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[G.R NO. 200454.

October 22, 2014]


HOLY TRINITY REALTY & DEVELOPMENT CORPORATION, petitioner,
vs. VICTORIO DELA CRUZ, LORENZO MANALAYSAY,
RICARDO MARCELO, JR. and LEONCIO DE GUZMAN, respondents.

FACTS:
A parcel of land in Bulacan is registered to Freddie Santiago. The Dakila
property used to be tenanted by Susana Surio and the others but the tenants freely
and voluntarily relinquished their tenancy rights in favor of Santiago through their
respective sinumpaang pahayag in exchange for some financial assistance and
individual homelots titled and distributed in their names.
Holy Trinity purchased the remaining 208, 050 sq. m. of the Dakila property
from Santiago. Santiago caused the transfer of the title to Holy Trinity and
subdivided the Dakila property into 6 lots. Holy Trinity then develop the property by
dumping filing materials on the topsoil, erected a perimeter fence and steel gate
and later on established its field office on the property.
In 1988, the Sanggunian Bayan ng Malolos passed Municipal Resolution No.
16-98 reclassifying four of the six subdivided lots belonging to the Holy Trinity into
residential lots. The Municipal Planning and Development Office (MPDO) of Bulacan
issued the Certificate of Eligibility for Conversion, Preliminary Approval and
Locational Clearance in favor of Holy Trinity for its residential subdivision project on
the Dakila property.
In 1999, Holy Trinity purchased another from Santiago another parcel of land
in Bulacan. In 2006, Silvino Manalad and the alleged heirs of Felix Surio wrote to
Provincial Agrarian Reform Officer (PARO) of Bulacan to request an investigation of
the sale of the Dakila property. It was followed by the letter request of the Chairman
of Sumapang Matanda Barangay Agrarian Reform Council (BARC) to place the Dakila
property within the coverage of Operation Land Transfer (OLT) pursuant to PD 27.
DAR Provincial Office of Bulacan filed a petition to annul the sale of the Dakila
property with the Provincial Agrarian Reform Adjudicator (PARAD) of Bulacan.

RULING OF THE DAR REGIONAL OFFICE:


OIC-Regional Director in Pampanga issued an order granting the letter
request of BARC Chairman. He claimed that the sale of the Dakila property was a
prohibited transaction under PD 27, Sec. 6 of RA 6657 and DAR Admin. Order no. 1,
Series of 1989 and that Holy Trinity was disqualified from acquiring land under RA
6657 because it is a corporation. Petitioner assailed the order and file Motion to
Withdraw/Quash/Set Aside, while the motion was pending the Register of Deeds
issued emancipation patents (EP) pursuant to the order of the OIC-RD.

RULING OF THE DAR SECRETARY:


Holy Trinity appealed to Dar Sec. claiming the request for coverage under PD
27 and the filing of the petition for annulment of sale in DARAB constituted forum
shopping and the EPs are premature. But it was denied, holding that forum was not
committed because the cause of action in the letter request and the action for
cancellation of the deed of sale before DARAB were distinct and separate, that EPs
were regularly issued and that the resolution of the DARAB did not affect the validity
of EPs. DAR Sec. ruled that Dakila property was not exempt from the coverage of
PD 27 and Ra 6657 because Municipal Resolution No. 16-98 did not change or
reclassify but merely re-zoned the Dakila property.

RULING OF THE OFFICE OF THE PRESIDENT:


The OP reversed the ruling of the DAR Sec upon its finding that the Dakila
Property had cease to be suitable for agriculture and had been reclassified as
residential land pursuant to Mun. Reso. No. 16-98. It shows that the City Assessor of
Malolos and the Provincial Assessor of Bulacan have considered these lands as
residential for taxation purposes. Dela Cruz appealed to the CA.

RULING OF THE CA:


CA reversed that set aside the decision of the OP. It declared that prior to the
effectively of RA6657 and even after the passage of Mun. Reso 16-98, the Dakila
property was an agricultural land, that there was no valid reclassification because
Sec. 20 of Ra 7160 and Memo Cir. 54 required an ordinance, not resolution and the
findings of DAR should be respected.

ISSUES:
WON CA erred that Dela Cruz and others EPs from DAR are not
legitimate tenants of the Dakila property; that the sale and property of
titles in the name of Holy Trinity was not nullified by the DARAB or the
regular courts; that the Bonafide tenants of the Dakila property have
validly surrendered their tenancy rights in favor of Holy Trinitys
predecessor-in-interest and; that Dakila property was no longer
tenanted, no longer suitable to agriculture at the time of its coverage
under agrarian reform and is actually being residential.
WON CA erred in failing to rule on the illegality of the manner the DAR
issuing the summary coverage of the Dakila property under the CARP,
its extra-judicial cancellation of Holy Trinitys title without due process
and the premature issuance of EP
WON CA erred in applying RA 6657 even though DAR placed the Dakila
property under the coverage of PD 27.

PETITIONERS ARGUMENTS:
Holy Trinity argues that CA ignored issues vital to the complete determination
of the parties respective rights over the Dakila property. They argue that CA should
have ruled on the propriety of issuing the EPs, that since the petition was still
pending in DARAB, DAR should have withheld the issuance of the EPs.
Holy Trinity claimed that they were deprived of due process because the
requirements of notice and conduct off public hearing and a field investigation were
not strictly complied with by the DAR pursuant to RA 6657 and DAR Admin Order
No. 12, Series of 1998.
Holy Trinity asserted that CA erred in placing Dakila property under the
coverage of RA 6657 when the order of OIC-RD applied the provisions of PD27 and
that the two laws should be differentiated from each other. CA, according to Holy
Trinity, should have dismissed Dela Cruz petition for review due to its defective
certification, pointing to the verification having been signed by BARC Chairman.
RESPONDENTS ARGUMENT:
They claimed the CA correctly set aside the issue of whether or not they were
qualified beneficiaries because it was not the issue raised in the letter request; that
CA could not have ruled on the validity of the Dakila property in light of the pending
action in DARAB; the waivers by the tenants were illegal and that the issuance of
the EPs was a necessary consequence of placing the Dakila property under the
coverage of PD 27.

