Santos Ventura Hocorma Foundation v. Manalang

J., J.:

This resolves the Petition for Review on Certiorari1 under Rule 45 of the Rules of Court assailing the Decision2 dated March 27, 2014 and Resolution3 dated July 11, 2014 of the Court of Appeals (CA) in CA-G.R. SP No. 122846. The challenged rulings reinstated the Decision4 dated January 24, 2011 of the Department of Agrarian Reform Adjudication Board (DARAB). As held by the CA, Lot No. 554-D-3 falls under the coverage of the Comprehensive Agrarian Reform Program (CARP) and the Certificates of Land Ownership Award (CLOAs) issued to respondents are valid .

The Antecedents As culled from the records, petitioner Santos, Ventura, Hocorma Foundation, Inc. (SVHFI) is the registered owner of a 255,699 square-meter (25.5699 hectares) parcel of land situated at Brgy. Cacutud (formerly Mamatitang), Mabalacat, Pampanga, identified as Lot No. 554-D-3 and covered by Transfer Certificate of Title (TCT) No. 549661-R of the Registry of Deeds for the province of Pampanga.5 On September 20, 2002, Lot No. 554-D-3 was placed under the coverage of the CARP.6 On November 13, 2003, the Department of Agrarian Reform (DAR) caused the annotation of Subdivision Plan Pcs-03-012487 on TCT Nos. 549659-R, 549660-R, 549661-R (the title covering Lot No. 554-D-3) and 549663-R. Domingo M. Manalang, Renato D. Garcia, Ronaldo D. Garcia and Jesus M. Galang (collectively, respondents unless individually referred to) then applied as beneficiaries of the land. On April 13, 2004, SVHFI and the Bases Conversion Development Authority (BCDA) executed a Deed of Absolute Sale for the acquisition of two portions of Lot No. 554-D-3, specifically, Lot No. 554-D-3-B and Lot No. 554-D-3-C, to be used for the construction of Clark North 2 interchange of the Subic-Clark-Tarlac Expressway (SCTEX).7 Meanwhile, the DAR caused the partial cancellation of Certificates of Title Nos. 549659-R, 549660-R, 549661-R and 549963-R. On December 29, 2005, CLOAs were issued to respondents.8 The Registry of Deeds thereafter registered in favor of respondents' names on the following titles: TCT No. 19135 with CLOA No. 00809657 and TCT No. 19134 with CLOA No. 00809658 in the name of respondent Renato D. Garcia; TCT No. 1900 with CLOA No. 00809454 in the name of respondent Jesus Galang; TCT No. 19099 with CLOA No. 00809455 in the name of respondent Rogelio Calalang; TCT No. 19101 with CLOA No. 00809457 in the name of Luis Caparas; TCT No. 19102 with CLOA No. 00809458 in the name of Trinidad Garcia; and TCT No. 19103 with CLOA No 00809459 in the name of respondent Domingo Manalang.9 On September 18, 2006, respondents filed a petition for Nullification of Sale with Prayer for Damages and Application for a Temporary Restraining Order and/or Writ of Injunction before the Office of the Regional Agrarian Reform Adjudicator (RARAD).

The case was docketed as DARAB Case No. 15821. In the petition, respondents sought to nullify the sale executed between SVHFI and BCDA. According to them, the parcels of land sold by SVHFI were under the coverage of the CARP pursuant to Republic Act (RA) No. 6657 and they are the farmer beneficiaries thereof.10 Respondents also averred that prior to consummation of the sale to BCDA, SVHFI had already been notified that the subject property was among those placed under coverage of the CARP.

This fact was already made known to SVHFI sometime on September 20, 2002, through its former Chief Executive Officer, Mr. Melchor G. Raymundo, in a letter sent by Mr. Nicandro Daculog, the then Municipal Agrarian Reform Officer (MARO) of Mabalacat, Pampanga.

