petition for Relief as a motion
for reconsideration, issued an Order dismissing the same, to wit: ChanRoblesVirtualawlibrary

WHEREFORE premises considered, the "Petition for Relief' dated 3 May 2004, which is
treated herein as a motion for reconsideration, filed by Ruben Alcaide is
hereby DISMISSED. No further motions or reconsideration or other pleadings of similar
import shall be entertained.

SO ORDERED.
Respondents then sought recourse before the CA assailing the Decision dated August 8,
2003 and Order dated July 2, 2004 of the Office of the President. In support of the
petition, respondents raised the following errors:
ChanRoblesVirtualawlibrary

I. THE HONORABLE OFFICE OF THE PRESIDENT COMMITTED A REVERSIBLE

ERROR WHEN IT REVERSED AND/OR SET ASIDE THE ORDERS DATED
JUNE 8, AND NOVEMBER 5, 2001 OF THE DAR SECRETARY DESPITE THE
FINALITY OF THE SAID ORDERS;

II. THE HONORABLE OFFICE OF THE PRESIDENT ERRED WHEN IT RULED

THAT THE SUBJECT PROPERTY IS NOT AGRICULTURAL.

On February 1, 2005, the CA rendered a Decision granting the petition in favor of the
respondents, the decretal portion of which reads: ChanRoblesVirtualawlibrary

WHEREFORE, in view of the foregoing, the petition for review is hereby GRANTED.

The decision dated August 8, 2003 and the order dated July 2. 2004 of the Office of the
President in O.P. CASE No. 01-K-184 are SET ASIDE for being null and void. The
orders dated June 8, 2001 and August 6, 2001 of the DAR Secretary arc
hereby REINSTATED.

SO ORDERED.
Ruling in favor of the respondents, the CA opined that the Order of the DAR Secretary
dated June 8, 2001 has become final and executory by petitioner's failure to timely
interpose his motion for reconsideration. Consequently. when petitioner filed his motion
for reconsideration on September 14, 2001 the order sought to be reconsidered has
attained finality. Thus, the Office of the President had no jurisdiction to re evaluate
more so reverse the findings of the DAR Secretary in its Order dated June 8, 2001.
(emphasis in the original; citations omitted.)

Inevitably, petitioner tiled a Petition for Review on Certiorari before this Court seeking
to reverse the February 1, 2005 Decision of the CA and its April 25, 2005 Resolution
denying petitioner's motion for reconsideration.

As mentioned above, the Court, in its Decision dated February 1, 2012 (assailed
Decision), ruled in favor of petitioner and reinstated the August 8, 2003 Decision and
the July 2, 2004 order of the OP, the decretal portion of which reads as follows:
chanRoblesvirtualLawlibrary

WHEREFORE, premises considered, the petition is GRANTED. The Decision and the
Resolution of the Court of Appeals in CA-G.R. SP No. 86069 are REVERSED and SET
ASIDE. The Decision dated August 8, 2003 and the Order dated July 2, 2004 of the
Office of the President are REINSTATED. (emphasis in the original)

In this recourse, respondents urge the Court to reconsider its assailed

Decision, interposing the following grounds: ChanRoblesVirtualawlibrary

THIS HONORABLE COURT ERRED IN MAKING (sic) RULING THAT THE ORDER OF THE
DAR DATED JUNE 8, 2001 HAS NOT BECOME FINAL AND EXECUTORY

II

THIS HONORABLE COURT ERRED WHEN IT MADE A RULING THAT THE MARO
[MUNICIPAL AGRARIAN REFORM OFFICER] FAILED TO COMPLY WITH THE PRE-OCULAR
INSPECTION REQUIREMENTS OF DAR ADMINISTRATIVE ORDER NO. 01 SERIES OF
1998 JUST BECAUSE THE MARO FAILED TO CHECK THE BOX/ES AS TO WHETHER OR
NOT THE LAND IS "PRESENTLY BEING CULTIVATED/SUITABLE TO AGRICULTURE."6 chanroblesvirtuallawlibrary

In other words, respondents raised the following issues for Our consideration: (1)
whether the June 8, 2001 Order of the DAR has become final and executory; and (2)
whether the MARO had indeed failed to comply with the pre-ocular inspection
requirements under DAR Administrative Order No. 01, Series of 1998, which call for the
lifting of the notice of coverage and the notice of land valuation and acquisition issued
by the DAR.

Finality of the June 8, 2001 Order

In order to have a better understanding of the instant case, let us recall, in clear
chronological order, the relevant events that took place prior to the promulgation of the
assailed Decision by this Court:
chanRoblesvirtualLawlibrary
December 20, Petitioner filed its Petition7 dated December 15, 2000 before the DAR
2000: praying, interalia, that the notice of coverage and notice of land valuation and
acquisition be lifted and that the subject landholding be declared exempt from
the coverage of the comprehensive agrarian reform program (CARP).
February 5, 2001: Respondents filed its Reply (To Petition dated 15 December 2000).8
June 8, 2001: Then DAR Secretary Hernani A. Braganza (DAR Sec. Braganza) issued the
Order9 dismissing the petition and declaring that the subject landholding is an
agricultural land, thus, falling within the CARP coverage.
July 24, 2001: Respondents filed their Motion for the Issuance of an Order of Finality of
Judgment10 of even date praying that an order of finality be issued for
petitioner's failure to interpose an appeal or motion for reconsideration from
the June 8, 2001 Order of the DAR Secretary.
August 3, 2001: DAR issued its Order11 granting the motion for the issuance of an order of
finality of judgment and directing that an order of finality be issued.
August 6, 2001: DAR, through Director Delfin B, Samson (Dir. Samson), issued the Order of
Finality.12
August 17, 2001: Petitioner received a copy of the Orders dated August 3 and 6, 2001.
August 20, 2001: Petitioner filed a Motion to Lift Order of Finality13 of even date.
August 28, 2001: Petitioner's counsel filed a Manifestation with  Urgent Ex Parte Motion for
Early Resolution14 of even date manifesting that said counsel changed his
office address and praying that its motion to lift order of finality be resolved
at the earliest opportunity as the delay in its resolution will likely delay
petitioner's plan to develop the subject area for low cost social housing.
September 4, DAR, through a letter15 issued by Dir. Samson, informed petitioner's counsel
2001: that the case has been decided and that an order of finality has already been
issued.
September 14, Petitioner filed its motion tor reconsideration16 questioning the June 8, 2001
2001: and August 6, 2001 Orders of the DAR and praying that said orders be set
aside.
September 21, DAR issued its Order directing the parties to submit their respective
2001: memoranda.
November 5, DAR issued its order denying petitioner's motion for reconsideration.
2001:
November 21, Petitioner filed its Notice of Appeal17 dated November 19, 2001 before the
2001: OP.

