[ G.R. No. 229983. July 29, 2019 ] 858 Phil. 308
SECOND DIVISION
[ G.R. No. 229983. July 29, 2019 ]
FARMER-BENEFICIARIES BELONGING TO THE SAMAHANG MAGBUBUKID NG BAGUMBONG, JALAJALA,[*] RIZAL,[**] REPRESENTED BY THEIR PRESIDENT, TORIBIO M. MALABANAN, PETITIONERS, VS. HEIRS OF JULIANA MARONILLA, REPRESENTED BY ATTY. RAMON M. MARONILLA, RESPONDENTS. D E C I S I O N
PERLAS-BERNABE, J.:
Before the Court is a petition for review on certiorari[1] assailing the Decision[2] 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 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 164420[6] (inclusive) and 164430[7] 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 (CLTs) 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) 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 Order[20] 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 Order[21] dated August 15, 2008 which, however, reduced the retention area from 60 to 52 has. Petitioners’ appeal to the Office of the 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] 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:
TCT No.
Lot No.
PSD No.
Area [(Ha.)]
Zoning/Land Use
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) 422059
3-J
56828
61.7208
Agro-industrial/ Forest Conservation/ Riceland
(164431) 422059
3-K
56828
51.7113
Riceland/ Agro-industrial
(164432) M-13551
3-L
56828
63.2478
Riceland/ Residential[29]
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 noted:
TCT No.
Lot No.
Area Per Title (Ha.)
Remarks
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, banana.
3
164412
1-C
56.4944
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 VOS and OLT.
8
164417
1-H
43.0780
Riceland and Agro-industrial. A little portion of Residential. Covered under OLT.
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 is Residential.
10
164419
1-J
49.7049
Riceland, mango trees. Covered under OLT.
11
164420
1-K
56.1463
Riceland and Residential. Covered under OLT. Planted with banana, mango, root crops like patola.
12
(164430) 422059
3-J
61.7208
Agro-industrial with a little portion of riceland. Covered under OLT.
13
(164431) 422059
3-K
[51.7113]
Riceland. Covered under OLT. Sold to Alta Tierra Resources, Inc.
14
(164432) M-13551
3-L
63.2478
Riceland and Residential. 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 27 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 OLT program, considering that they had been devoted to rice and corn since October 21, 1972.[36]
Subsequently, the Exemption Committee recommended the exemption of a 447.4025-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/Forest 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 27 pursuant to which the EPs were issued.[39] However, it recommended the denial of the application for 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 No.
Lot No.
Area Per Title (Ha.)
Area Applied (Ha.)
Recommended for Exemption (Ha.)
Bases/Reasons
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.
164418
1-I
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) 422059
3-J
61.7208
49.7508
32.9549
16.7959 hectare riceland issued with EPs, not exempted. HSRC Resolution No. 36, Series of 1981.
(164432) M-13551
3-L
63.2478
17.7325
7.0244
10.2081 hectare riceland issued with EPs, not exempted. HSRC Resolution No. 36, Series of 1981.
723.9428
476.5006
447.4025[42]
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.
Unperturbed, petitioners filed a petition for review[47] 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 Decision[50] 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
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 turn, 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]
B. JURISDICTION OVER CASES INVOLVING THE CANCELLATION OF EPS, CLOAS, 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. 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 respondents (also before the DAR)[63] for the purpose of cancelling the EP and CLOA titles of the affected tenants. This is because “[a]grarian reform 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, 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 longer 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 Resources[69] (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 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 3[74] 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 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-13551[82] 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 1990[85] clarified this definition[86] of “agricultural land” as follows:
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 HLURB 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 DENR, 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:
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. 13-90[92] provides for the rules and procedures 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 of law, 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 refer[93] the matter to the Office of the DAR Secretary[94] 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 erred in excluding the same from the CARP pursuant to Section 3 (c) of RA 6657, as amended. DOJ Opinion No. 67, Series 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 10[97] 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]ll 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 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, 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 OLT 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.
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 converted 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 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]ll 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 Office 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.
SO ORDERED.
Carpio (Chairperson), Caguioa, J. Reyes, Jr., and Lazaro-Javier, JJ., concur.