GR 229983 2019

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SECOND DIVISION

FARMER~BENEFICIARIES G.R. No. 229983


BELONGING TO THE
SAMAHANG MAGBUBUKID Present:
NG BAGUMBONG, JALAJALA,*
RIZAL,** represented by their
President, TORIBIO M. CARPIO, Chairperson,
MALABANAN, PERLAS-BERNABE,
Petitioners, CAGUIOA,
J. REYES, JR., and
- versus - LAZARO-JAVIER, JJ

HEIRS OF JULIANA
MARONILLA, represented by
ATTY. RAMON M. Promulgated:
MARONILLA,

x---------------------------~~~~~~~~-~~~: ____________~_!M,J~1~--------x
DECISION

PERLAS-BERNABE, J.:

Before the Court is a petition for review on certiorari 1 assailing the


Decision2 dated February 20, 2017 of the Court of Appeals (CA) in CA-G.R.
SP No. 108543, which affirmed DARCO Order No. EX-0808-372, Series of
"Jala-jala" in some parts of the rollo.
•• Only the following farmer-beneficiaries signed the Special Power of Attorney (rollo, pp. 47-49) dated
April 7, 2017 authorizing their averred President, Toribio M. Malabanan, to represent them in the
instant petition, namely: Rodrigo D. Atienza, Eutiquiano R. Austria, Pedro E. Barrion, Antonia P.
Bobadilla, Fernando B. Bonita, Luisito L. Bonita, Mateo P. Bonita, Marciano B. Cabrera, Wilfred B.
Catindig, Celso D. Endon, German M. Endon, Ester M. Enriquez, Victorino M. Enriquez, Ernesto C.
Garin, Clemente P. Lara, Jose S. Lizardo, Dionisio B. Llanto, Wilfredo 0. Magpantay, Danilo B.
Magpantay, Rodrigo S. Manguiat, Soriano D. Malabanan, Toribio M. Malabanan, Andres G.
Manguiat, Fabian C. Manguiat, Gregorio L. Manguiat, Juanito G. Manguiat, Rodrigo G. Manguiat,
Francisco M. Maray, Isagani Maray, Benjamin G. Maunahan, Jay B. Maunahan, Nicasio G.
Maunahan, Nimesio G. Maunahan, Romeo G. Maunahan, Emilio C. Panganiban, Fidel C. Pedrigoza,
Pablo C. Tuiza, Rizal P. Tuiza, Juan 0. Vivas, Manolito 0. Magpantay, and Mario 0. Vivas.
Id. at 8-A to 45.
ld. at 51--66. Penned by Associate Justice Danton Q. Bueser with Associate Justices Apolinario D.
Bruselas, k and Renato C. Francisco, concurring.
Decision 2 G.R. No. 229983

2008 3 dated August 29, 2008 issued by the Department of Agrarian Reform
(DAR) Secretary, exempting a 447.4025-hectare (ha.) portion of the subject
lands from the coverage of the Comprehensive Agrarian Reform Program
(CARP), 4 conditioned on the payment of disturbance compensation to the
affected tenants.

The Facts

Juliana Maronilla (Juliana) is the registered owner of a vast tract of


land with a total area of 723.9428 has. 5 situated in Brgy. Bagumbong,
Jalajala, Rizal and Brgy. Casinsin, Pakil, Laguna, covered by Transfer
Certificates of Title (TCT) Nos. 164410 to 1644206 (inclusive) and 1644307
to 164432 8 (inclusive;9 collectively, subject lands). Following the
implementation of Presidential Decree No. (PD) 27, 10 portions of the lands
covered by TCT Nos. 164416 to 164420 (inclusive), 164430, and 164432
were placed under the government's Operation Land Transfer (OLT)
program, and thus, certificates of land transfer (CL Ts) were issued in favor
of petitioners Farmer-Beneficiaries belonging to the Samahang Magbubukid
ng Bagumbong, Jalajala, Rizal (petitioners) 11 and other farmer-beneficiaries
(FBs).

On January 14, 1986, the President of the Philippines issued a


memorandum directing the issuance of emancipation patents (EPs) to FBs of
the OLT program. 12 Accordingly, EPs over the subject lands were issued by
the DAR in favor of the FBs, which were thereafter registered (EP titles)

Id. at 91-100. Penned by DAR Secretary Nasser C. Pangandaman.


4 Proclamation No. 131, entitled "INSTITUTING A COMPREHENSIVE AGRARIAN REFORM PROGRAM" (July
22, 1987).
See rollo, pp. 94-95.
6
TCT Nos. 164410, 164412, and 164413 were not attached to the petition, which only included TCT
Nos. I 64411 and 164414 to 164420, among others, as annexes (see id. at I 06-131 ).
Records show that the lands covered by TCT Nos. 164411 and 164414 to 164420 (inclusive) were
among those foreclosed by the Philippine National Bank on September 25, 1973 (see id. at 52). On
November 13, 1973, Juliana assigned the mortgaged properties to Alta Tierra Resources, Inc. (Alta
'
Tierra; see id. at 53), which eventually redeemed the same. Despite the assignment, the properties
remained in the name of Juliana. The parties eventually cancelled the assignment in Alta Tierra's favor
on October 27, 1993. ·
Id. at I 32-134 (including reverse portions).
Id. at 135-139 (including reverse portions).
The lands covered by TCT Nos. 164430 and 164432, among others, were mortgaged to and foreclosed
by the Development Bank of the Philippines (DBP; see id. at 133.). The owner's copy of the said TCTs
were lost, and thereafter, cancelled and declared null and void, resulting in the issuance of TCT Nos.
(164430) M-10897 and (164432) M-13551 in lieu thereof(see id. at 133 and 136). Subsequently, DBP
executed a quitclaim over the foreclosed properties in favor of Juliana (see id. at 134 [reverse portion]).
9
TCT No. 164431 was likewise not attached to the petition, but appeared to have been sold already to
Alta Tierra Resources, Inc. (see id. at 95).
JO Entitled "DECREEING THE EMANCIPATION OF TENANTS FROM THE BONDAGE OF THE SOIL,
TRANSFERRING TO THEM THE OWNERSHIP OF THE LAND THEY TILL AND PROVIDING THE INSTRUMENTS
AND MECHANISM THEREFOR," approved on October 21, 1972.
11
See rollo, p. 52.
12 See id. at 53. While a copy of the said Memorandum was not attached to the petition, it appears that it
authorized the then Ministry of Agrarian Reform to issue/distribute EPs to FBs regardless of
amortization payments. This can be inferred from Ministry of Agrarian Reform Ministry Memorandum
Circular No. 5, Series of 1986, Re: AUTI--IORITY TO ISSUE/DISTRIBUTE EMANCIPATION PATENTS TO
FARMER-BENEFICIARIES REGARDLESS OF AMORTIZATION PAYMENTS dated May 7, 1986.
Decision 3 G.R. No. 229983

with the Register of Deeds of Rizal (RD-Rizal) between October 24, 1988
and February 22, 1994 that partially cancelled Juliana's titles. 13

On March 13, 1989, Juliana voluntarily offered the subject lands


(VOS) for sale to the DAR pursuant to the CARP. 14 The DAR acquired the
remaining portions undistributed under PD 27, and issued certificates of land
ownership award (CLOAs) in favor of the FBs. 15 The corresponding titles
(CLOA titles) were issued in the latter's favor between December 15, 1993
and October 27, 1995, which partially cancelled Juliana's titles. 16

Sometime in March 1996, Juliana passed away. 17 On November 26,


1996, her heirs, herein respondents, represented by Atty. Ramon M.
Maronilla (respondents), filed an application for retention 18 of a 60-ha.
portion of the subject lands covered by TCT Nos. 164419 and 164420
located in Brgy. Casinsin, Pakil, Laguna. 19 The application was granted in an
Order2° dated December 12, 1997. Petitioners sought the recall/revocation of
the said Order insofar as the parcels of land already apportioned to them, but
the same was denied in an Order2 1 dated August 15, 2008 which, however,
reduced the retention area from 60 to 52 has. Petitioners' appeal to the
Office ofthe President (O.P.), docketed as O.P. Case No. 08-K-440, was still
pending when the instant petition was filed. 22