As can be derived from the foregoing, the June 8, 2001 Order of the DAR has already
attained finality for several reasons. First, as aptly observed by the CA, petitioner's
motion for reconsideration of the June 8, 2001 Order of the DAR was filed only on
September 14, 2001, after an order of finality has already been issued by the DAR.18 chanrobleslaw

In its Motion to Lift Order of Finality dated August 20, 2001, petitioner's counsel
expressly admitted that he received said order only on August 17, 2001.19 Granting that
petitioner's counsel was forthright in making such an admission, then petitioner had
only until September 1, 2001 within which to tile its motion for reconsideration. Having
filed its motion for reconsideration only on September 14, 2001, way beyond the 15-
day reglementary period, the order sought to be reconsidered by petitioner has already
attained finality.

Second, even if this Court overlooks the admission of petitioner's counsel that he
already received the June 8, 2001 Order on August 17, 2001, still, said order was
already deemed to have been served upon petitioner when it failed to notify DAR of its
counsel's change of address. On this point, the DAR issued an Order dated August 3,
2001,20 stating, inter alia:

Per certification of the Records Management Division, the counsel of petitioner has

moved out without leaving any forwarding address and the petitioner's address is
insufficient that it could not be located despite diligent efforts.

WHEREFORE, premises considered, the Order of June 8, 2001 is deemed to have

been served and let Order of Finality be issued.

SO ORDERED.21 (Emphasis supplied)

Failure of petitioner's counsel to officially notify the DAR of its change of address is
an inexcusable neglect which binds his client. In Karen and Kristy Fishing Industry v.
CA,22 this rule has been clearly elucidated by the Court, to wit:
chanRoblesvirtualLawlibrary

The records show that the failure of Atty. Dela Cruz. petitioners· counsel of record. to
receive a copy of the Court of Appeals decision was caused by his failure to inform the
appellate court of the change of his address of record. Thus, the Clerk or Court had to
resend a copy of the decision, this time to the address on record of spouses Tuvilla.

If counsel moves to another address without informing the take of that

change, such omission or neglect is inexcusable and will stay the finality of the
decision. The court cannot be expected to take judicial notice of the new
address of a lawyer who has moved or to ascertain on its own whether or not
the counsel of record has been changed and who the new counsel could
possibly be or where he probably resides or holds office.

Jurisprudence is replete with pronouncements that clients arc bound by the actions of
their counsel in the conduct of their case. If it were otherwise, and a lawyer's mistake
or negligence were admitted as a reason for the opening of a case, there would be no
end to litigation so long as counsel had not been sufficiently diligent or experienced or
learned.

In Macondray & Co., Inc. v. Provident Insurance Corporation, petitioner's previous

counsel moved to a new address without informing the appellate court. eventually
causing the appellate court's decision to become final and executory. The Court ruled
that the counsel's omission was an inexcusable neglect binding upon petitioner therein
for the following reasons:ChanRoblesVirtualawlibrary

In the present case. there is no compelling reason to overturn well-settled

jurisprudence or to interpret the rules liberally in favor of petitioner, who is not entirely
blameless. It should have taken the initiative of periodically keeping in touch with its
counsel, checking with the court. and inquiring about the status of its case. In so doing,
it could have taken timely steps to neutralize the negligence of its chosen counsel and
to protect its interests. Litigants represented by counsel should not expect that all they
need to do is sit back, relax and await the outcome of their case.
As pointed out by respondent, after the death of petitioner Tuvilla's husband, more than
a year had elapsed before the promulgation of the Court of Appeals decision. but she
failed to coordinate with the counsel of record and check the status of the case in the
interim.

Moreover. the general rule is that when a party is represented by counsel of record.
service of orders and notices must be made upon said attorney and notice to the client
and to any other lawyer than the counsel of record is not notice in law. The Court of
Appeals did not strictly apply this rule and was even liberal when it did not consider the
service on the counsel of record as notice to petitioner. It even counted the 15-day
reglementary period for filing a motion of reconsideration from the later receipt by
petitioner Aquilina Tuvilla of a copy of the decision instead of from the earlier service on
petitioner's counsel of record. Unfortunately. she squandered the new period as she
failed to file the motion for reconsideration within the said period.

Thus, the Court of Appeals did not commit grave abuse of discretion when it denied
petitioners' motion for additional time to file the motion for reconsideration in
accordance with the well settled principle that on extension for filing said motion may
be granted. As a rule, periods prescribed to do certain acts must be followed
with fealty as they arc designed primarily to speed up the final disposition of
the case. Such reglementary periods are indispensable interdictions against
needless delays and for an orderly discharge of judicial business. Deviations
from the rules cannot be tolerated. More importantly, their observance cannot
be left to the whims and caprices of the parties. What is worrisome is that parties
who fail to file their pleading within the periods provided for by the Rules of
Court, through their counsel's inexcusable neglect, resort to beseeching the Court
to bend the rules in the guise of a plea for a liberal interpretation thereof thus,
sacrificing efficiency and order. (citation omitted: Emphasis supplied)

Considering that petitioner's counsel moved out of its previous address without leaving
any forwarding address, the DAR was correct in issuing the Order dated August 3, 2001
where it was ruled that "the Order of June 8, 2001 is deemed to have been served"
upon petitioner and which correspondingly led to the issuance of the order of finality. To
be sure, such omission or neglect on the part of petitioner's counsel is inexcusable and
binding upon petitioner.

And third, this Court is not unaware of the time-honored principle that "actual
knowledge" is equivalent to "notice." Thus, when petitioner, through its counsel, filed
its Motion to Lift Order of Finality dated August 20, 2001 with the DAR, this indubitably
indicates that petitioner and its counsel already had prior "actual knowledge" of the
June 8, 2001 Order, which "actual knowledge" is equivalent to "notice" of said order.23 
As a matter of fact, in the said motion, petitioner even quoted the dispositive portion of
the June 8, 2001 Order of the DAR. Inevitably, this leads to no other conclusion than
that petitioner already had actual knowledge of the denial of its petition at the time said
motion had been drafted and/or tiled. Since the motion to lift order of finality was
drafted and/or filed on August 20, 2001, it can be said that at the latest, petitioner had
until September 4, 2001 within which to file its motion for reconsideration.
Consequently, the filing of the motion for reconsideration only on September 14, 2001
was certainly way beyond the reglementary period within which to tile the same.