Respondents further averred that SVHFI surreptitiously negotiated with BCDA for the sale of two portions of Lot 554- D-3 containing a total area of 177,947 square meters, in evident bad faith and malicious intent to evade the CARP.11 Meanwhile, in their Answer, SVHFI raised, among other things, that the subject property is not covered by the CARP since it has already been reclassified as residential land sometime in 1980 or prior to the enactment of RA No. 6657. To prove their claim, SVHFI presented a certification from the Housing and Land Use Regulatory Board (HLURB) which stated that Lot No. 554-D-3 had indeed been reclassified for residential use.12 On September 26, 2006, SVHFI filed before the RARAD a petition for the Cancellation of the CLOAs issued to respondents. The case was docketed as DARAB Case No. 15821-A.13 In their petition, SVHFI explained that the subject property, Lot No. 554-D-3, used to be a part of Lot No. 554 and covered by TCT No. 195826- R until Lot No. 554 was subdivided due to expropriations made by the Department of Public Works and Highways (DPWH).

According to SVHFI, they received an Invitation Letter to Landowner for Field Investigation from the DAR on June 27, 2002 through which they were informed that the property covered by TCT No. 195826-R had been placed under the coverage of RA No. 6657. SVHFI, however, claimed that the letter failed to state which among the eight parcels covered by TCT No. 195826-R were placed under the CARP. Subsequently, a Notice of Coverage and Field Investigation dated September 20, 2002 was sent by the DAR to SVHFI informing the latter that 50 hectares of Lot No. 554 was placed under the coverage of the CARP.

SVHFI, however, maintained that the Notice still failed to mention which parcels of land comprising Lot No. 554 and covered by TCT No. 195826-R were placed under the coverage. This, according to SVHFI, deprived them from making a choice as to which among the eight parcels of land covered by TCT No. 195826-R they intended to retain. Later, they learned that the parcels of land, originally part of Lot No. 554, sought to be distributed by the DAR pursuant to RA No. 6657 included portions of Lot No. 554-D-3.14 SVHFI averred that even before the DAR could proceed with the coverage of Lot No. 554-D-3, the BCDA had already expropriated 177,947 square meters of Lot No. 554-D, namely: Lot No. 554-D-3-B and Lot No. 554-D-3-C, for the construction of the SCTEX and that Notice of the aforesaid expropriation was given to the DAR.

SVHFI also asserted that during their dialogue with the MARO of Mabalacat, Pampanga, they presented proof of the expropriations made by the BCDA on several portions of Lot No. 554-D. According to SVHFI, they were assured that the expropriations made by the BCDA would be incorporated in the DAR survey and deducted from the coverage of the CARP; that they informed and requested from the DAR that the retained area be segregated and taken from Lot No. 554-D-3 and Lot No. 554-D-5; and that contrary to what had been agreed upon, the DAR still caused the unilateral cancellation of Psd-03-125741, the subdivision plan covering Lot No. 554-D-1, 554-D-2, 554-D-3, 554-D-4 & 554-D-5, and the approval of a new consolidated subdivision plan, Pcs-03-012487.15 SVHFI maintained that Lot No. 554-D-3 should not be covered since it had already been reclassified as residential land several years prior to the enactment of RA No. 6657.

According to them, even if it were to be assumed that the subject property is within the ambit of the law, the DAR still failed to comply with its mandate of providing SVHFI with its retained area which, had they been given the choice, would have been Lot No. 554-D-3 and Lot No. 554-D-5.16 Subsequently, DARAB Case No. 15821 and 15821-A were consolidated.

Meanwhile, SVHFI applied for exemption of Lot 554-D-3 from coverage under the CARP.17 In DARCO Order18 EX-0712-489 dated December 10, 2007, the DAR Secretary granted the application for exemption filed by SVHFI. According to the Secretary, respondents could not have derived any vested rights over the property despite the CLOAs awarded to them because the subject property was reclassified into non-agricultural land before June 15, 1988, thus, it is exempt from coverage of the CARP. The pertinent portion of the Order reads: x x x Protestants could not have derived any vested rights over the subject property despite their CLOAs because as earlier said, the coverage of the said properties, which led to the eventual issuance of the CLOAs in their favor, was erroneous in the first place.