Meanwhile, respondents filed an Application for Exemption


Clearance from CARP Coverage (exemption case) of a 476.5006-ha. 23
13
The RD-Rizal issued TCTs in favor of the FBs on the following dates:
1. October,24, 1988 See id. at 116-117, 119 (reverse portion) to 120, 122 (reverse portion) to
123, 125 (reverse portion) to 127, and 129 (reverse portion) and 130
, (reverse portion)
2. December 12, 1988 See id. at 133, and 136-137 (including reverse portion), and 138
(including reverse portion)
3. September 11, I 990 See id. at 127, 131, and 138 (reverse portion)
4. June 28, 1993 See id. at I 39
5. February 24, I 994 See id.
14
See id. at 140.
15
See id. at 53.
16
The RD-Rizal issued TCTs in favor of the FBs over the lands covered by the following titles:
I. TCT No. 164411 December 21, 1994 (see id. at 108, reverse portion).
2. TCT No. 164414 December 21, 1993 (see id. at 110-111 ); February 24, 1994 (see id. at
I I I);
December 14, 1994 (see id. at 111, reverse portion).
3. TCT No. 164415 December 15, 1993 (see id. at 113); February 24, I 994 (see id. at 113,
reverse portion).
4. TCT No. 164416 February 24, 1994 (see id. at 117).
5. TCT No. 164420 the portion reflecting the date of the inscription was not included in the
photocopy of the said title attached to the records (see id. at 129).
6. TCT No. (164430) October 27, 1995 (see id. at 134).
M-10897
7. TCT No. (164432) March 25, 1994 (see id. at 139), February 22, 1994, June 29, 1994, and
M-13551 December 14, 1994 (see id. at 139, reverse portion).
17
See id. at 54.
18
See id.
19
See id. at 146 and 151.
20 Id. at 146-152. Issued by Regional Director Eugenio D. Bernardo.
21
Not attached to the rollo.
22 See rollo, p. 55. There is no information whethe,r a decision has been rendered therein as of this date.
23
See id. at 91.
'
Decision 4 G.R. No. 229983

portion of the subject lands on the basis of Department of Justice (DOJ)


Opinion No. 44, Series of 1990, 24 as implemented by DAR Administrative
Order (AO) No. 6, Series of 1994. 25 They claimed that the lands had been
classified as mineral, forest, residential, institutional, commercial or agro-
industrial as early as July 11, 1981 in the Land Use Plan (LUP) of the
Municipality of Jalajala, and in accordance with Zoning Ordinance No. 17,26
approved on December 2, 1981 by the Human Settlements Regulatory
Commission (HSRC), precursor of the Housing and Land Use Regulatory
Board (HLURB), and as such, cannot be considered as agricultural lands
within the contemplation of Republic Act No. (RA) 6657 27 or PD 27. 28 In
support of the application, respondents submitted, among others, an HLURB
Certification dated May 24, 1996, stating that per the approved LUP of
Jalajala, the subject lands are zoned as follows:

TCTNo. Lot PSD Area Zoning/Land Use


No. No. [(Ha.)]
164410 1-A 56828 66.6220 Forest Conservation
164411 1-B 56828 59.1061 Forest Conservation/ !Tree/
Diversified Crops
164412 1-C 56828 56.4944 Forest Conservation/ Tree/
Diversified Crops
164413 1-D 56828 66.8885 Forest Conservation/
Diversified Crops
164414 1-E 56828 53.0896 Forest Conservation/
Agro-industrial/
Riceland
164415 1-F 56828 50.2014 Forest Conservation/
Agro-industrial/ Tree/
Diversified Crops
164416 1-G 56828 52.2799 Riceland/
Agro-industrial/
Residential/ Institutional
164417 1-H 56828 43.0780 Riceland/ Agro-industrial/
Forest Conservation/ Residential/
Institutional
164418 1-I 56828 45.3631 Riceland/ Residential/
Institutional
164419 1-J 56828 49.7049 Riceland/ Residential/
Institutional
164420 1-K 56828 56.1463 Riceland/ Residential

(164430) 3-J 56828 61.7208 Agro-industrial/


422059 Forest Conservation/ Riceland

24
Issued by then Secretary of Justice Franklin M. Drilon on March 16, 1990.
25
Entitled "GUIDELINES FOR THE ISSUANCE OF EXEMPTION CLEARANCES BASED ON SEC. 3 (c) OF RA
6657 AND THE DEPARTMENT OF JUSTICE (DOJ) OPINION No. 44[,] SERIES OF 1990," issued by then
DAR Secretary Ernesto D. Garilao on May 27, 1994.
26
Referred to as "HSRC Resolution No. R-36" dated December 2, 1981 in DARCO Order No. EX-0808-
372, Series of2008 dated August 29, 2008; rollo, p. 93.
27
Entitled "AN ACT INSTITUTING A COMPREHENSIVE AGRARIAN REFORM PROGRAM TO PROMOTE SOCIAL
JUSTICE AND INDUSTRIALIZATION, PROVIDING THE MECHANISM FOR ITS IMPLEMENTATION, AND FOR
OTHER PURPOSES," otherwise known as the "COMPREHENSIVE AGRARIAN REFORM LAW OF 1988,"
approved on June 10, 1988.
28
Rollo, pp. 55-56.
Decision 5 G.R. No. 229983

(164431) 3-K 56828 51.7113 Riceland/ Agro-industrial


422059
(164432) 3-L 56828 63.2478 Riceland/ Residential 29
M-13551

Respondents likewise submitted a Certification dated June 17, 1996


from the National Irrigation Administration (NIA) that the lands covered
by TCT Nos. 164410 to 164413 (inclusive) are not: (a) irrigated by any
national irrigation system; (b) covered by communal irrigation system within
the Province of Rizal; and (c) part of any NIA rehabilitation/expansion of
irrigation project, or any proposed NIA irrigation development/project with
firm financing. 30 The DAR Center for Land Use, Policy, Planning and
Implementation conducted an ocular inspection of the area, 31 accompanied
by the Municipal Agrarian Reform Officer and the representatives of the
parties, 32 where the following were npted:
I

TCTNo. Lot An: a Per Remarks


No. Titlt (Ha.)
1 164410 1-A 66. 6220 Forest Conservation.
Covered under VOS.
Planted with trees, root
crops, etc.
2 164411 1-B 59. 1061 Forest Conservation.
Covered under VOS.
Planted with root crops,
I banana.
3 164412 1-C . 56.14944 Forest Conservation.
Diversified Crops.
4 164413 1-D 66. 8885 Forest Conservation.
Diversified Crops.
5 164414 1-E 53. 0896 Forest Conservation with
Agro-industrial. Some
portion is riceland. Covered
under VOS and OLT.
6 164415 1-F 50.2014 Combination of Forest
Conservation, Agro-
industrial, Tree and
Diversified Crops. Covered
under VOS and OLT.
7 164416 1-G 52. 2799 Majority of the lot is
riceland with a little portion
of [Agro-industrial] and
Residential. Covered under
VOSandOLT.
8 164417 1-H 43.0780 Riceland and Agro-
' industrial. A little portion of
Residential. Covered under
OLT.

29
See id. at 92-93.
30
See id. at 93.
31
See id. at 56.
32
See id. at 94.
Decision 6 G.R. No. 229983

9 164418 1-I 45.3631 Riceland with irrigation


canal. Covered under OLT.
Planted with banana, mango,
root crops like camote, okra.
With shrubs and grasses.
Some portion i9 Residential.
10 164419 1-J 49.7049 Riceland, mango trees.
Covered under OLT.
11 164420 1-K 56.1463 Riceland and Residential.
Covered under OL T. Planted
with banana, mango, root
crops like patola.
12 (164430) 3-J 61.7208 Agro-industrial with a little
422059 portion of riceland. Covered
under OLT.
13 (164431) 3-K [51.7113] Riceland. Covered under
422059 OLT. Sold to Alta Tierra
Resources, Inc.
14 (164432) 3-L 63.2478 Riceland and Residential.
M-13551 Covered under VOS. With
mango trees.
723.9428 33

Petitioners intervened, 34 essentially averring that the zoning ordinance


did not actually divest the subject lands of their original classification as
agricultural, both in actual use and their nature; hence, they are not excluded
or exempt from the operation of PD 2 7 or the CARP. 35 They further averred
that assuming that the zoning had the effect of reclassifying the subject lands
to non-agricultural lands, the same will not affect the coverage of the
properties under the OL T program, considering that they had been devoted
to rice and corn since October 21, 1972. 36