Significantly, when a decision becomes final and executory, the same can, and should,
no longer be disturbed. As this Court held in Zamboanga Forest Managers Corp. v. New
Pacific Timber and Supply Co.:24 chanrobleslaw

Granted by the CA an extension of fifteen (15) days from October, 2003 or until 9
November, 2003 within which to file its petition for review, it does not likewise help
ZFMC's cause any that it was only able to do so on 24 November 2003. Although appeal
is an essential part of our judicial process, it has been held. time and again, that the
right thereto is not a natural right or a part of due process but is merely a statutory
privilege. Thus. the perfection of an appeal in the manner and within the period
prescribed by law is not only mandatory but also jurisdictional and failure of a party to
conform to the rules regarding appeal will render the judgment final and
executory. Once a decision attains finality, it becomes the law of the case
irrespective of whether the decision is erroneous or not and no court - not
even the Supreme Court- has the power to revise, review, change or alter the
same. The basic rule of finality of judgment is grounded on the fundamental
principle of public policy and sound practice that, at the risk of occasional
error, the judgment of courts and the award of quasi-judicial agencies must
become final at some definite date fixed by law. (citations omitted; Emphasis
supplied)

Considering the foregoing, it was clearly erroneous on the part of the OP to have taken
cognizance of the appeal filed by petitioner given that the June 8, 2001 Order of the
DAR has already attained finality and, thus, should no longer be disturbed.

Determination by the DAR

Even if this Court sets aside petitioner's procedural lapse, the case should still be
dismissed based on substantial grounds.

In upholding the August 8, 2003 Decision of the OP, the majority harped on the fact
that the MARO failed to mark any of the check boxes for "Land Use" to indicate whether
the subject properties were sugarland, cornland, un-irrigated riceland, irrigated
riceland, or any other classification of agricultural land, and consequently arrived at the
conclusion that no preliminary ocular inspection was conducted and, hence, the lifting
of the notice of coverage over the subject landholding was proper, without prejudice to
the conduct of an ocular inspection to determine the classification of the land.

The conclusion arrived at by the majority is flawed for two reasons. First, the fact that
the MARO issued CARP Form No. 3.a, entitled "Preliminary Ocular Inspection Report,"
belies the majority's conclusion that no  preliminary  ocular inspection was conducted
by the DAR.25  Strikingly, almost all the other details under said report were filled up or
cralawred

marked. Said report was also signed by the persons who conducted the inspection and
attested by Flordeliza DP Del Rosario, the MARO in charge. In this regard, it should be
noted that with the issuance of the Preliminary Ocular Inspection Report, the MARO is
presumed to have regularly performed his or her duty of conducting a preliminary
ocular inspection, in the absence of any evidence to overcome such presumption. 26 chanrobleslaw

To my mind, the failure to mark the checkboxes pertaining to ''Land

Condition/Suitability to Agriculture" and "Land Use" does not constitute as evidence
that may overcome the presumption of regularity in the performance of official duty. If
at all, such failure merely constitutes inadvertence that should not prejudice the
farmers in the instant case.

Interestingly, a perusal of the Preliminary Ocular Inspection Report would reveal that
the checkboxes pertaining to the sub-categories under "Land Condition/Suitability to
Agriculture" and "Land Use" do not negate the finding that the subject landholding is an
agricultural land, which led to the issuance of the notice of coverage over said property.
Particularly, the following are the sub-categories and the checkboxes which the MARO
failed to mark:
chanRoblesvirtualLawlibrary

2. Land Condition/Suitability to Agriculture (Check Appropriate Parenthesis)

( ) Subject property is presently being cultivated/suitable to agriculture
( ) Subject property is presently idle/vacant
xxxx

4. Land Use (Check Appropriate Parenthesis)

( ) Sugar land                         ( ) Unirrigated Riceland
( ) Cornland.                          ( ) Irrigated Riceland
( ) Others (Specify)______________27]

Evidently, none of the abovementioned description of land would negate the

determination of the DAR that the subject landholding is indeed an agricultural land.
Whether the subject landholding is presently being cultivated or not or whether the
same is sugarland, cornland, unirrigated or inigated riceland is of no moment. The
primordial consideration is whether the subject landholding Is an agricultural land which
falls within the coverage of CARP.

Moreover, any doubt as to the conduct of an ocular inspection and as to the nature and
character of the subject landholding should be obviated with the issuance of the
Memorandum28 dated March 3, 2005 addressed to Luis B. Bueno, Jr., Assistant Regional
Director for Operations of DAR Regional Office Region IV-A, and prepared by Catalina D.
Causaren, Provincial Agrarian Reform Officer (PARO) of Laguna, where it was stated
that an ocular inspection has been conducted and that the subject landholding is indeed
an agricultural land. As stated:
chanRoblesvirtualLawlibrary

We are called to tilt the balance in favor of these poor farmers, so the undersigned
[PARO Catalina D. Causaren] and Ms. Rosalinda M. Rivera, Legal Officer
II, investigated and inspected the properties. Hereunder arc the following
informations (sic) gathered. to wit: ChanRoblesVirtualawlibrary
- The properties are bounded on the South by residential houses and large portion was planted to
palay; on the North planted also to palay; on the West and East small portion with mixture of
Horse Raising and Industrial establishment.
- The area surrounding the subject properties are mostly planted to palay;
- The CLOA Holders were prevented from entering the subject landholdings to perform their
farming activities thereon, thus, the same remains unoccupied;
- A big DAM is the main source of Irrigation Service throughout the municipality of
Biñan/Samahang Nagdadamayang Buklod ng Magpapatubig ng Biñan;
- No water supply in the irrigation facilities due to absence of agricultural activities and not
planted to any crops;
- There was no doubt that the landholdings arc agricultural in nature in view of the fact that large
portion surrounding the area arc planted to palay. the purpose of which is agricultural
production since palay is agricultural products (sic).29 (Emphasis supplied)

Clearly, MARO's failure to mark any of the check boxes for "Land Condition/Suitability
to Agriculture" and "Land Use" to indicate whether the subject properties were
sugarland, comland, un-irrigated riceland, irrigated riceland, or any other classification
of agricultural land leading to the lifting of the notice of coverage over the subject
landholding, without prejudice to the conduct of an ocular inspection to determine the
classification of the land, is totally uncalled for.

And second, petitioner has miserably failed to present any evidence that would support
its contention that the subject landholding has already been validly reclassified from
"agricultural" to "industrial" land. According to petitioner, the subject landholding has
already been reclassified as industrial land by the Sangguniang Bayan of the
Municipality of Biñan, and that pursuant to such reclassification, petitioner has been
assessed, and is paying, realty taxes based on this new classification.30 chanrobleslaw

Indeed, the subject landholding had been reclassified under Kapasiyahan Big. 03-
(89)31 dated January 7, 1989 of the Municipality of Biñan, Laguna. It is wmih noting,
however, that said reclassification has not been approved by the Housing and Land Use
Regulatory Board based on its Certification32 dated October 16, 1997. As found by DAR
Sec. Braganza in the June 8, 2001 Order:
chanRoblesvirtualLawlibrary

The principal issue lo be resolved IS whether or not subject landholdings are subject to
CARP coverage.