Thus, they are deemed as to have not conferred any rights on their recipients. On the other hand, in view of the erroneous coverage of the subject properties, herein Applicants, as original owners of said properties, were never divested of their rights over the same, including the rights to apply for exemption. Moreover, the results of the ocular inspection on the subject property, reveal that majority of the portions of the area applied for exemption have already been developed into what is now known as the Subic-Clark-Tarlac Expressway.

A clear indication that indeed, the land has already been reclassified into non-agricultural purposes by the LGU and are no longer feasible for agricultural production.19 Respondents filed a Motion for Reconsideration but the DAR Secretary, in DARCO Order20 No. EX-0808-377 dated August 29, 2008, maintained his earlier pronouncement and denied their motion for lack of merit. The dispositive portion of the Order reads: WHEREFORE , premises considered, Motion for Reconsideration dated 31 January 2008, from the Order dated 10 December 2007, filed by the protestants/movants Orlando Garcia, et al. through its counsel, Benjamin M. Yambao, over a parcel of land with an aggregate area of 25.5699 hectares, situated in Barangay Cacutud (formerly Mamatitang), Mabalacat, Pampanga is hereby DENIED for lack of merit. The Exemption Order dated 10 December 2007 is MAINTAINED.

SO ORDERED.21 Respondents subsequently filed a Manifestation. In DARCO Order22 No. EX-0905-133, the DAR Secretary denied respondents' plea for reconsideration and reiterated that reclassification of Lot No. 554-D-3 into non-agricultural prior to June 15, 1988 meant that the landholding is one of those deemed exempted from coverage under the CARP pursuant to DOJ Opinion No. 44. The dispositive portion of the Order reads: WHEREFORE , premises considered, Manifestation filed by Oppositors, Orlando Garcia, et al. dated 10 November 2008, praying to the Honorable Office, that the Order dated 10 December 2007 be Reconsidered and a new one be issued Denying the Application for Exemption of Santos Ventura Hocorma Foundation Inc., for lack of merit, over a parcel of land with an aggregate area of 25.5699 hectares situated at Brgy.

Cacutud (formerly Mamatitang), Mabalacat, Pampanga is hereby DENIED for lack of merit. The Orders dated 10 December 2007 and 29 August 2008 are hereby AFFIRMED in toto. SO ORDERED.23 Meanwhile, on December 26, 2007, the RARAD rendered a Joint Decision24 upholding the validity of the CLOAs issued to respondents and declaring the sale between SVHFI and BCDA as null and void ab initio.25 SVHFI and BCDA thereafter filed a Joint Motion for Reconsideration.

In the said motion, they informed the RARAD that the DAR Secretary already granted their application for exemption. Their efforts, however, were futile as the RARAD denied their motion in an Order dated May 15, 2008.26 On appeal taken by SVHFI, the DARAB agreed with the findings of the RARAD and ruled in favor of respondents. In its Decision27 dated January 24, 2011, the DARAB affirmed in toto the decision of the RARAD.28 SVHFI subsequently filed a Motion for Reconsideration.

In a Resolution29 dated December 16, 2011, the DARAB reversed its earlier ruling and granted SVHFI's motion. It declared the subject property exempt from the coverage of the CARP and consequently ordered the cancellation of the CLOAs issued in the name of respondents. The dispositive portion of the Resolution reads: WHEREFORE , the Motion for Reconsideration is hereby GRANTED and the Decision dated 24 January 2011 rendered by this Board is SET ASIDE and a new judgment is rendered: 1.

Ordering the Register of Deeds of Pampanga to cancel the Certificate of Land Ownership Award Nos. 00809657 and 00809658 in the name of Renato Garcia; 00809454 in the name of Jesus Galang; 00809455 in the name of Rogelio Calalang; 00809457 in the name of Luis Caparas; 00809458 in the name of Trinidad Garcia; and 00809459 in the name of Domingo Manalang; 2. Ordering the appellees to surrender their respective CLOAs to the Register of Deeds of Pampanga; 3. Ordering the appellees' foundation and /or any person/s acting in its behalf to maintain the appellees from peaceful possession on their respective areas until payment of disturbance compensation is effected.