Subsequently, the Exemption C01mnittee recommended the


exemption of a 44 7.4025-ha. portion of the subject lands from CARP
coverage on the basis of HSRC Resolution No. 36, Series of 1981, which
provided the classification of the subject lands as tabularized above. 37 It
further recommended the cancellation of EPs 38 over the lands covered by
TCT Nos. 164410, 164414, and 164415, as the same were found to be:
(a) classified as Forest/Fore st Conservation; ( b) fully covered by forest trees
with no traces of agricultural activities; and (c) within the slopes of the
mountain; hence, outside the coverage of PD 2 7 pursuant to which the EPs
were issued. 39 However, it recommended the denial of the application for

33
See id. at 94-95.
34
See Petition for Intervention Controve1ting the Application for Exemption Filed by the Heirs of Juliana
Maronilla dated May 7, 2007; id. at 154-172.
35
See id. at 156.
36
See id. at 159.
37
See id. at 96-97.
38 A review of the records show that TCT No. 164410 is fully covered by EPs (see id. at 94), while the
copy ofTCT Nos. 164414 and 164415 attached to the petition show that they are covered by CLOAs
(see id. at 110-111; including reverse portion, and 113; including reverse portion).
39
See id. at 97-98.
Decision 7 G.R. No. 229983

exemption of a 29.0981 40 hectare portion of the lands covered by TCT Nos.


164417, (164430) M-10897, and (164432) M-13551 that were found to be
ricelands already covered by EPs. 41 Its findings are hereunder tabularized:

TCT Lot Area Per Area Recommended Bases/Reasons


No. No. Title Applied for Exemption
(Ha.) (Ha.) (Ha.)
164410 1-A 66.6220 66.6220 66.6220 HSRC
Resolution No.
' 36, Series of
1981.
164411 1-B 59.1061 59.1061 59.1061 HSRC
Resolution No.
36, Series of
1981.
164412 1-C 56.4944 56.4944 56.4944 HSRC
Resolution No.
36, Series of
1981.
164413 1-D 66.8885 66.8885 66.8885 HSRC
Resolution No.
36, Series of
1981.
164414 1-E 53.0896 44.8596 44.8596 HSRC
Resolution No.
36, Series of
1981.
164415 1-F 50.2014 41.6364 41.6364 HSRC
Resolution No.
36, Series of
1981.
164416 1-G 52.2799 3.7399 3.7399 HSRC
Resolution No.
36, Series of
1981.
164417 1-H 43.0780 17.2879 15.6938 1.5941 hectare
riceland issued
with EPs, not
exempted.
HSRC
Resolution No.
36, Series of
1981.

40 Based on DARCO Order No. EX-0808-372, the DAR Secretary denied the application for exemption
of the remaining "29 .9081" has. of the subject portions (see id. at 99). It appears, however, that this
figure is erroneous, considering that the Exemption Committee's recommendation, which was adopted
by the DAR Secretary, was to deny the application of the "29.0981" ha. of the subject portions broken
down as follows (see id. at 98):
' Lot No. Area (Ha)
1-H 1.5941
~
3-J 16.7959
3-L 10.7081
29.0981
See also id. at 97-98.
41 See id. at 97-99.
Decision 8 G.R. No. 229983

164418 1-1 45.3631 12.8800 12.8800 HSRC


Resolution No.
36, Series of
1981.
164419 1-J 49.7049 11.4575 11.4575 HSRC
Resolution No.
36, Series of
1981.
164420 1-K 56.1463 28.0450 28.0450 HSRC
Resolution No.
36, Series of
1981.
(164430) 3-J 61.7208 49.7508 32.9549 16.7959
422059 hectare
riceland issued
with EPs, not
exempted.
HSRC
Resolution No.
36, Series of
1981.
(164432) 3-L 63.2478 17.7325 7.0244 10.2081
M-13551 hectare
riceland issued
with EPs, not
exempted.
HSRC
Resolution No.
3o, Series of
1981.
723.9428 476.5006 447.402542

The DAR Secretary Ruling

On August 29, 2008, the DAR Secretary issued DARCO Order No.
EX-0808-372, Series of 2008 43 (Exemption Order) adopting the
recommendation of the Exemption Committee, thereby: (a) granting
exemption of a 447.4025-ha. portion of the subject lands (subject portions)
from CARP coverage, conditioned on the payment of disturbance
compensation to the affected tenants within sixty (60) days from notice of
the Exemption Order; and ( b) denying the application for exemption of the
remaining 29.0981 has. ricelands already covered by EPs. 44

Petitioners moved for reconsideration, 45 which was denied in DARCO


Order No. EX(MR)-0904-107, Series of 2009 46 dated April 1, 2009.

42
See id. at 97.
43
Id.at91-100.
44
See id. at 98-99.
45
See Motion for Reconsideration dated September 23, 2008; id. at 196-204.
46
Id. at 101-105.


Decision 9 G.R. No. 229983

Unperturbed, petitioners filed a petition for review47 with the CA,


docketed as CA-G.R. SP No. 108543, challenging, among others: (a)
respondents' right to apply for CARP exemption as Juliana had no more
propriety right to the subject lands after voluntarily offering the same for
sale to the DAR for CARP purposes; 48 and ( b) the jurisdiction of the DAR
Secretary to nullify petitioners' EP and CLOA titles on the ground that the
same falls within the competence of the Department of Agrarian Reform
Adjudication Board (DARAB). 49

The CA Ruling

In a Decision50 dated February 20, 2017, the CA upheld the


jurisdiction of the DAR Secretary to nullify petitioners' EP and CLOA titles
in accordance with present DAR implementing rules, 51 and affirmed the
DAR Secretary's ruling that the lands covered by the Exemption Order are
outside the coverage of PD 27 and the CARP as they have been classified as
agro-industrial, residential, institutional, or forest/forest conservation. 52

The Issues Before the Court


t

The essential issues for the Court's resolution are whether or not the
CA erred:

(1) in upholding the DAR Secretary's jurisdiction (a) to take


cognizance of respondents' application for CARP exemption, and (b) to
nullify petitioners' EP and CLOA titles covering the exempt portions; and

(2) in excluding the subject portions from CARP coverage.

The Court's Ruling

A. JURISDICTION OF THE DAR SECRETARY OVER APPLICATIONS FOR


EXEMPTION PURSUANT TO DOJ OPINION No. 44, SERIES OF 1990.

It is settled that jurisdiction over the subject matter is conferred by


law. The determination of the land's classification as agricultural or non-
agricultural (e.g., industrial, residential, commercial, etc.) and, in tum,

47
Id. at 67-90. Pated May 15, 2009.
48
See id. at 80-82.
49
See id. at 83-84.
50
Id. at 51-66.
51
See id. at 60-62.
52 See id. at 64.
Decision 10 G.R. No. 229983

whether or not the land falls under agrarian reform exemption, must be
preliminarily threshed out before the DAR, 53 particularly, the DAR
Secretary, 54 pursuant to DAR AO No. 6, Series of 1994. 55 Verily, issues of
exclusion or exemption partake the nature of Agrarian Law Implementation
(ALI) cases which are well within the competence and jurisdiction of the
DAR Secretary. Towards this end, the latter is ordained to exercise his legal
mandate of excluding or exempting a property from CARP coverage based
on the factual circumstances of each case and in accordance with the law and
applicable jurisprudence. Thus, considering too his technical expertise on the
matter, courts cannot simply brush aside his pronouncements regarding the
status of the land in dispute, i.e., as to whether or not it falls under CARP
coverage. 56

DAR AO No. 6, Series of 1994 vests in the DAR Secretary the


authority to grant or deny the issuance of exemption clearances on the basis
of Section 3 (c) of RA 6657, as amended, and DOJ Opinion No. 44, Series
of 1990.