We find no merit in the instant petition. Subject landholdings are still agricultural land
and, accordingly, fall within the CARP coverage. Department of Justice Opinion No. 44,
series of 1990, is not applicable. As certified to by Ms. Carolina Casaje of HLURB on
October

16, 1997, there is no HLURB-approved Town Plan/Zoning Ordinance of the municipality

of Biñan, Laguna, reclassifying subject landholdings as industrial. The tax declaration
presented by petitioner indicating that subject landholdings is a proposed industrial
area is not sufficient in law to effect the reclassification insisted upon by petitioner. As
exhaustively discussed in the above-mentioned DOJ Opinion, there should be a zoning
ordinance and that the same must be approved before the effectivity of RA 6657, i.e.,
July 15, 1988. Neither requirement obtains herein.

WHEREFORE, premises considered, Order is hereby issued dismissing the petition. The
MARO/PARO concerned is directed to immediately proceed with the acquisition of
subject landholdings under CARP. identify the farmer-beneficiaries and generate/issue
the corresponding Certificates of Land Ownership Awards pursuant to Section 16 of RA
6657.

SO ORDERED.33 (emphasis in the original.)

Neither was there any showing that said reclassification has been authorized by the
DAR as required under Section 6534 of Republic Act No. 6657 of the Comprehensive
Agrarian Reform Law.35 chanrobleslaw

Aside from the reclassification by the Sangguniang Bayan of the Municipality of Biñan,
petitioner also relies on the tax declaration purportedly reclassifying the subject
landholding as industrial. However, as petitioner itself admitted, what was indicated in
said tax declaration was merely "proposed industrial."36 Evidently a "proposal" is quite
different from "reclassification." Thus, petitioner cannot also rely on said tax declaration
to bolster its contention that the subject landholding has already been reclassified from
"agricultural" to "industrial."

WHEREFORE, respondent's  Motion for Reconsideration and the Supplement to

Respondent's Motion for Reconsideration are GRANTED and the February 1, 2012
Decision of this Court is RECONSIDERED and SET ASIDE.

The instant petition is hereby DENIED. The Decision dated February 1, 2005 and the
Resolution dated April 25, 2005 of the Court of Appeals in CA-G.R. SP No. 86069
are REINSTATED and AFFIRMED and, consequently, the Orders dated June 8, 2001
and November 5, 2001 of the Department of Agrarian Reform Secretary
are REINSTATED.

SO ORDERED. chanRoblesvirtualLawlibrary

Mendoza, Reyes, and  Perlas-Bernabe, JJ., concu

G.R. No. 174588               December 11, 2013

 DAV AO NEW TOWN DEVELOPMENT CORPORATION, Petitioner,
vs.
SPOUSES GLORIA ESPINO SALIGA and CESAR SALIGA, and SPOUSES DEMETRIO EHARA
and ROBERTA SUGUE EHARA, Respondents.

DECISION

BRION, J.:

We pass upon the petition for review on certiorari,   under Rule 45 of the Rules of Court, challenging
1

the March 28, 2006 decision  and the September 5, 2006 resolution  of the Court of Appeals (CA) in
2 3

CA-G.R. SP No. 79377. This CA ruling affirmed the January 12, 2001 decision  of the Department of
4

Agrarian Reform Adjudication Board (DARAB) in DARAB Case No. 7775. The DARAB set aside the
July 6, 1998 decision  of the Provincial Agrarian Reform Adjudicator (PARAD) that ruled in favor of
5

petitioner Davao New Town Development Corporation (DNTDC).

The Factual Antecedents

At the root of the present controversy are two parcels of land –4.9964 hectares  and 2.5574
6

hectares  (subject property) - situated in Catalunan Pequeño, Davao City and originally registered in
7

the name of Atty. Eugenio Mendiola (deceased).

On February 5, 1998,  the respondents - spouses Gloria Espino Saliga and Cesar Saliga (spouses
8

Saliga) and spouses Demetrio Ehara and Roberta Sugue Ehara (spouses Ehara), (collectively
referred to as respondents) - filed before the Office of the PARAD in Davao City a complaint for
injunction, cancellation of titles and damages against DNTDC. They amended this complaint on
February 13, 1998.

In their complaint and amended complaint, the respondents claimed that they and their parents, from
whom they took over the cultivation of the landholding, had been tenants of the property as early as
1965. On August 12, 1981, the respondents and Eugenio executed a five-year lease contract.  While
9

they made stipulations regarding their respective rights and obligations over the landholding, the
respondents claimed that the instrument was actually a device Eugenio used to evade the land
reform law.

The respondents also argued that pursuant to the provisions of Presidential Decree (P.D.) No. 27,
they, as tenants, were deemed owners of the property beginning October 21, 1972 (the Act’s
effectivity date); thus, the subsequent transfer of the property to DNTDC was not valid. The
respondents added that DNTDC could not have been a buyer in good faith as it did not verify the
status of the property – whether tenanted or not tenanted - prior to its purchase. The respondents
submitted, among others, the pertinent tax declarations showing that the property was agricultural as
of 1985.

In its answer, DNTDC alleged in defense that it purchased the property in good faith from the
previous owners (Paz M. Flores and Elizabeth M. Nepumuceno)  in 1995. At that time, the alleged
10

tenancy relationship between the respondents and Eugenio had already expired following the
expiration of their lease contracts in 1986. DNTDC also claimed that prior to the sale, the Davao City
Office of the Zoning Administrator confirmed that the property was not classified as agricultural; it
pointed out that the affidavit of non-tenancy executed by the vendors affirmed the absence of any
recognized agricultural lessees on the property. DNTDC added that the property had already been
classified to be within an "urban/urbanizing zone" in the "1979-2000 Comprehensive Land Use Plan
for Davao City" that was duly adopted by the City Council of Davao City and approved by the
Human Settlement Regulatory Commission (HSRC) (now the Housing and Land Use Regulatory
Board [HLURB]).

In its decision of July 6, 1998, the PARAD ordered the DNTDC to pay the spouses Saliga the sum of
₱20,000.00 and the spouses Ehara the sum of ₱15,000.00 as disturbance compensation, and to
allocate to each of the respondent spouses a 150-square meter homelot. While the PARAD
conceded that the respondents were tenants of the property, it nevertheless ruled that the property
had already been reclassified from agricultural to non-agricultural uses prior to June 15, 1988, the
date when Republic Act (R.A.) No. 6657 (the Comprehensive Agrarian Reform Law of 1988) took
effect. Thus, since R.A. No. 6657 covers only agricultural lands, the property fell outside its
coverage.

