Agrarian Reform Beneficiaries Association v. Nicolas
REITERATIONFacts
The Antecedents: Philippine Banking Corporation (PhilBanking) was the registered owner of two parcels of land. The Department of Agrarian Reform (DAR) issued a notice of coverage declaring the lands within the coverage of the Comprehensive Agrarian Reform Law (CARL). PhilBanking protested the coverage. Despite the protest, the DAR cancelled PhilBanking's titles, transferred ownership to the Republic of the Philippines, and distributed the land to farmer-beneficiaries of Agrarian Reform Beneficiaries Association (ARBA) via a Certificate of Land Ownership Award (CLOA). Procedural History: On March 24, 1994, PhilBanking executed a deed of assignment in favor of respondents Loreto G. Nicolas and Olimpio Cruz, who continued the protest. Respondents filed a complaint with the DARAB (Tagum City) praying for the cancellation of the CLOA and reinstatement of titles. The DARAB (Tagum) ruled in favor of respondents, declaring the land exempt from CARP coverage due to its reclassification as urban/urbanizing zone per City Ordinance No. 363, Series of 1982. The DARAB Central Office reversed this decision, upholding the CLOA. Respondents appealed to the Court of Appeals (CA). The CA reversed the DARAB Central Office ruling, ordering the cancellation of the CLOA, reinstatement of PhilBanking's titles, and maintaining the possession of ARBA members if they were tenants prior to June 15, 1988, declaring the lands exempt from CARL. The Petition: Agrarian Reform Beneficiaries Association (ARBA), represented by Josephine B. Omictin, filed a petition for review on certiorari with the Supreme Court, assailing the CA decision.
Issue(s)
Whether respondents, as assignees, have a valid cause of action. Whether the ruling in Natalia Realty, Inc. v. Department of Agrarian Reform is applicable to the present case. Whether the subject parcels of land are exempted from the coverage of CARL. Whether the findings of fact of the DARAB Central Office are final and conclusive.
Ruling
The petition is DENIED and the appealed Decision of the Court of Appeals is AFFIRMED. The subject parcels of land are declared exempted from the coverage of the Comprehensive Agrarian Reform Law (CARL).
Ratio Decidendi
On the issue of cause of action: The Court held that respondents, as lawful assignees and successors-in-interest of PhilBanking, possess a valid cause of action. A cause of action arises from an act or omission violating a legal right, and respondents, standing to be directly benefited or injured by the resolution, rightfully pursued the actions initiated by their assignor to protect their rights and interests in the subject lands. The Court also noted that this was the first time the issue of cause of action was raised, suggesting it might be a belated attempt to skirt the genuine issue of CARP coverage. On the applicability of Natalia Realty, Inc. v. Department of Agrarian Reform: The Court affirmed the CA's finding that the facts in the present case are similar to those in Natalia Realty. Both cases involve lands designated for non-agricultural purposes and classified as such prior to June 15, 1988, the effectivity date of CARL. In Natalia, lands converted to non-agricultural uses by government agencies before CARL's effectivity were held outside its coverage. Similarly, the subject lands in this case were reclassified as urban zones by City Ordinance No. 363, Series of 1982, and approved by the HLURB, rendering them non-agricultural and thus outside CARL's scope. The Natalia ruling was reiterated in subsequent cases like Pasong Bayabas Farmers Association, Inc. v. Court of Appeals and Junio v. Garilao, affirming the exemption of lands validly reclassified to non-agricultural uses before CARL's effectivity. On the exemption from CARP coverage: The Court reiterated that lands reclassified as urban or non-agricultural prior to June 15, 1988, are clearly outside the coverage of CARL. The subject parcels of land were reclassified as within an urban/urbanizing zone per City Ordinance No. 363, Series of 1982, and this reclassification was approved by the City Zoning Administrator and the HLURB Regional Office, and reflected in the Official Comprehensive Zoning Map of Davao City. This classification as non-agricultural means they could be utilized for residential, commercial, and industrial purposes, making them ineligible for compulsory acquisition under CARL. The Court emphasized that the authority of the DAR to reclassify or convert agricultural lands is limited to those effective from June 15, 1988, onwards. On the finality of DARAB findings: The Court held that the findings of fact of the DARAB Central Office were not supported by substantial evidence and therefore could not be deemed final and conclusive. While Section 54 of RA No. 6657 states that DAR findings are final and conclusive if based on substantial evidence, the CA found this lacking. The DARAB's conclusion that PhilBanking did not oppose the acquisition was erroneous, as records showed PhilBanking vigorously protested, albeit through an RTC complaint. The DARAB's reasoning regarding respondents' lack of due process was also flawed, as respondents raised the issue in relation to their assignor's rights. Thus, the DARAB's findings did not meet the substantial evidence requirement for finality.
Main Doctrine
Lands reclassified as urban or non-agricultural prior to the effectivity of the Comprehensive Agrarian Reform Law (CARL) are outside the coverage of CARL, even if the reclassification was approved by government agencies like the Housing and Land Use Regulatory Board (HLURB). The findings of fact of the Department of Agrarian Reform Adjudication Board (DARAB) are not final and conclusive if not supported by substantial evidence.