Section 3 (c) of RA 6657, as amended defines agricultural land, thus:

(c) Agricultural Land refers to land devoted to agricultural activity


as defined in this Act and not classified as mineral, forest, residential,
commercial or industrial land. (Underscoring supplied)

On the other hand, DOJ Opinion No. 44, Series of 1990 provides that
all lands that have already been classified as commercial, industrial or
residential before June 15, 1988 no longer need any conversion clearance
from the DAR in order to be exempt from CARP coverage. 57 However, an
exemption clearance from the DAR, pursuant to DAR AO No. 6, Series of
1994, is still necessary to confirm or declare their exempt status. 58

53 See DAR v. CA, 718 Phil. 232, 248 (2013). See also Section 2, Rule I of DAR AO No. 03, Series of
2003, Re: 2003 Rules for Agrarian Law Implementation Cases, known as the "2003 RULES OF
PROCEDURE FOR ALI CASES" (2003 ALI Rules), issued on January 16, 2003.
54
Under DAR AO No. 6, Series of 1994, the application is filed with the proper DAR Regional Office
which shall thereafter conduct a joint investigation with the duly authorized representatives of the
Provincial and Municipal Offices of the DAR that have jurisdiction over the property. The
investigation report shall then be forwarded to the Regional Director who shall prepare the Order for
denial or grant of the exemption clearance. The exemption folder, together with the draft order, shall,
in turn, be forwarded to the legal Affairs Office of the DAR Central Office for its review, and then
transmitted to the Office of the Secretary for signing.
55
Section 12, Rule III of the 2003 ALI Rules excepts applications for land use conversion and
exemption/exclusion from CARP coverage, and specified that they shall be governed by the special
procedures therefor, which in this case is DAR AO No. 6, Series of 1994.
56
See DAR v. CA, supra note 53, at 248.
57 In Natalia Realty, Inc. v. DAR (G.R. No. 103302, August 12, 1993, 225 SCRA 278, 283), the Court
ruled that lands already classified for residential, commercial or industrial use in town plans and
zoning ordinances as approved by the HLURB and its precursor agencies prior to June I 5, 1988 are
outside the coverage of the CARP.
58
See Agrarian Reform Law and Jurisprudence (A DAR-UNDP SARDIC Publication),
<http://www.lis.dar.gov.ph/documents/9269> (visited July 5, 2019).
In Heirs of Luna v. Afable (702 Phil. I 46, 170 [2013]), the Court had the occasion to declare that:

V
Decision 11 G.R. No. 229983

B. JURISDICTION OVER CASES INVOLVING THE CANCELLATION OF EPS,


, CLO As, AND OTHER AGRARIAN TITLES.

Petitioners argue that the pertinent DARAB Rules of Procedure in


force at the time of the filing of the exemption case provide that registered
EPs and CLOAs may only be corrected or cancelled by order of the
(Provincial or Regional) Adjudicator of the DARAB; 59 hence, the DAR
Secretary has no jurisdiction to cancel their respective EP and CLOA titles.

The argument is untenable.

The fact that respondents sought the cancellation of petitioners' EPs


and CLOAs does not necessarily mean that the application for CARP
exemption falls under the jurisdiction of the DARAB. Verily, for the
DARAB Adjudicator to acquire jurisdiction, the controversy must relate to
an agrarian dispute between the landowners and tenants in whose favor the
EPs and CLOAs have been issued by the DAR Secretary,60 which is not
extant here. An agrarian dispute, as defined by Section 3 (d) of RA 6657, as
amended, 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." 61

In this case, the consequent cancellation of the affected tenants' EP


and CLOA titles does not arise from a controversy relating to any tenurial
arrangement between petitioners and respondents in negotiating, fixing,
maintaining, changing or seeking to arrange terms or conditions of such
tenurial arrangement, but from the fact that the lands involved are not
covered by the CARP in the first place, rendering the issuance of said titles
unwarranted. Thus, there exists no agrarian dispute nor any agrarian reform
matter so as to situate the jurisdiction with the DARAB Adjudicator.

Such ~xemption clearance does not mean that the DAR Secretary is exempting the land from
CARL [(Referring to RA 6657)] coverage, with the implication that the land was previously
covere~i; it simply means that the CARL itself has, from the start, excluded the land from
CARL coverage, and the DAR Secretary is only affirming such fact. (Emphasis and
underscoring supplied)
59
Section I (6), Rule II of the DARAB 2003 Rules of Procedure adopted on January 17, 2003 provides:
Section 1. Primary and Exclusive Original Jurisdiction. - The Adjudicator shall have
primary and exclusive jurisdiction to determine and adjudicate the following cases:
xxxx
1.6 Those involving the correction, partition, cancellation, secondary and
subsequent issuances of Certificates of Land Ownership Award (CLOAs) and
Emancipation Patents (EPs) which are registered with the Land Registration
Authority[.] (Emphasis supplied)
60
DAR v. Heirs ofAbucay, G.R. Nos. 186432 and 186964, March 12, 2019; Sutton v. Lim, 700 Phil. 67,
74 (2012).
61
Emphasis supplied.
Decision 12 G.R. No. 229983

Indisputably, the controversy between the parties herein is not agrarian in


nature but merely involves the administrative implementation of the agrarian
reform program which is cognizable by the DAR Secretary. 62

Notably, while the DAR Secretary has the competence and


jurisdiction over respondents' application for CARP exemption as expressed
in DOJ Opinion No. 44, Series of 1990, it must be pointed out that a
separate case should nonetheless still be filed by tespondents (also
before the DAR) 63 for the purpose of cancelling the EP. and CLOA titles
of the affected tenants. This is because "[a]grarian refonn beneficiaries or
identified beneficiaries, or their heirs in case of death, and/or their
associations are indispensable parties in petitions for cancellation"64 of the
EPs/CLOAs, or other title issued to them under any agrarian reform
program. Here, the DAR Secretary, in taking cognizance of respondents'
application for CARP exemption, made neither a determination of the FBs'
individual rights nor any declaration that specific TCTs were thereby
cancelled. His resolution, which was affirmed by the CA, was limited to the
determination of whether or not the subject portions are excluded from the
coverage of the agrarian laws. As such, this case must only be confined to
such matter, and that a separate proceeding must still be initiated impleading
individual FBs to establish that the lands awarded to them fall within the
excluded areas, warranting the cancellation of their respective EP or CLOA
titles.

C. LANDS ALREADY CLASSIFIED FOR RESIDENTIAL, COMMERCIAL OR


INDUSTRIAL USE IN TOWN PLANS AND ZONING ORDINANCES AS APPROVED
BY THE HLURB AND ITS PRECURSOR AGENCIES PRIOR TO JUNE 15, 1988
ARE OUTSIDE THE COVERAGE OF THE AGRARIAN LAWS.

PD 27 covers private agricultural lands primarily devoted to rice and


corn under a system of sharecrop or lease-tenancy, whether classified as
landed estate or not, while RA 6657 covers all public and private agricultural
lands as provided in Proclamation No. 131 and Executive Order No. (EO)
229, 65 including other lands of the public domain suitable for agriculture,
regardless of tenurial arrangement and commodity produced. Conversely,

62
Sutton v. Lim, supra note 60, at 77.
63
With the passage on August 7, 2009 of RA 9700, entitled "AN ACT STRENGTHENING THE
COMPREHENSIVE AGRARIAN REFORM PROGRAM (CARP), EXTENDING THE ACQUISITION AND
DISTRIBUTION OF ALL AGRICULTURAL LANDS, INSTITUTING NECESSARY REFORMS, AMENDING FOR
THE PURPOSE CERTAIN PROVISIONS OF REPUBLIC ACT No. 6657, OTHERWISE KNOWN AS THE
COMPREHENSIVE AGRARIAN REFORM LAW OF 1988, AS AMENDED, AND APPROPRIATING FUNDS
THEREFOR" (July 1, 2009), further amending RA 6657, as amended, cases involving cancellation of
titles issued under any agrarian program, whether or not registered with the Land Registration
Authority, are now within the exclusive and original jurisdiction of the D4R Secretary. See DAR v.
Heirs ofAbucay, supra note 60, citing Section 24 of RA 6657, as amended by RA 9700.
64 Section 3 (j), Article I of DAR AO No. 07, Series of 2014, entitled "2014,RULES AND PROCEDURES
GOVERNING THE CANCELLATION OF REGISTERED EMANCIPATION PATENTS (EPS), CERTIFICATES OF
LAND OWNERSHIP AWARDS (CLOAS), AND OTHER TITLES ISSUED UNDER THE AGRARIAN REFORM
PROGRAM," issued on September 15, 2014; emphasis supplied.
65 Entitled "PROVIDING THE MECHANISMS FOR THE IMPLEMENTATION OF THE COMPREHENSIVE AGRARIAN
REFORM PROGRAM," approved on July 22, 1987.
Decision 13 G.R. No. 229983

lands not devoted to agricultural activity, including lands previously


converted/reclassified to non-agricultural uses prior to the effectivity of RA
6657 by government agencies other than the DAR are outside the coverage
of the agrarian laws,66 subject to the qualification that such conversion/
reclassification shall not operate to divest FBs of their rights over lands
covered by PD 27 that have vested prior to June 15, 1988. 67

DOJ Opinion No. 44, Series of 1990 recognized the authority of the
HLURB, and its precursor, the HSRC, to approve and/or promulgate zoning
and other land use control standards and guidelines which shall govern,
among others, land use plans and zoning ordinances of local government
units. Thus, lands already classified as commercial, industrial or
residential before June 15, 1988 no lon~er need any conversion
clearance from the DAR in order to be exempt from CARP coverage.