The respondents appealed the case to the DARAB.

The ejectment case before the MTCC

Pending resolution of the appeal before the DARAB, DNTDC filed before the Municipal Trial Court in
Cities (MTCC) of Davao City a complaint for unlawful detainer  against Demetrio Ehara, Jr.,
11

Reynaldo Saliga and Liza Saliga, the children of respondent spouses Ehara and spouses
Saliga. DNTDC claimed that it owned the 2.5574-hectare portion of the property which the
respondents’ children had been occupying by its mere tolerance. Despite its repeated demands, the
respondents’ children refused to vacate and continued to illegally occupy it.

In their answer, the respondents’ children raised the issue of lack of jurisdiction, arguing that the
case involved an agrarian dispute. They contended that the law considers them immediate members
of the farm household, to whom R.A. No. 3844 and R.A. No. 6657 extend tenurial security. Thus,
they claimed that they, as tenants, were entitled to continue occupying the disputed portion.

On December 20, 2000, the MTCC rendered its decision  granting the DNTDC’s complaint and
12

ordering the respondents’ children to vacate the 2.5574-hectare portion of the property. The MTCC
ruled that the respondents’ children were not tenants of the property because they failed to prove
that their stay on the premises was by virtue of a tenancy agreement and because they had been
occupying portions different from their parents’ landholding. The MTCC also ruled that the 2.5574-
hectare portion was no longer agricultural and was thus removed from the coverage of R.A. No.
6657.

The prohibition case before the RTC

The respondents’ children did not appeal the MTCC decision. Instead, on June 1, 2001, they filed
before the Regional Trial Court (RTC), Branch 17, Davao City a petition for Prohibition  against
13

DNTDC to enjoin the execution of the MTCC decision. They repeated the defenses and allegations
in their pleading before the MTCC. The children of the spouses Saliga – Liza and Reynaldo -
however added that Cesar had already died; hence, they were filing the prohibition case in their own
right as heirs/successors-in-interest of Cesar.

On November 29, 2001, the respondents’ children and DNTDC entered into a compromise
agreement.  The respondents’ children undertook to voluntarily and peacefully vacate the 2.5574-
14

hectare portion of the property and to remove and demolish their respective houses built on its
premises, while DNTDC agreed to give each of them the amount of ₱20,000.00 as financial
assistance. The RTC approved the compromise agreement in its December 7, 2001 decision. 15
The Ruling of the DARAB

In its decision  of January 12, 2001, the DARAB reversed and set aside the PARAD’s ruling. The
16

DARAB ordered DNTDC and all persons acting in its behalf to respect and maintain the respondents
in the peaceful possession and cultivation of the property, and the Municipal Agrarian Reform
Officer (MARO) to enjoin the DNTDC from disturbing and/or molesting the respondents in their
peaceful possession and cultivation of it.

As the PARAD did, the DARAB declared that a tenancy relationship existed between Eugenio and
the respondents, which was not extinguished by the expiration of the five-year term stated in their
lease contracts. Thus, when DNTDC purchased the property, it had been subrogated to the rights
and obligations of the previous landowner pursuant to the provisions of R.A. No. 3844. 17

Unlike the PARAD, however, the DARAB was not convinced that the property had already been
reclassified to non-agricultural uses so as to remove it from the coverage of R.A. No. 6657. With
Administrative Order No. 5, series of 1994 as basis, the DARAB held that the alleged reclassification
of the property did not and could not have divested the respondents of their rights as "deemed
owners" under P.D. No. 27. The DARAB also pointed out that while Davao City Ordinance No. 363,
series of 1982 (adopting the Comprehensive Development Plan of Davao City), reclassified the
property to be within the "urban/urbanizing zone," the DNTDC did not submit the required
certifications from the HLURB, adopting the zoning ordinance, and from the DAR, approving the
conversion to make the reclassification valid.

When the DARAB denied the DNTDC’s motion for reconsideration in its August 28, 2003
resolution,  the DNTDC elevated the case to the CA via a petition for review.
18 19

The Ruling of the CA

In its March 28, 2006 decision,  the CA affirmed in toto the January 12, 2001 decision of the
20

DARAB. The CA similarly declared that the tenancy relationship established between the
respondents and Eugenio was not extinguished by the expiration of the five-year term of their lease
contracts or by the subsequent transfer of the property to DNTDC. The CA noted that both the
DARAB and the PARAD arrived at the same findings and that the DNTDC impliedly admitted in its
pleadings the existence of the tenancy relationship.

The CA was also convinced that the property was still agricultural and was, therefore, covered by
R.A. No. 6657. While the CA conceded that the conversion of the use of lands that had been
reclassified as residential, commercial or industrial, prior to the effectivity of R.A. No. 6657, no longer
requires the DAR’s approval, the CA pointed out that the landowner must first comply with certain
pre-conditions for exemption and/or conversion. Among other requirements, the landowner must
secure an exemption clearance from the DAR. This exemption clearance shall be issued after the
landowner files the certifications issued by the deputized zoning administrator, stating that the land
had been reclassified, and by the HLURB, stating that it had approved the pertinent zoning
ordinance, with both the reclassification and the approval carried out prior to June 15, 1988.

In this case, the CA held that DNTDC failed to secure and present any exemption clearance. The CA
also pointed out that: (1) Davao City Ordinance No. 363, series of 1982, adopting the
Comprehensive Development Plan of Davao City did not substantially show that it had reclassified
the property from agricultural to non-agricultural uses; (2) DNTDC failed to submit during the
proceedings before the PARAD and the DARAB the HLURB certification allegedly approving Davao
City Ordinance No. 363, series of 1982; (3) while DNTDC attached to its motion for reconsideration
of the DARAB’s decision a certification from the HLURB stating that by resolution (Resolution No. R-
39-4) dated July 31, 1980, it approved the Comprehensive Development Plan, yet at the time of the
alleged HLURB approval, the pertinent zoning ordinance - Davao City Ordinance No. 363, series of
1982 - adopting such plan had not yet been enacted; and (4) the HLURB certification that DNTDC
presented referred to a parcel of land subject of another case.

DNTDC filed the present petition after the CA denied its motion for reconsideration  in the CA’s
21

September 5, 2006 resolution. 22

The Petition

In its present petition,  DNTDC argues that the CA seriously erred when it: (1) failed to consider the
23

fact that the respondents violated the compromise agreement; (2) ruled that a tenancy relationship
exists between it and the respondents; and (3) declared that the subject property is agricultural.
24

Directly addressing the CA’s ruling, DNTDC argues that: first, the respondents, in the compromise
agreement, categorically agreed to voluntarily vacate the property upon receipt of the stated financial
assistance. Since the RTC approved the compromise agreement and the respondents had already
received the agreed financial assistance, the CA should have considered these incidents that
immediately bound the respondents to comply with their undertaking to vacate.