RULING:
SC ruled that CA rightly allowed the petition for review of Dela Cruz, SC
underscore that the defect was even lifted upon the voluntary submission by
the respondents themselves of their corrected verification in order to comply
with the Rules of Court. The respondents, as identified beneficiaries,
had legal standing and interest to intervene to protect their rights
or interest under RA 6657. This is clear from Sec. 19 of RA 9700
which amended RA 6657 by adding 50-A, to wit:
Section. 50-A. Exclusive Jurisdiction on Agrarian Dispute.
In cases where regular courts or quasi-judicial bodies have competent
jurisdiction, agrarian reform beneficiaries or identified beneficiaries
and/or their associations shall have legal standing and interest to
intervene concerning their individual or collective rights and/or interest
under the CARP.
Under Sec. 8 of Rule 51 of Rules of Court, Ca is vested with sufficient
authority and discretion to review matters, not assigned as errors on appeal,
if it finds that consideration thereof is necessary in arriving at a complete and
just resolution of the case or to serve the interests of justice or to avoid
dispensing piecemeal justice.

In the case at bar, the validity of EPs cannot deny that it was closely intertwined
with issue of whether the Dakila property was covered by the agrarian reform laws.
When Ca declared that Dakila property was within the coverage of RA 6657, CA only
left more questions unresolved. The case was originated when BARC Chairman
requested that the Dakila property be placed under the OLT pursuant to PD 27. SC
agrees with the Holy Trinity that the two laws are distinct from one another.

RA 6657 PD 27
Applies to all agricultural lands in Requires that the covered
which agricultural activities are agricultural land be tenanted and
conducted primarily devoted to rice or corn
cultivation.
A certificate of land ownership Ownership of the beneficiary in
award (CLOA) is issued for the this law is evidenced by a EP
ownership of the beneficiary

Thus CA could not simply set aside the issue of whether the EPs issued to the
respondents were validly made by the DAR considering its declaration that the
Dakila property was subject to RA 6657.

Under RA 7160, local governments are vested with the property to reclassify
lands. However, Sec. 20, Chap. II, Title I of RA 7160 provides that:

Section 20. Reclassification of Lands. (a) A city or municipality


may, through an ordinance passed by the sanggunian after
conducting public hearings for the purpose, authorize the
reclassification of agricultural lands and provide for the manner of the
utilization or disposition in the following case: (1) when the land ceases
to be economically feasible and sound for agricultural purposes as
determined by DAR or (2) where the land shall have substantially
greater economic value for residential, commercial, or industrial
purposes, as determined by the sanggunian concerned.

Thus an ordinance is needed to reclassify agricultural lands and such may


only be passed after the conduct of public hearings. Holy Trinity claims the
reclassification based on the Mun. Reso. No. 16-98. SC ruled that the resolution
was ineffectual for that purpose. A resolution was a mere declaration of
the sentiment or opinion of the lawmaking body on a specific matter that
was temporary in nature and differed from an ordinance in that the latter
was a law by itself and possessed a general and permanent character.
There was also no showing of the requisite public hearing. Thus in the
absence of the valid and complete reclassification, the Dakila property
remained under the category of an agricultural land. Nonetheless, the
Dakila property was not an agricultural land subject to the coverage of RA
6657 or PD 27.

RA 6657 PD 27
For a land to be under the coverage of For a land to be covered under PD
RA 6657, it must either be primarily 27, it must be devoted to rice and
devoted to or be suitable for agriculture. corns.
Agricultural land is one that is There must be a system of share-
devoted to agricultural activity crop or lease-tenancy obtaining
and not classified as mineral, therein.
forest, residential, commercial or If either the requisite is absent,
industrial land. the land must be excluded
Agricultural activity includes
the cultivation of the soil;
including the harvesting of such
farm products and other farm
activities and practices performed
by a farmer in conjunction with
such farming operations done by
persons whether juridical or
natural.

Thus two requisites are


needed before the land can be
placed under the coverage of
RA 6657 (1) land must be
devoted to agricultural
activity and (2) land must not
be classified as mineral,
forest, residential, commercial
or industrial land.

Though the second requisite was complied with in the Dakila


property, the first requisite is wanting because no evidence was submitted
to show that any agricultural activity were being performed on the Dakila
property. SC take note that the tenant voluntarily surrender their tenancy rights
because the land was not conducive to farming by reason of elevation and in the
Whereas Claus of the Mun. Reso. No. 16-98 that mentioned that Dakila property was
not fit for agricultural use due to lack of sufficient irrigation and it was more suitable
for residential use.
PD 27 is still not applicable because Dakila property was still not within the
scope of the law. The first requisite of PD 27 was not sufficiently established. The
report submitted by the Legal Services Division did not mention whatsoever the
agricultural activities performed in the Dakila property. There was also no showing
the Dakila property was devoted for rice or corn cultivation. Thus Dakila property
should be excluded from the OLT. There was also no showing that the respondents
were engaged in any agricultural activities or agreed with Santiago or Holy Trinity
on the sharing of harvest.

WHEREFORE, the Court GRANTS the petition for review on certiorari;


REVERSES AND SET ASIDE the decision of the CA; REINSTATES the assailed
decision of the OP; DIRECTS the cancellation of Emancipation patents to the
respondent for being NULL AND VOID AND ORDERS the respondents to pay the
costs of suit.