' D. AUTHORITY TO CLASSIFY LANDS.

Preliminarily, it must be pointed out that the classification of land as


agricultural constitutes a primary classification. Section 3, 68 Article XII of
the Constitution provides for the primary classification of lands of the public
domain into agricultural, forest or timber, mineral lands, and national parks.
Under the Public Land Act, the responsibility over primary classification of
lands of the public domain is vested in the President who exercises such
power upon the recommendation of the Department of Environment and
Natural Resources69 (DENR). By virtue of PD 705, 70 otherwise known as the
"Revised Forestry Code of the Philippines," the President delegated to the
DENR Secretary, among others, the power to classify unclassified lands of

66
See Natalia Realty Inc. v. DAR, supra note 57, at 282-283. See also Pasong Bayabas Farmers
Association Inc. v. CA, 473 Phil. 64, 92-94 (2004), and Section IO of RA 6657.
67
See third paragraph, Item II of DAR AO No. 6, Series of 1994.
68
Section 3, Article XII of the 1987 CONSTITUTION pertinently provides:
Section 3. Lands of the public domain are classified into agricultural, forest or timber,
mineral lands and national parks. Agricultural lands of the public domain may be further
classified by law according to the uses to which they may be devoted. Alienable lands of the public
domain shall be limited to agricultural lands. x x x.
xx x x (Emphasis supplied)
69
Section 6 of Commonwealth Act No. 141, entitled "AN ACT TO AMEND AND COMPILE THE LAWS
RELATIVE TO LANDS OF THE PUBLIC DOMAIN," otherwise known as "The Public Land Act" (December
1, 1936), provides:
Section 6. The President, upon the recommendation of the Secretary of Agriculture and
Commerce [(now, DENR)], shall from time to time classify the lands of the public domain
into-
(a) Alienable or disposable,
(b) Timber, and
( c) Mineral lands,
and may at any time and in a like manner transfer such lands from one class to another, for the
purposes of their administration and disposition.
The Department of Agriculture and Commerce (DAC) is now the DENR. See
<http://r7.denr.gov.ph/index.php/about-us/history> (visited July 5, 2019).
70
Entitled "REVISING PRESIDENTIAL DECREE No. 389, OTHERWISE KNOWN AS THE FORESTRY REFORM
CODE OF THE PHILIPPINES" (May 19, 1975).

'
Decision 14 G.R. No. 229983

the public domain that are needed for forest purposes as permanent forest to
form part of the forest reserves. 71

The same provision of the Constitution also provides that agricultural


lands of the public domain may be further classified according to the uses to
which they may be devoted. This further classification of agricultural lands
is referred to as secondary classification. 72

The authority to reclassify agricultural lands into residential,


commercial or industrial is lodged, among others, in cities and
municipalities 73 (hereinafter, LGUs). Prior to the passage of the present
Local Government Code of 1991, LGUs already have the power to reclassify
agricultural into non-agricultural lands pursuant to Section 374 of RA 2264, 75
otherwise known as the "Local Autonomy Act of 1959," which empowered
municipal and/or city councils to adopt zoning and subdivision ordinances or
regulations in consultation with the National Planning Commission. When
city/municipal councils approve an ordinance delineating an area or district
in their cities/municipalities as residential, commercial, or industrial zone
pursuant to the power granted to them under the aforesaid provision, they
are, at the same time, reclassifying any agricultural lands within the zone for
non-agricultural use; hence, ensuring the implementation of and compliance
with their zoning ordinances. 76 Pursuant to Letter of Instructions No. 729
dated August 9, 1978, LGUs were further required to submit their existing
land use plans, zoning ordinances, and enforcement systems and procedures

71
See Republic v. Roxas, 723 Phil. 279,302 (2013).
72
Hermosa v. CA, 604 Phil. 420, 428 (2009), citing Agrarian Law and Jurisprudence, Department of
Agrarian Reform-United Nations Development Programme, 2000 ed., p. 6.
73
Section 20 (a) of RA 7160, entitled "AN ACT PROVIDING FOR A LOCAL GoviRNMENT CODE OF 1991,"
otherwise known as the "LOCAL GOVERNMENT CODE OF 1991" (January 1, 1992), pertinently provides:
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[.] xx x.
x x x x (Emphasis supplied)
74
Section 3. Additional Powers of Provincial Boards, Municipal Boards or City Councils and
Municipal and Regularly Organized Municipal District Councils. - xx x.
xxxx
Power to adopt zoning and planning ordinances. - Any prov1s1on of law to the contrary
notwithstanding, Municipal Boards or City Councils in cities, and Municipal Councils in
municipalities are hereby authorized to adopt zoning and subdivision ordinances or regulations for
their respective cities and municipalities subject to the approval of the City Mayor or Municipal
Mayor, as the case may be. Cities and municipalities may, however, consult the National Planning
Commission on matters pertaining to planning and zoning.
xxxx
75 Entitled "AN ACT AMENDING THE LA ws GOVERNING LOCAL GOVERNMENTS BY INCREASING THEIR
AUTONOMY AND REORGANIZING PROVINCIAL GOVERNMENTS" (June 19, 1959).
76
Heirs of Luna v. Afable, supra note 58, at 168.
Decision 15 G.R. No. 229983

to the Ministry of Human Settlements for review, evaluation and approval,


which functions were eventually devolved upon the HSRC. 77

E. APPLICATION TO THE CASE AT BAR.

In this case, the DAR Secretary excluded portions of the lands


covered by TCT Nos. 164410 to 164415 (inclusive), 164417, and (164430)
422059 78 from CARP coverage on the basis of their reclassification as forest
conservation zones pursuant to HSRC Resolution No. 36, Series of 1981,
approving the LUP of Jalajala. On the other hand, the rest of the areas
applied for exemption were excluded from the CARP on the basis of their
HSRC-approved reclassification to agro-industrial, residential and
institutional 79 under the LUP of Jalajala, save for the 29.0981-ha. riceland
portions of TCT Nos. 164417,80 (164430) M-10897, 81 and (164432) M-
1355182 that were found to be ricelands already covered by EPs. 83

To recall, the CARP covers all public and private agricultural lands,
as provided in Proclamation No. 131 and EO 229, including other lands of
the public domain suitable for agriculture, regardless of tenurial arrangement
and commodity produced. Section 3 (c) of RA 6657, as amended 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." 84 DAR AO No. 1, Series of 199085 clarified
this definition86 of "agricultural land" as follows:

77
Under Section 5 (b) of Executive Order No. 648, entitled "REORGANIZING THE HUMAN SETTLEMENTS
REGULATORY COMMISSION," otherwise known as the "CHARTER OF THE HUMAN SETTLEMENTS
REGULATORY Commission" (February 7, 1981), the HSRC has the power and duty to: "[r]eview,
evaluate and approve or disapprove comprehensive land use development plans and zoning
ordinances of local government; and the zoning component of civil works and infrastructure projects
of nationa~ regional and local governments; subdivisions, condominiums or estate development
projects including industrial estates, of both the public and private sectors and urban renewal plans,
programs and projects: Provided, that the Land Use Development Plans and Zoning Ordinances of
Local Governments herein subject to review, evaluation and approval of the commission shall
respect the classification of public lands for forest purposes as certified by the Ministry of
Natural Resources: Provided, further, that the classification of specific alienable and disposable lands
by the Bureau of Lands shall be in accordance with the relevant zoning ordinance of Local government
where it exists: and provided, finally, that in cities and municipalities where there are as yet no zoning
ordinances, the Bureau of Lands may dispose of specific alienable and disposable lands in accordance
with its own classification scheme subject to the condition that the classification of these lands may be
subsequently changed by the local governments in accordance with their particular zoning ordinances
which may be promulgated later." (Emphases supplied)
78
The lands covered by TCT Nos. 164414, 164417, and (164430) 422059 are classified as forest
conservation and agro-industrial.
79
See rollo, pp. 92-93.
80 Only a 1.5941-ha. portion of the lot covered by the said TCT was denied exclusion (see id. at 97 and
98), albeit, 27.3842 has. of the said land appeared to have been already issued EPs (id. at 94).
81
Only a 16. 7959-ha. portion of the lot covered by the said title was denied exclusion (see id. at 97 and
98), albeit, a substantial portion thereof have already been issued EPs and CLO As in favor of the FBs
(see id. at 94).
82 Only a 10.7081-ha. portion of the lot covered by the said title was denied exclusion (see id. at 98),
albeit, a substantial portion thereof have already been issued EPs and CLOAs in favor of the FBs (see
id. at 94).
83
See id. at 97-98.
84
Underscoring supplied.
Decision 16 G.R. No. 229983