Second, no tenancy relationship exists between DNTDC and the respondents. DNTDC maintains
that while a tenancy relationship existed between the respondents and Eugenio, this relationship
was terminated when the MTCC ordered the respondents to vacate the property. It emphasizes that
this MTCC decision that ordered the respondents to vacate the property had already become final
and executory upon the respondents’ failure to seasonably appeal. DNTDC adds that after the
respondents’ lease contract with Eugenio expired and the latter simply allowed the former to
continue occupying the property, the respondents became bound by an implied promise to vacate its
premises upon demand. Thus, when, as the new owner, it demanded the return of the property, the
respondents were obligated to comply with their implied promise to vacate.

Finally, the property is no longer agricultural, contrary to the findings of the DARAB and the CA.
DNTDC points out that the proceedings before the PARAD had sufficiently addressed this issue,
which the CA recognized in the assailed decision. Thus, DNTDC contends that the findings of the
PARAD should prevail over those of the DARAB.

In its reply  to the respondents’ comment, DNTDC additionally argues that the MTCC and the RTC
25

cases are closely intertwined with and relevant to the present case. It points out that Reynaldo and
Liza categorically stated in their petition in the RTC case that they were suing in their own right as
heirs/successors-in-interest of Cesar. Consequently, the spouses Saliga, as represented and
succeeded by Reynaldo and Liza, are bound by the compromise agreement that the latter signed in
the RTC case.

The Case for the Respondents

In their comment,  the respondents argue that the MTCC and the RTC cases do not bear any
26

significance to the present controversy. They point out that the parties in the MTCC and the RTC
cases, aside from DNTDC, were Demetrio Ehara, Jr., Reynaldo and Liza who are undeniably
different from them.
Relying on the ruling of the CA, the respondents also argue that a tenancy relationship exists
between them and DNTDC and that the property is still agricultural. The respondents quoted in
toto the CA’s discussions on these issues to support their position.

The Issues

In sum, the issues for our resolution are: (1) whether the property had been reclassified from
agricultural to non-agricultural uses prior to June 15, 1988 so as to remove it from the coverage of
R.A. No. 6657; (2) whether an agricultural leasehold or tenancy relationship exists between DNTDC
and the respondents; and (3) whether the compromise agreement signed by the respondents’
children in the RTC case binds the respondents.

The Court’s Ruling

We resolve to GRANT the petition.

Preliminary considerations

At the outset, we reiterate the settled rule that only questions of law may be raised in a petition for
review on certiorari under Rule 45 of the Rules of Court.  Questions of facts are not allowed in a
27

Rule 45 petition because this Court is not a trier of facts.  The Court generally accords respect, if not
28

finality, to the factual findings of quasi-judicial bodies, among them is the DARAB, as these bodies
are deemed experts in their respective fields.  The question of the existence of a tenancy
29

relationship intertwined with the question of reclassification requires for its resolution a review of the
factual findings of the agricultural tribunals and of the CA. These are questions we cannot generally
touch in a Rule 45 petition.

Nevertheless, the case also presents a legal question as the issue of tenancy relationship is both
factual and legal. Moreover, the findings of the PARAD conflict with those of the DARAB. These
circumstances impel us to disregard the above general rule and to address both the presented
factual and legal issues in view of their social justice implications and the duty to do justice that this
Court has sworn to uphold.

We now resolve the merits of the petition.

The subject property had been

reclassified as non-agricultural prior
to June 15, 1988; hence, they are no
longer covered by R.A. No. 6657

At the core of the controversy is the questioned reclassification of the property to non-agricultural
uses. This issue is intertwined with and on which depends the resolution of the issue concerning the
claimed agricultural leasehold relationship.

In reversing the PARAD and holding that the property was still agricultural, the DARAB considered
the Comprehensive Development Plan (approved by the HSRC through Board Resolution R-39-4
dated July 31, 1980) and Davao City Ordinance No. 363, series of 1982 (adopting the
Comprehensive Development Plan) as invalid reclassification measures. It gave as reason the
absence of the requisite certification from the HLURB and the approval of the DAR. In the
alternative, and citing P.D. No. 27, in relation with R.A. No. 6657, as basis, the DARAB considered
the alleged reclassification ineffective so as to free the property from the legal effects of P.D. No. 27
that deemed it taken under the government’s operation land transfer (OLT) program as of October
21, 1972.

We differ from, and cannot accept, the DARAB’s position.

We hold that the property had been reclassified to non-agricultural uses and was, therefore, already
outside the coverage of the Comprehensive Agrarian Reform Law (CARL) after it took effect on July
15, 1988.

1. Power of the local government units to

reclassify lands from agricultural to nonagricultural
uses; the DAR approval is not
required

Indubitably, the City Council of Davao City has the authority to adopt zoning resolutions and
ordinances. Under Section 3 of R.A. No. 2264  (the then governing Local Government
30

Code), municipal and/or city officials are specifically empowered to "adopt zoning and
subdivision ordinances or regulations in consultation with the National Planning Commission." 31

In Pasong Bayabas Farmers Asso., Inc. v. Court of Appeals,  the Court held that this power of the
32

local government units to reclassify or convert lands to non-agricultural uses is not subject to the
approval of the DAR.  There, the Court affirmed the authority of the Municipal Council of Carmona to
33

issue a zoning classification and to reclassify the property in dispute from agricultural to residential
through the Council’s Kapasiyahang Bilang 30, as approved by the HSRC.

In the subsequent case of Junio v. Secretary Garilao,  this Court clarified, once and for all, that "with
34

respect to areas classified and identified as zonal areas not for agricultural uses, like those approved
by the HSRC before the effectivity of RA 6657 on June 15, 1988, the DAR’s clearance is no longer
necessary for conversion."  The Court in that case declared the disputed landholding as validly
35

reclassified from agricultural to residential pursuant to Resolution No. 5153-A of the City Council of
Bacolod.

