Holy Trinity vs. Dela Cruz

[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 EP’s 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 EP’s were regularly issued and that the resolution of the DARAB did not affect the validity of EP’s. 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: 

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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 Trinity’s 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 Trinity’s 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.

PETITIONER’S 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. RESPONDENT’S 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 Applies to all agricultural lands in

Requires

PD 27 that the

covered

which agricultural activities are conducted A certificate of land ownership award (CLOA) is issued for the ownership of the beneficiary

agricultural land be tenanted and primarily devoted to rice or corn cultivation. Ownership of the beneficiary in this law is evidenced by a EP

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 For a land to be under the coverage of RA 6657, it must either be primarily devoted to or be suitable for agriculture.  “Agricultural land” is one that is devoted to agricultural activity and not classified as mineral,

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PD 27 For a land to be covered under PD 27, it must be devoted to rice and corns. There must be a system of sharecrop or lease-tenancy obtaining therein.

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forest, residential, commercial or industrial land. “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.

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If either the requisite is absent, the land must be excluded

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.