Agricultural land refers to those devoted to agricultural activity as defined


in RA 6657 and not classified as mineral or forest by the Department
of Environment and Natural Resources (DENR) and its predecessor
agencies and not classified in town plans and zoning ordinances as
approved by the Housing and Land Use Regulatory Board (HLURB) and
its preceding competent authorities prior to 15 June 1988 for residential,
commercial or industrial use. 87 (Emphases supplied)

It is discernible from the foregoing definition that in order to be not


considered agricultural land, and hence, not covered under the CARP, the
land must not have been classified: (a) as mineral or forest by the DENR and
its predecessor agencies; and (b) for residential, commercial or industrial use
in town plans and zoning ordinances as approved by the BLURB and its
preceding competent authorities prior to June 15, 1988. Therefore, the forest
land referred to in Section 3 (c) of RA 6657, as amended is to be understood
as referring to forest land declared to be such by the DJ;:NR, i.e., primary
classification as forest, and not its secondary classification by the LGUs.
Consequently, reclassification by LGUs of agricultural lands into "forest
conservation zones," which is in the nature of a secondary classification,
does not have the effect of converting such lands into forest lands as to
be exempt from CARP coverage. 88

In this case, the portions of the lands covered by TCT Nos. 164410 to
164415 (inclusive), 164417, and (164430) 422059 had been reclassified as
forest conservation zones under the HSRC-approved LUP of the
Municipality of Jalajala. Thus, being covered by a secondary, and not a
primary, classification as above-discussed, these lands cannot be deemed as
forest lands for purposes of CARP exemption under Section 3 (c) of RA
6657, as amended.

Nonetheless, the Court cannot discount the possibility that the said
lands classified as forest conservation zones may fall within the exemptions
and exclusions provided under Section 10 (a) of RA 6657 if they are
actually, directly and exclusively used for parks, forest reserves, 89
reforestation 90 or watersheds. 91 The said provision reads:

85 Entitled "REVISED RULES AND REGULATIONS GOVERNING CONVERSION OF PRIVATE AGRICULTURAL


LANDS TO NON-AGRJCULTURAL USES" dated March 22, 1990.
86 See DAR AO No. I, Series of 1990, re: REVISED RULES AND REGULATIONS GOVERNING CONVERSION
OF PRIVATE AGRICULTURAL LANDS TO NON-AGRICULTURAL USES, issued by then DAR Secretary
Florencio B. Abad on March 22, 1990.
87 See Item III of DAR AO No. I, Series of 1990; <http://www.lis.dar.gov.ph/documents/377> (visited
July 5, 2019).
88
See <http://www.lis.dar.gov.ph/documents/9269> (visited July 24, 2019).
89 Section 3 of PD 705 defines "permanent forest" or "forest reserves" as referring to "those lands of the
public domain which have been the subject of the present system of classification and determined to be
needed for forest purposes."
90 Section 2. 7 of DENR AO No. 30, Series of 1992, RE: GUIDELINES FOR THE TRANSFER AND
IMPLEMENTATION OF DENR FUNCTIONS DEVOLVED TO THE LOCAL GOVERNMENT UNITS (June 30,
1992), defines "contract reforestation" as "[t]he implementation of reforestation activities, including
establishment, maintenance and protection of forest plantations and nursery preparations, through
written agreements with the private sector such as families, communities and corporations and/or with
the public sector like local government units (LG Us) and other government agencies (OGAs)."
Decision 17 G.R. No. 229983

Section 10. Exemptions and Exclusions. -

(a) Lands actually, directly and exclusively used for parks, wildlife,
forest reserves, reforestation, fish sanctuaries and breeding grounds,
watersheds and mangroves shall be exempt from the coverage of this
Act. (Emphasis supplied)

Notably, DAR AO No. 13-9092 provides for the rules and


procedurtts governing exemption of lands from CARP Coverage under
Section 10 of RA 6657, as amended, and pertinently states the guidelines
to be observed in the application of the aforecited provision oflaw, thus:

C. Lands which have been classified or proclaimed, and/or actually,


directly and exclusively used and found to be necessary for parks,
wildlife, forest reserves, fish sanctuaries and breeding grounds, and
watersheds and mangroves shall be exempted from the coverage of
CARP until Congress, taking into account ecological, developmental and
equity considerations, shall have determined by law, the specific limits of
public domain, as provided for under Sec. 4 (a) of R.A. 6657, and a
reclassification of the said areas or portions thereof as alienable and
disposable has been approved.

D. Lands which have been actually, directly and exclusively used and
found to be necessary for reforestation are likewise excluded and
exempted from the coverage of the CARP, provided that the areas or
portions thereof occupied by qualified forest occupants shall be
included in the Integrated Social Forestry (ISF) program of DENR, if
suitable. (Emphases supplied)

Given that the status of the above-mentioned lands was not examined
under the context of Section 10 (a) of RA 6657, as amended, the Court finds
that there is a need to refer93 the matter to the Office of the DAR Secretary94
for the purpose of determining whether or not the same are actually, directly
and exclusively used for parks, forest reserves, reforestation, or watersheds
as to be exempt from CARP coverage in accordance with Section 10 (a) of
RA 6657, as amended, pursuant to the guidelines set by DAR AO No. 13-90.

With respect to the lands covered by TCT Nos. 164414, 164415,


164416, 164417, and (164430) 422059 95 which have been secondarily
reclassified as agro-industrial, the Court finds the DAR Secretary to have
91
Section 2.22 of DENR AO No. 30, Series of 1992, defines "small watershed areas" as referring to
"forest lands identified and delineated by the DENR as sources of water supply for specific local
communities."
92
RE: RULES AND PROCEDURES GOVERNING EXEMPTION OF LANDS FROM CARP COVERAGE UNDER
SECTION 10, R.A. 6657, adopted on August 30, 1990.
93
The dete~ination of the exemption of lands from CARP coverage under Section 10 of RA 6657, as
amended, is covered by a different set of rules and procedures, i.e., DAR AO No. 13-90, and would
entail the issuance of a Certificate of Exemption, not an Exemption Clearance from CARP Coverage.
94 Under Item IV (F) of DAR AO No. 13-90, the DAR Secretary shall approve or disapprove applications
for exemption from CARP coverage for lands exceeding fifty (50) hectares.
95
The lands covered by TCT Nos. 164414, 164417, and (164430) 422059 are classified as forest
conservation and agro-industrial.
Decision 18 G.R. No. 229983

erred in excluding the same from the CARP pursuant to Section 3 (c) of
RA 6657, as amended. DOJ Opinion No. 67, Seriei of 2006 96 dated
September 25, 2006 provides that agro-industrial lands are within the
ambit or coverage of the definition of agricultural land under Section 3
(c) of RA 6657, as amended, considering that: (a) they are neither included
in the enumeration of exclusion provided in the said definition nor
mentioned under Section 1097 of the same law to be exempt from CARP
coverage; and (b) the legislative intent to include agro-industrial land within
the coverage of the agrarian reform program was specifically documented in
the records of the Philippine Senate. 98

Moreover, Section 4 (d) of RA 6657, as amended provides that the


law covers "[ a]11 private lands devoted to or suitable for agriculture
regardless of the agricultural products raised or that can be raised thereon."
In Pasong Bayabas Farmers Association, Inc. v. CA, 99 it was clarified that
agricultural lands are only those lands which are arable or suitable
lands that do not include commercial, industrial, and residential lands.
Thus, unless the agro-industrial land is shown to be not arable, or is devoted
to exempt activities such as commercial livestock, poultry and swine