Citing the cases of Pasong Bayabas Farmers Asso., Inc. and Junio, this Court arrived at significantly
similar ruling in the case of Agrarian Reform Beneficiaries Association (ARBA) v. Nicolas. 36

Based on these considerations, we hold that the property had been validly reclassified as non-
agricultural land prior to June 15, 1988. We note the following facts established in the records that
support this conclusion: (1) the Davao City Planning and Development Board prepared the
Comprehensive Development Plan for the year 1979-2000 in order to provide for a comprehensive
zoning plan for Davao City; (2) the HSRC approved this Comprehensive Development Plan through
Board Resolution R-39-4 dated July 31, 1980; (3) the HLURB confirmed the approval per the
certification issued on April 26, 2006;  (4) the City Council of Davao City adopted the
37

Comprehensive Development Plan through its Resolution No. 894 and City Ordinance No. 363,
series of 1982;  (5) the Office of the City Planning and Development Coordinator, Office of the
38

Zoning Administrator expressly certified on June 15, 1995 that per City Ordinance No. 363, series of
1982 as amended by S.P. Resolution No. 2843, Ordinance No. 561, series of 1992, the property
(located in barangay Catalunan Pequeño) is within an "urban/urbanizing" zone;  (6) the Office of the
39

City Agriculturist confirmed the above classification and further stated that the property is not
classified as prime agricultural land and is not irrigated nor covered by an irrigation project as
certified by the National Irrigation Administration, per the certification issued on December 4,
1998;  and (7) the HLURB, per certification dated May 2, 1996,  quoted the April 8, 1996 certification
40 41

issued by the Office of the City Planning and Development Coordinator stating that "the Mintal
District which includes barangay Catalunan Pequeño, is identified as one of the
‘urbaning [sic] district centers and priority areas and for development and investments’ in Davao
City."

We note that while the DNTDC attached, to its motion for reconsideration of the DARAB’s decision,
the May 2, 1996 certification of the HLURB, both the DARAB and the CA simply brushed this aside
on technicality. The CA reasoned that the certificate was belatedly presented and that it referred to a
parcel of lot subject of another case, albeit, similarly involving DNTDC, as one of the parties, and
property located within the same district.

We cannot support this position of the CA for the following reasons: first, while, generally, evidence
submitted past the presentation-of-evidence stage is no longer admissible and should be
disregarded for reasons of fairness, strict application of this general rule may be relaxed. By way of
exception, we relax the application of the rules when, as here, the merits of the case call for, and the
governing rules of procedure explicitly command, a relaxation. Under Section 3, Rule I of the 1994
DARAB New Rules of Procedure (the governing DARAB rules), the DARAB shall not be bound by
technical rules of procedure and evidence provided under the Rules of Court, which shall not apply
even in a suppletory character, and shall employ all reasonable means to ascertain facts of every
case.

Time and again, this Court has held that "rules of procedure ought not to be applied in a very rigid,
technical sense, for they are adopted to help secure, not override, substantial justice."  Thus, while
42

DNTDC, in this case, attached the May 2, 1996 HLURB certification only in its motion for
reconsideration, the DARAB should have considered it, especially in the light of the various
documents that DNTDC presented to support its position that the property had already been
reclassified as non-agricultural land prior to June 15, 1988.

And second, granting arguendo that the May 2, 1996 HLURB certification was issued in relation to

another case that involved a different parcel of land, it is not without value. The clear-cut
declarations of the HLURB in the certification, which the DARAB and the CA should have considered
and which we find sufficiently convincing, show that Catalunan Pequeño (where the property lies) is
classified as within the urbanizing district centers of Davao City. Thus, for all intents and purposes,
the May 2, 1996 HLURB certification satisfied the purpose of this requirement, which is to establish
by sufficient evidence the property’s reclassification as non-agricultural land prior to June 15, 1988.

Considering that the property is no longer agricultural as of June 15, 1988, it is removed from the
operation of R.A. No. 6657. By express provision, the CARL covers only those public or private
lands devoted or suitable for agriculture,  the operative word being agricultural. Under Section 3(c)
43

of R.A. No. 6657, agricultural lands refer to lands devoted to agricultural activity and not otherwise
classified as mineral, forest, residential, commercial, or industrial land.  In its Administrative Order
44

No. 1, series of 1990,  the DAR further explained the term "agricultural lands" as referring to "those
45

devoted to agricultural activity as defined in R.A. 6657 and x x x 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." If only to emphasize, we reiterate – only those parcels of land specifically classified
as agricultural are covered by the CARL; any parcel of land otherwise classified is beyond its ambit.

2. No vested rights over the

property accrued to the
respondents under P.D. No. 27
Under P.D. No. 27, tenant-farmers of rice and corn agricultural lands are "deemed owners" of the
land that they till as of October 21, 1972. Under these terms, vested rights cannot simply be taken
away by the expedience of adopting zoning plans and ordinances reclassifying an agricultural land
to an "urban/urbanizing" area.

We need to clarify, however, that while tenant farmers of rice and corn lands are "deemed owners"
as of October 21, 1972 following the provisions of P.D. No. 27, this policy should not be interpreted
as automatically vesting in them absolute ownership over their respective tillage. The tenant-farmers
must still first comply with the requisite preconditions, i.e., payment of just compensation and
perfection of title before acquisition of full ownership.
46

In Del Castillo v. Orciga,  the Court explained that land transfer under P.D. No. 27 is effected in two
47

(2) stages: first, the issuance of a certificate of land transfer (CLT); and second, the issuance of an

emancipation patent (EP). The first stage - issuance of the CLT - serves as the government’s
recognition of the tenant farmers’ inchoate right as "deemed owners" of the land that they till.  The
48

second stage – issuance of the EP – perfects the title of the tenant farmers and vests in them
absolute ownership upon full compliance with the prescribed requirements.  As a preliminary step,
49

therefore, the CLT immediately serves as the tangible evidence of the government’s recognition of
the tenant farmers’ inchoate right and of the subjection of the particular landholding to the
government’s OLT program.

In this case, the record does not show that the respondents had been issued CLTs. The CLT could
have been their best evidence of the government’s recognition of their inchoate right as "deemed
owners" of the property. Similarly, the record does not show that the government had placed the
property under its OLT program or that the government, through the MARO, recognized the
respondents as the actual tenants of the property on the relevant date, thereby sufficiently vesting in
them such inchoate right.

Consequently, this Court can safely conclude that no CLTs had ever been issued to the respondents
and that the government never recognized any inchoate right on the part of the respondents as
"deemed owners" of the property. In effect, therefore, no vested rights under P.D. No. 27, in relation
to R.A. No. 6657, accrued to the respondents such that when the property was reclassified prior to
June 15, 1988, it did not fall, by clear legal recognition within the coverage of R.A. No. 6657.

Interestingly, the contract of lease executed between Eugenio and the respondents shows that the
property was primarily planted with coconut and coffee trees and, secondarily with several fruit-
bearing trees. By its explicit terms, P.D. No. 27 applies only to private agricultural lands primarily
devoted to rice and corn production. Thus, the property could never have been covered by P.D. No.
27 as it was not classified as rice and corn land.