4. Ordering the appellees to vacate their respective areas and turn over the physical possession thereof to appellant-foundation upon payment of disturbance compensation; and 5. Directing the Municipal Agrarian Reform Officer (MARO) of Mabalacat, Pampanga to assist the parties in the computation of the disturbance compensation.

SO ORDERED.30 Later, on December 17, 2013, the Office of the President issued an Order in OP Case No. 09-1-469 where it affirmed the findings of the DAR Secretary concerning SVHFI's Application for Exemption (DARCO Order31 EX-0712-489, DARCO Order32 No. EX-0808-377, DARCO Order33 No. EX-0905-133), viz.: This resolves the Appeal dated 4 December 2009 filed by oppositor-appellants Orlando Garcia, et al. from the Orders dated 10 December 2007, 29 August 2008 and 13 May 2009, all rendered by the Office of the Secretary-Department of Agrarian Reform (OSEC-DAR). After a careful study and thorough evaluation of the records of the case, this Office is convinced of the OSEC-DAR rulings and finds no cogent reason to depart from the assailed Orders. This Office hereby adopts by reference the findings of fact and conclusions of law contained in the OSEC-DAR Orders dated 10 December 2007, 29 August 2008 and 13 May 2009, copies of which are attached hereto as Annexes "A", "B", and "C", respectively.

WHEREFORE , the Orders appealed from are hereby AFFIRMED in toto. SO ORDERED.34 Undeterred, respondents appealed to the CA. Respondents argued that the DARAB committed an error when the latter set aside its own Decision and rendered a Resolution which effectively caused the cancellation of the CLOAs awarded to them.

In a Decision35 dated March 27, 2014, the CA granted respondents' petition and reinstated the original decision of the DARAB dated January 24, 2011. The fallo of the CA Decision reads: WHEREFORE , premises considered, the instant petition is hereby GRANTED. The assailed Resolution dated December 16, 2011 of the Department of Agrarian Reform Adjudication Board is hereby REVERSED and SET ASIDE.

Its Decision dated January 24, 2011 is hereby ordered REINSTATED. SO ORDERED.36 SVHFI filed a Motion for Extension of Time to File a Motion for Reconsideration on April 22, 2014 and, on May 9, 2014, filed a Motion for Reconsideration.37 Both these motions were denied by the CA in a Resolution38 dated July 11, 2014. Hence, the present petition.

The Issue The crux of this case is whether or not Lot No. 554-D-3 is covered by the CARP pursuant to RA No. 6657. The determination of this issue, in turn, hinges on the question of whether or not the CA erred when it reversed the Resolution of the DARAB which declared Lot No. 554-D-3 exempt from coverage and, in effect, caused the cancellation of the CLOAs issued to respondents. Our Ruling The Court grants the petition.

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

There are, however, recognized exceptions to this rule, one of which is when the findings of fact are conflicting.39 To begin with, it must be pointed out that insofar as jurisdiction is concerned, the Court agrees with the CA that the DARAB did not act beyond the scope of its function when the latter declared Lot No. 554-D-3 exempt from the coverage of the CARP. As gleaned from the records, the DARAB merely adopted the findings of the DAR Secretary who, in an Order40 dated December 10, 2007, granted SVHFI'S Application for Exemption of the subject property from CARP coverage. In the assailed decision, the CA exhaustively discussed the scope of jurisdiction of the DAR Secretary insofar as matters involving the administrative implementation of R.A. No. 6657 are concerned.