96
Issued by then Secretary Raul M. Gonzalez.
97
Section 10 of RA 6657, as amended by RA 7881, provides:
Section 10. Exemptions and Exclusions. -
(a) Lands actually, directly and exclusively used for parks, wildlife, forest reserves,
reforestation, fish sanctuaries and breeding grounds, watersheds and mangroves shall be
exempt from the coverage of this Act.
(b) Private lands actually, directly and exclusively used for prawn farms and
fishponds shall be exempt from the coverage of this Act: Provided, That said prawn
farms and fishponds have not been distributed and Certificate of Land Ownership Award
(CLOA) issued to agrarian reform beneficiaries under the Comprehensive Agrarian
Reform Program.
In cases where the fishponds or prawn farms have been subjected to the
Comprehensive Agrarian Reform Law, by voluntary offer to sell, or commercial farms
deferment or notices of compulsory acquisition, a simple and absolute majority of the
actual regular workers or tenants must consent to the exemption within one (1) year from
the effectivity of this Act. When the workers or tenants do not agree to this exemption,
the fishponds or prawn farms shall be distributed collectively to the worker-beneficiaries
or tenants who shall form a cooperative or association to manage the same.
In cases where the fishponds or prawn farms have not been subjected to the
Comprehensive Agrarian Reform Law, the consent of the farm wor15ers shall no longer be
necessary, however, the provision of Section 32-A hereof on incentives shall apply.
(c) Lands actually, directly and exclusively used and founci to be necessary for
national defense, school sites and campuses, including experimental farm stations
operated by public or private schools for educational purposes, seeds and seedling
research and pilot production center, church sites and convents appurtenant thereto,
mosque sites and Islamic centers appurtenant thereto, communal burial grounds and
cemeteries, penal colonies and penal farms actually worked by the inmates, government
and private research and quarantine centers and all lands with eighteen percent ( 18%)
slope and over, except those already developed, shall be exempt from the coverage of this
Act.
98
See DOJ Opinion No. 67, Series of 2006, citing Volume I, No. 93, Re: Discussion on Senate Bill No.
249 "An Act Instituting A Comprehensive Agrarian Reform Program To Promote Social Justice and
Industrialization, Providing the Programs For Its Implementation, and For Other Purposes."
99
Supra note 66, at 92, citing Luz Farms v. Secretary of the DAR, 270 Phil. 151, 158-159 (I 990) which,
in turn, cited Record, CONCOM, August 7, 1986, Vol. III, p. 30.
Decision 19 G.R. No. 229983

raising, 100 fishpond and prawn farming, 101 cattle-raising, 102 or other activities
which do not involve the growing of crops and accordingly reclassified
therefor, the said land shall be within the coverage of the CARP.

Accordingly, only the exclusion of the portions of the lands covered


by TCT Nos. 164416, 164417, 164418, 164419, 164420, and (164432)
M-13551 which have been reclassified as residential or institutional per the
HSRC-approved LUP of Jalajala should be upheld since lands reclassified as
non-agricultural prior to the effectivity of RA 6657 by government agencies
other than the DAR are outside CARP coverage. 103

However, it bears to stress that while DAR AO No. 6, Series of 1994


declares that the reclassification of lands to non-agricultural uses shall not
operate to divest FBs of their rights over lands covered by PD 27, such
rights must have vested prior to June 15, 1988. 104 Notably, the
reclassification of the subject lands in 1981 came prior to the issuance and
registration of EPs 105 and CLOAs 106 in favor of the FBs between October 24,
100
See Luz Farms v. Secretary of the DAR, id. at I 60.
101
See Atlas Fertilizer Corporation v. Secretary of the DAR, G.R. Nos. 93100 and 97855, June 19, 1997,
274 SCRA 30, 34-36.
102
See DAR v. Sutton, 510 Phil. I 77, I 85 (2005).
103
See Natalia Realty Inc. v. DAR, supra note 57, at 282-283. See also Pasong Bayabas Farmers
Association Inc. v. CA, supra note 66, and Section 10 of RA 6657.
104
See third paragraph, Item II of DAR AO No. 6, Series of 1994.
105
Among the FBs issued TCTs pursuant to PD 27 are the following petitioners:

Eutiquiano R. Austria Rollo, oo. 133, 136


Pedro E. Barrion Id. at 1 I 6, I 19 (reverse portion)
Luisito L. Bonita Id. at 116, 136
Mateo P. Bonita Id. at 116, 120, 125 (reverse portion), 130 (reverse
portion), I 36
Marciano B. Cabrera Id. at 136
Celso D. Endon Id. at 123, 126
German M. Endon Id. at 126, 130 (reverse portion),
Victorino M. Enriquez Id. at 136
Ernesto C. Garin Id. at 136
Clemente P. Lara Id.atl33
Dionisio B. Llanto Id.atll7,138
Toribio M. Malabanan Id.atll7,138
Fabian C. Manguiat Id. at 133, 138
Rodrigo G. Manguiat Id. at 133
Benjamin G. Maunahan Id. at 136
Nicasio G. Maunahan ld.at137
Nimesio G. Maunahan Id. at 120, 123
("Nimecio G. Maunahan" in
the TCTs)
Romeo G. Maun ah an Id. at 117, 137
Emilio C. Panganiban Id. at 117, 120
Pablo C. Tuiza Id. at 123, 126, 129 (reverse portion)
Rizal P. Tuiza Id. at 123, 126
Juan 0. Vivas Id. at 136
Mario 0. Vivas Id. at 136, 137
106
Among the FBs issued TCTs pursuant to RA 6657 are the following petitioners:
Rodrigo D. Atienza Id. at 134
Antohia P. Bobadilla id.atll0
Fernando B. Bonita Id.at113
Luisito L. Bonita Id. at 111
Decision 20 G.R. No. 2299'83

1988 and October 27, 1995, and way before the issuance of the January 14,
1986 memorandum of the President directing the issuance of EPs to the FBs
of the OL T program pursuant to which EPs were issued to individual FBs.
Since the rights and responsibilities of beneficiaries shall only
commence from their receipt of duly registered EPs 107 or CLOAs, 108
undeniably, no vested rights had accrued in favor of the concerned FBs prior
to the reclassification of the subject lands. Hence, the affected FBs cannot
invoke the issuance of EP and CLOA titles in their favor as a bar to the
exemption case.

In sum, the Court finds that the CA committed reversible error in


upholding the DAR Secretary's ruling excluding: (a) portions of the lands
covered by TCT Nos. 164410 to 164415 (inclusive), 164417 and (164430)
422059 on the basis of their HSRC-approved reclassification as forest
conservation zone since only forest lands primarily classified by the DENR
are exempt from CARP coverage pursuant to Section 3 (c) of RA 6657, as
amended; and (b) portions of the lands covered by TCT Nos. 164414,
164415, 164416, 164417, and (164430) 422059 on the basis of their
secondary reclassification as agro-industrial since agro-industrial lands are
within the ambit or coverage of the definition of agricultural land, and as
such, covered by the CARP. However, anent the lands in item (a), they may
nonetheless be exempt from CARP coverage if they are actually, directly
and exclusively used for parks, forest reserves, reforestation, or watersheds
under Section 10 (a) of RA 6657, as amended upon determination of the
Office of the DAR Secretary.

Ester M. Enriquez Id. at 110, 111


Clemente P. Lara Id. at 129
Jose S. Lizardo Id. at 134
Danilo B. Ma1mantav Id. at I 08 (reverse p01iion), 110, 113, 113 (reverse portion)
Manolito 0. Magoantay Id. at 113
Wilfredo 0. Magoantay Id. at 113
Soriano D. Malabanan Id. at 111 (reverse portion), 113 (reverse portion)
("Soriano P. Malabanan"
in the TCT)
Andres G. Manguiat Id. at 111
Gregorio L. Manguiat Id. at 111
Juanito G. Manguiat Id. at 111
Rodrigo G. Manguiat Id. at 111, 129
Francisco M. Maray Id. at 110
Benjamin G. Maunahan Id.atlll,129
Jay B. Maunahan Id. at 110, I 17
Nicasio G. Maunahan Id. at 111
Fidel C. Pedrigoza Id. at 113 (reverse portion)
107
In Davao New Town Development Corporation v. Spouses Saliga (723 Phil. 353, 372 [2013]), the
Court had the occasion to clarify 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." It pointed out that the issuance of the EP perfects the title of
the tenant-farmers and vests in them absolute ownership upon full compliance with the prescribed
requirements.
108
See Section 24 of RA 6657, as amended by RA 9700.
Decision 21 G.R. No. 229983

On the other hand, the Court finds the CA to have correctly affirmed
the exclusion of the portions of the lands covered by TCT Nos. 164416,
164417, 164418, 164419, 164420, and (164432) M-13551 which have been
reclassified as residential or institutional.