For these reasons, we hold that the property is no longer agricultural and that the CA erred when it
affirmed the DARAB’s ruling that the property – notwithstanding the various documents that
unquestionably established the contrary – was agricultural .

No tenancy relationship exists between

DNTDC and the respondents; the
tenancy relationship between the
respondents and Eugenio ceased
when the property was reclassified

In Solmayor v. Arroyo,  the Court outlined the essential requisites of a tenancy relationship, all of
50

which must concur for the relationship to exist, namely:

 1. The parties are the landowner and the tenant;

2. The subject is agricultural land;

3. There is consent;

4. The purpose is agricultural production;

5. There is personal cultivation; and

6. There is sharing of harvests.

The absence of any of these requisites does not make an occupant a cultivator, or a planter, a de
jure tenant.  Consequently, a person who is not a de jure tenant is not entitled to security of tenure
51

nor covered by the land reform program of the government under any existing tenancy laws. 52

In this case, we hold that no tenancy relationship exists between DNTDC, as the owner of the
property, and the respondents, as the purported tenants; the second essential requisite as outlined
above – the subject is agricultural land – is lacking. To recall, the property had already been
reclassified as non-agricultural land. Accordingly, the respondents are not de jure tenants and are,
therefore, not entitled to the benefits granted to agricultural lessees under the provisions of P.D. No.
27, in relation to R.A. No. 6657.

We note that the respondents, through their predecessors-in-interest, had been tenants of Eugenio
as early as 1965. Under Section 7 of R.A. No. 3844, once the leasehold relation is established, the
agricultural lessee is entitled to security of tenure and acquires the right to continue working on the
landholding. Section 10 of this Act further strengthens such tenurial security by declaring that the
mere expiration of the term or period in a leasehold contract, or the sale, alienation or transfer of the
legal possession of the landholding shall not extinguish the leasehold relation; and in case of sale or
transfer, the purchaser or transferee is subrogated to the rights and obligations of the
landowner/lessor. By the provisions of Section 10, mere expiration of the five-year term on the
respondents’ lease contract could not have caused the termination of any tenancy relationship that
may have existed between the respondents and Eugenio.

Still, however, we cannot agree with the position that the respondents are the tenants of
DNTDC.  This is because, despite the guaranty, R.A. No. 3844 also enumerates the instances that
1âwphi1

put an end to the lessee’s protected tenurial rights. Under Section 7 of R.A. No. 3844, the right of the
agricultural lessee to continue working on the landholding ceases when the leasehold relation is
extinguished or when the lessee is lawfully ejected from the landholding. Section 8  enumerates the
53

causes that terminate a relationship, while Section 36 enumerates the grounds for dispossessing the
agricultural lessee of the landholding. 54

Notably, under Section 36(1) of R.A. No. 3844, as amended by Section 7 of R.A. No.
6389,  declaration by the department head, upon recommendation of the National Planning
55

Commission, to be suited for residential, commercial, industrial or some other urban purposes,
terminates the right of the agricultural lessee to continue in its possession and enjoyment. The
approval of the conversion, however, is not limited to the authority of the DAR or the courts. In the
case of Pasong Bayabas Farmers Asso., Inc. v. Court of Appeals,  and again in Junio v. Secretary
56

Garilao,  the Court essentially explained that the reclassification and conversion of agricultural lands
57

to non-agricultural uses prior to the effectivity of R.A. No. 6657, on June 15, 1988, was a coordinated
effort of several government agencies, such as local government units and the HSRC.
In effect, therefore, whether the leasehold relationship between the respondents and Eugenio had
been established by virtue of the provisions of R.A. No. 3844 or of the five-year lease contract
executed in 1981, this leasehold relationship had been terminated with the reclassification of the
property as non-agricultural land in 1982. The expiration the five-year lease contract in 1986 could
not have done more than simply finally terminate any leasehold relationship that may have prevailed
under the terms of that contract.

Consequently, when the DNTDC purchased the property in 1995, there was no longer any tenancy
relationship that could have subrogated the DNTDC to the rights and obligations of the previous
owner. We, therefore, disagree with the findings of the CA, as it affirmed the DARAB that a tenancy
relationship exists between DNTDC and the respondents.

The respondents are not bound by

the November 29, 2001 compromise
agreement before the RTC

The respondents argue that the compromise agreement of Demetrio Ehara, Jr., Reynaldo and Liza –
entered into with DNTDC on November 29, 2001 and approved by the RTC on December 7, 2001 –
does not and cannot bind them as they are different from the former.

We agree for two plain reasons.

First, the respondents’ position on this matter finds support in logic. Indeed, as the respondents
have well pointed out and contrary to DNTDC’s position, this similarity in their last names or familial
relationship cannot automatically bind the respondents to any undertaking that their children in the
RTC case had agreed to. This is because DNTDC has not shown that the respondents had
expressly or impliedly acquiesced to their children's undertaking; that the respondents had
authorized the latter to bind them in the compromise agreement; or that the respondents' cause of
action in the instant case arose from or depended on those of their children in the cases before the
MTCC and the RTC. Moreover, the respondents' children and DNTDC executed the compromise
agreement in the RTC case with the view of settling the controversy concerning only the issue of
physical possession over the disputed 2.5574-hectare portion subject of the ejectment case before
the MTCC.

And second, the issues involved in the cases before the MTCC and the RTC are different from the
issues involved in the present case. In the ejectment case before the MTCC, the sole issue was
possession de Jure, while in the prohibition case before the RTC, the issue was the propriety of the
execution of the decision of the MTCC in the ejectment case. In contrast, the issues in the present
controversy that originated from the PARAD boil down to the respondents' averred rights, as tenants
of the property.

With these considerations, therefore, whatever decision that the MTCC in the ejectment case arrived
at, which was limited to possession de jure of the disputed 2.5574-hectare portion of the property,
could not have affected any right that the respondents may have had, as tenants, over the property.
Consequently, any agreement that the respondents' children had entered into in the R TC case
could not have bound the respondents in the present controversy as the respondents' claim over the
property and their alleged right to continue in its possession clearly go beyond mere possession de
Jure, whether of the 2.5574-hectare portion of the property that was subject of the ejectment case
before the MTCC or of the entire property in the present case.

WHEREFORE, in view of these considerations, we hereby GRANT the petition, and

accordingly REVERSE and SET ASIDE the decision dated March 28, 2006 and the resolution dated
September 5, 2006 of the Court of Appeals in CA-G.R. SP No. 79377. We REINSTATE the decision
dated July 6, 1998 and the resolution dated September 8, 1998 of the PARAD in DARAB Case No.
XI-1418-DC-98.

SO ORDERED.

ARTURO D. BRION
Associate Justice