In cases involving the implementation of agrarian laws, the determination of the land's classification as agricultural or non-agricultural (e.g., industrial, residential, commercial, etc.) and, in turn, whether or not the land falls under agrarian reform exemption, must be preliminarily threshed out before the DAR, particularly, the DAR Secretary, pursuant to DAR Administrative Order No. 6, Series of 1994. Citing Section 3, Rule II of the DARAB 2003 Rules of Procedure, the CA correctly explained that the DAR Secretary has exclusive jurisdiction over matters involving the classification and identification of landholdings for coverage under the CARP, as well as applications for exemptions. To reiterate, Section 3 states: SECTION 3.

Agrarian Law Implementation Cases. - The Adjudicator or the Board shall have no jurisdiction over matters involving the administrative implementation of RA No. 6657, otherwise known as the Comprehensive Agrarian Reform Law (CARL) of 1988 and other agrarian laws as enunciated by pertinent rules and administrative orders, which shall be under the exclusive prerogative of and cognizable by the Office of the Secretary of the DAR in accordance with his issuances, to wit: 3.1 Classification and identification of landholdings for coverage under the agrarian reform program and the initial issuance of CLOAs and EPs, including protests or oppositions thereto and petitions for lifting of such coverage; 3.2 Classification, identification, inclusion, exclusion, qualification, or disqualification of potential/actual farmer-beneficiaries; 3.3 Subdivision surveys of land under CARP; 3.4 Recall, or cancellation of provisional lease rentals, Certificates of Land Transfers (CLTs) and CARP Beneficiary Certificates (CBCs) in cases outside the purview of Presidential Decree (PD) No. 816, including the issuance, recall, or cancellation of EPs or CLOAs not yet registered with the Register of Deeds; 3.5 Exercise of the right of retention by the landowner; 3.6 Application for exemption from coverage under Section 10 of RA 6657;41 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 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.42 Simply put, the prerogative and authority with regard to the classification and identification of lands included or exempted from coverage under the CARP vests exclusively in the DAR Secretary and no one else. Applying this to the present case, it cannot be said that the DARAB encroached on the authority of the DAR Secretary in the latter's determination of which lands fall under the coverage of the CARP.

As correctly explained by the CA, the DARAB, in its Resolution dated December 16, 2011, merely relied on and adopted the Order of the DAR Secretary which granted SVHFI's previous Application for Exemption of Lot No. 554-D-3 from the coverage of the CARP. The DARAB Resolution, in part, reads: It is also shown that on 10 December 2007, then DAR Secretary Nasser C. Pangandaman, granted the application for exemption from CARP Coverage over the subject land with an area of 25.5699 hectares owned by the appellant-foundation. In granting the said application, the following pieces of evidence were taken into consideration x x x.

x x x x In this connection, the subject land is exempted from the coverage of the CARP. Such being the case, the CLOAs issued to the farmer-beneficiaries should be cancelled pursuant to Administrative Order No. 2, Series of 1994.43 It is, however, essential to point out that the CA erred when it stated that the DARAB committed an error when the latter reversed its earlier Decision on the basis of the Orders of the DAR Secretary dated December 10, 2007 and August 29, 2008. In the said Orders, the DAR Secretary granted the application for exemption filed by SVHFI and declared Lot No. 554-D-3 exempt from coverage of the CARP.

According to the CA, the Orders of the DAR Secretary on which the DARAB Resolution was based had already been revoked by the Secretary himself in a later Order dated September 4, 2009; that the DAR Secretary had expressly declared Lot No. 554-D-3 under the coverage of the CARP; and that said declaration was subsequently affirmed in an Order dated October 27, 2009, when the Secretary denied the Motion for Reconsideration filed by SVHFI. We disagree. Lot 554-D-3 was declared exempt from coverage of the CARP by virtue of DARCO Order44 EX-0712-489.