Nonetheless, before the' application for exemption may be


completely granted, payment of disturbance compensation to any
affected tenants of the properly excluded portions - herein limited to the
residential or institutional lands covered by TCT Nos. 164416, 164417,
164418, 164419, 164420, and (164432) M-13551 per the HSRC-approved
LUP of Jalajala - must first be made. 109 This is because once a leasehold
relationship is established, the agricultural lessee is entitled to security of
tenure and acquires the right to continue working on the landholding until
such leasehold relation is extinguished, 110 and he/she is validly dispossessed
thereof for cause, among others, the reclassification of the land into
residential, commercial, industrial or some other urban purposes is upheld in
a final and executory Court judgment, thereby entitling him to disturbance
compensation. 111 In addition, the usufructuary rights of the affected FBs over
their awarded lands shall not be diminished 112 pending the cancellation of
their EP and CLOA titles in the proper proceedings.

Finally, contrary to petitioners' claim, the fact that Juliana had


previously , voluntarily offered to sell the subject lands to the DAR is
inconsequential and is not a bar to the exemption case. It is settled that lands
previously tonverted to non-agricultural uses/reclassified as non-agricultural
prior to the effectivity of RA 6657 by government agencies other than the
DAR are outside CARP coverage. 113 The basis for the exemption is not the
withdrawal of the voluntary offer for sale (VOS) but the reclassification of
the lands prior to June 15, 1988. 114 This being the case, Juliana's previous
VOS was ineffective because the subject lands cannot be the subject of
109
See Roxas & Co., Inc. v. DAMBA-NFSW, 622 Phil. 37, 80 (2009).
IIO See Section 7 of RA 3844, entitled "AN ACT TO ORDAIN THE AGRICULTURAL LAND REFORM CODE
AND TO INSTITUTE LAND REFORMS IN THE PHILIPPINES, INCLUDING THE ABOLITION OF TENANCY AND
THE CHANNELING OF CAPITAL INTO INDUSTRY, PROVIDE FOR THE NECESSARY IMPLEMENTING
AGENCIES, APPROPRIATE FUNDS THEREFOR AND FOR OTHER PURPOSES," otherwise known as the
"AGRICULTURAL LAND REFORM CODE" (August 8, 1963), as amended by RA 6389, entitled "AN ACT
AMENDING REPUBLIC ACT NUMBERED THIRTY-EIGHT HUNDRED AND FORTY-FOUR, AS AMENDED,
OTHERWISE KNOWN AS THE AGRICULTURAL LAND REFORM CODE, AND FOR OTHER PURPOSES,"
otherwise known as the "CODE OF AGRARIAN REFORMS OF THE PHILIPPINES" (September 10, 1971 ).
111
Section 36 of RA 3844, as amended by Section 7 of RA 6389, provides:
Section 36. Possession of Landholding; Exceptions. - Notwithstanding any agreement as to the
period or future surrender, of the land, an agricultural lessee shall continue in the enjoyment and
possession of his landholding except when his dispossession has been authorized by the Court in a
judgment that is final and executory if after due hearing it is shown that:
(1) The landholding is declared by the department head upon recommendation of the
National Planning Commission to be suited for residential, commercial, industrial or
some other urban purposes: Provided, _That the agricultural lessee shall be entitled to
disturbance compensation equivalent to five times the average of the gross
harvests on his landholding during the last five preceding calendar years[.]
(Emphases supplied)
112
See id. See also Unsigned Resolution in Alcantara v. DAR, G.R. No. 203441, July 9, 2014.
113
Natalia Realty, Inc. v. DAR, supra note 57.
114
See DOJ Opinion No. 44, Series of 1990.
Decision 22 G.R. No. 229983

the same, they being clearly beyond CARP coverage. 115 While the DAR
subsequently issued DAR AO No; 09-90 116 (now DAR AO No. 07-11 117),
providing that " [a] 11 lands which are voluntarily offered for sale to the
government, except lands within the retention limits, may no longer be
withdrawn and shall immediately fall under Phase I, as provided for in
Section 7 of RA 6657," 118 the same was not yet in effect at the time the VOS
was made on March 13, 1989. 119

WHEREFORE, the petition is DENIED. The Decision dated


February 20, 2017 of the Court of Appeals in CA-G.R. SP No. 108543 is
hereby MODIFIED, thereby PARTIALLY APPROVING the Application
for Exemption Clearance from CARP Coverage only with respect to the
portions of the parcels of land covered by Transfer Certificates of Title
(TCT) Nos. 164416, 164417, 164418, 164419, 164420, and (164432) M-
13551 in the name of Juliana Maronilla, located in Bagumbong, Jalajala,
Rizal, which have been reclassified as residential and institutional. The
issuance of the Exemption Clearance from CARP Coverage for the
aforementioned lands is subject to the payment of disturbance compensation
set by the Secretary of the Department of Agrarian Reform (DAR) in
accordance with existing DAR administrative rules. Accordingly, the
records of this case are hereby REMANDED to the Qffice of the DAR
Secretary for proper disposition in accordance with this Decision.

Meanwhile, the matter of determining whether or not the portions of


the lands covered by TCT Nos. 164410 to 164415 (inclusive), 164417, and
(164430) 422059 are actually, directly and exclusively used for parks, forest
reserves, reforestation, or watersheds as to be exempt/excluded from CARP
coverage under Section 10 (a) of Republic Act No. 6657, as amended, is
REFERRED to the Office of the DAR Secretary for proper disposition in
accordance with DAR Administrative Order No. 13-90.

115
See Rom v. Roxas & Company, Inc., 672 Phil. 342,368 (2011).
116 Entitled "REVISED RULES GOVERNING THE ACQUISITION or AGRICULTURAL LANDS SUBJECT OF
VOLUNTARY OFFER TO SELL AND COMPULSORY ACQUISITION PURSUANT TO RA 6657," adopted on
August 30, 1990; <http://www.lis.dar.gov.ph/documents/446> (visited July 5, 2019).
117
Entitled "REVISED Ruu~s AND PROCEDURES GOVERNING THE ACQUISITION AND DISTRIBUTION OF
PRIVATE AGRICULTURAL LANDS UNDER REPUBLIC ACT (R.A.) No. 6657, AS AMENDED," adopted on
September 30, 2011. <http://www.lis.dar.gov.ph/documents/6436> (visited July 5, 2019).
118
Item III (B) of DAR AO No. 09-90. Section 28 of DAR AO No. 07-11 provides:
Section 28. Period to File an Application/Petition for Exemption/Exclusion. - The
Application/Petition for Exemption or Exclusion from CARP coverage may be filed together with the
above-mentioned Manifestation. If it is not filed jointly, the LO [(landowner)] can file it, together with
the documents required by the rules on exemption or exclusion, within sixty (60) days from receipt of
the NOC [(Notice of Coverage)]. Non-submission thereof within this reglementary period shall be
construed as a waiver or abandonment of his/her/its right to file said Petition for Exemption or
Exclusion from CARP coverage with respect to the landholding covered.
For landholdings under VOS, the LO is deemed to have waived his/her/its right to file such a
Petition for Exemption or Exclusion from CARP coverage upon DAR's acceptance of his/her/its
offer. (Emphasis supplied)
11 1
' See rollo, p. 140.
Decision 23 G.R. No. 229983

SO ORDERED.

W1'1JJ
ESTELA MJPERLAS-BERNABE
Associate Justice
'

WE CONCUR:

Senior Associate Justice


Chairperson

INS. CAGUIOA
stice
C(RE~
Associate Justice

AM
Ass·ociate Justice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Court's Division.

Senior Associate Justice


Chairperson, Second Division
'
Decision 24 G.R. No. 2299'33

CERTIFICATION

Pursuant to Section 13, Article VIII of the Cori.stitution, and the


Division Chairperson's Attestation, I certify that the conclusions in the
above Decision had been reached in consultation before the case was
assigned to the writer of the opinion of the Court's Division.

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