A closer scrutiny of the records shows that the revocation orders cited by the CA and on which it based the assailed decision, pertain to a different Order of Exemption (DARCO Order No. EX-0811-499) which covers an entirely different lot (Lot 530), albeit originating from the same certificate of title (TCT No. 195826-R). To elaborate, the CA decision reads: We, however, find the DARAB has committed an error setting aside its earlier Decision on the basis of the Orders of the DAR Secretary dated December 10, 2007 and August 29, 2008, declaring the subject property exempted from the coverage of the CARP as the same has already been revoked subsequently by the DAR Secretary in his Order dated September 4, 2009. In the said Order, the DAR Secretary granted the petition for revocation of DARCO Order No. EX-0811-499 which granted in favor of SVHFI an Order of Exemption over a 55.8721 hectares of land covered by TCT No. 195826-R. As mentioned earlier by SVHFI in its own pleadings, TCT No. 195826-R covers Lot No. 554, the parcel of land from which the subject property, Lot No. 554-D-3, originated from.

With the said Orders, the DAR Secretary has expressly declared that the subject property is under the coverage of the CARP. The said Order was then affirmed subsequently by the DAR Secretary in his Order dated October 27, 2009, when he denied the Motion for Reconsideration filed by SVHFI. x x x x As explained above, the DAR Secretary has exclusive jurisdiction over issues involving non-coverage of a land under the CARP.

By virtue of its Orders dated September 4 and October 27, 2009 revoking the order of exemption over the subject property, the DAR Secretary has expressly ruled that the same is under the coverage of the CARP. It was, thus, an error on the part of the DARAB to rely on the former Orders issued by the DAR Secretary after it has subsequently revoked the exemption previously granted to SVHFI. x x x x Besides, assuming that the DAR Secretary erred in revoking the exemption previously granted to SVHFI, under Section 33 of the 2003 Rules of Procedure for ALI Cases, the decision of the DAR Secretary should be appealed to the Office of the President In this case, the Orders of the DAR Secretary declaring the subject properly under the coverage of the CARP was affirmed by the Office of the President in its Decision dated June 10, 2010, when SVHFI appealed to the said office the revocation of the Exemption Order previously issued in its favor.

Verily, there can be no doubt as to the coverage of the CARP over the subject property.45 To clarify, Lot No. 554-D-3 was exempted from coverage under the CARP pursuant to DARCO Order No. EX-0712-489 dated December 10, 2007 and DARCO Order No. EX(MR)-0808-377 dated August 29, 2008. Here, the Order for Revocation of Exemption dated September 4, 2009 which was cited by the CA, specifically revoked DARCO Order No. EX-0811-499 (Lot No. 530). Clearly, the CA erred when it mistakenly applied the Order of Revocation to Lot No. 554-D-3- a lot separate and distinct from Lot No. 530.

In the same vein, the Decision dated June 10, 2010 that was issued by the Office of the President (OP) did not, in any way, affect the exemption orders granted to SVHFI insofar as Lot No. 554-D-3 is concerned. DARCO Order No. EX-0712-489 and DARCO Order No. EX(MR)-0808-377 remain valid to this day and have, in fact, been affirmed by the OP in its Decision dated December 17, 2013 (OP Case No. 09-1-469). Lot 554-D-3 had been reclassified to purposes other than agricultural prior to the passage of RA No. 6657 As borne out by the records, Lot No. 554-D-3 was originally part and parcel of a bigger tract of land with an area of 71.8546 hectares, more or less.

Later on, the area of the said property was reduced to 66.9017 hectares under TCT No. 518199 and further reduced to 55.871 hectares under TCT No. 195826-R. The said parcel of land was again subdivided into eight smaller lots and one of such lots was designated as Lot No. 554-D-3 with an area of 25.5699 hectares, more or less, covered by TCT No. 549661-R, and registered with the Registry of Deeds on October 23, 2003. SVHFI has remained adamant in its claim that, prior to the effectivity of R.A. No. 6657, Lot No. 554-D-3 was already reclassified as residential land by the local government of Mabalacat, Pampanga through its Comprehensive Land Use Plan/Zoning Ordinance (CLUP/ZO) and subsequently ratified by the Human Settlements Regulatory Commission (HSRC, now HLURB) in Resolution No. R-41-3, Series of 1980.46 To support its claim that Lot No. 554-D-3 had already been reclassified as early as 1980, SVHFI submitted the following documents, among others, when it applied for exemption: