Republic of the
Supreme
Court
Manila
THIRD DIVISION
|
AYALA LAND,
INC. and CAPITOL
CITIFARMS, INC., Petitioners, - versus - SIMEONA
CASTILLO, LORENZO PERLAS, JESSIELYN CASTILLO, LUIS MAESA, ROLANDO BATIQUIN,
and BUKLURAN MAGSASAKA NG TIBIG, as represented by their
attorney-in-fact, SIMEONA CASTILLO, Respondents. |
G. R. No. 178110 Present: CARPIO MORALES, J., Chairperson, BRION, BERSAMIN, VILLARAMA, JR.,
and SERENO, JJ. Promulgated: June 15, 2011 |
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D
E C I S I O N
SERENO, J.:
This is a Petition for
Review on Certiorari under Rule 45 of the 1997 Rules of Civil Procedure
questioning the Decision[1] dated
The CA found merit in
the OPs rationale for maintaining the Conversion Order, yet invalidated the
same on the basis that a Notice of Coverage and a Notice of Acquisition had
already been issued over the lands hence, they could no longer be subject to
conversion. Thus, landowner Capitol Citifarms, Inc. (CCFI) and its
successor-in-interest Ayala Land, Inc. (ALI) filed the present petition
imputing error on the appellate court for the following reasons: 1) the CA
resolved an issue that the alleged Notice of Acquisition prevents the land
from being converted raised for the first time on appeal, 2) the CAs finding
has no factual basis, 3) the DAR itself found that the subject property has
long been converted to non-agricultural uses, and 4) a Certificate of Finality
of the Braganza Order has already been issued.
We grant certiorari on
the following procedural and substantial grounds:
I.
For
the first time on appeal, respondents raised a new issue that had never been
passed upon by the DAR or by the Office of the President; hence, the CA is
barred from entertaining the claim.
II. The rule that a prior Notice of Acquisition bars the issuance of a Conversion Order is only a guiding principle; upon applicants compliance with the application requirements, the DAR is rightly authorized to determine the propriety of conversion.
III.
Respondents
are barred from appealing the Conversion Order long after it has attained
finality.
IV.
The
conversion and/ or reclassification of the said lands has become an operative
fact.
V.
The
OP has long resolved that the lands that are the subject of this case are
exempted from the Comprehensive Agrarian Reform Law (CARL) partly to maintain
the stability of the countrys banking system.
The uncontroverted
factual antecedents, as culled from the records, are as follows:
CCFI owned two
parcels of land with a total area of 221.3048 hectares located at Barangay
Tibig in Silang,
In the meantime, CCFI
was unable to comply with its mortgage obligations to MBC. The latter
foreclosed on the lien, and the land was awarded to it in an auction sale held
on
On the same date as the
execution of the Deed of Partial Redemption,
Prompted
by the numerous proceedings for compulsory acquisition initiated by the DAR
against MBC, Governor Reyes requested then DAR Secretary Ernesto Garilao to
issue an order exempting the landholdings of MBC from CARL and to declare a
moratorium on the compulsory acquisition of MBCs landholdings. On
Instead of ruling on the motion alone, however, the OP, through Executive Secretary Ruben D. Torres, decided to rule on the merits of the petition, as what is involved in this case is the susceptibility of a bank to undergo rehabilitation which will be jeopardized by the distribution of its assets[7] Secretary Torres remanded the case to the DAR and ordered the agency to determine which parcels of land were exempt from the coverage of the CARL. He stated that the ends of justice would be better served if BSP were given the fullest opportunity to monetize the banks assets that were outside the coverage of CARL or could be converted into non-agricultural uses. He then ordered the DAR to respect the BSPs temporary custody of the landholdings, as well as to cease and desist from subjecting MBCs properties to the CARL or from otherwise distributing to farmer-beneficiaries those parcels of land already covered.[8]
Secretary Torres denied
the Motion for Reconsideration filed by the DAR. He reiterated the need to
balance the goal of the agrarian reform program vis--vis the interest of the bank (under receivership by the BSP),
and the banks creditors (85% of whose credit, or a total of P8,771,893,000, was payable to BSP).[9]
Secretary Garilao
issued a Resolution dated
On
31 October 1997, Secretary Garilao issued Conversion Order No. 4-97-1029-051,
approving the conversion and/or exemption of the 221-hectare property in Silang, based on the findings of the DARs
Center for Land Use Policy, Planning and Implementation (CLUPPI) and of the
Municipal Agrarian Reform Officer (MARO). These agencies found that the
property was exempt from agrarian reform coverage, as it was beyond eighteen
(18) degrees in slope. They recommended conversion, subject to the submission
of several documentary requirements. On
1. A
Certification and a copy of Resolution No. 295-S-96 by the Sangguniang
Panlalawigan of Cavite, adopted in its 4th Special Session, approving the
conversion/ reclassification of the said parcels of land from agricultural to
residential, commercial, and industrial uses;
2. A copy of Resolution No. ML-08-S-96 adopted by the Sangguniang Bayan of Silang, recommending conversion based on the favorable findings by the Committee on Housing and Land Use;[10]
3. Statement
of Justification of economic/social benefits of the proposed subdivision
project; development plan, work and financial plan and proof of financial and
organizational capability;
4. Proof of settlement of claims: a table of the list of tenant-petitioners, the area tilled and the amount of compensation received by each tenant, the Kasunduan,[11] and a compilation of the agreements signed by the one hundred and eighteen (118) tenants waiving all claims over the property.[12]
The Morales Order Revoking the
Grant of Conversion
On 19 May 2000, almost three years after the Conversion Order had been in force and effect, the farmers tilling the subject land (hereinafter known as farmers) filed a Petition for Revocation of Conversion Order No. 4-97-1029-051. They alleged (1) that the sale in 1995 by CCFI to ALI was invalid; and (2) that CCFI and ALI were guilty of misrepresentation in claiming that the property had been reclassified through a mere Resolution, when the law required an ordinance of the Sanggunian.[13] The issue of the alleged Notice of Acquisition was never raised. Neither was there any mention of the issuance of a Notice of Coverage.
CCFI and ALI, on the other hand, argued that the claim of the farmers had prescribed, as mandated by Section 34 of Administrative Order No. (A.O.) 1, Series of 1999, which laid down a one-year prescriptive period for the filing of a petition to cancel or withdraw conversion. They stated further that the farmers had already received their disturbance compensation as evidenced in a Kasunduan, in compliance with the Conversion Order.
On
As for the two issues raised by the farmer-beneficiaries, these were resolved by Secretary Morales in favor of CCFI and ALI. First, he found that CCFI did not violate the order of conversion when it sold the land to ALI, because the prohibition to sell is not a condition for the conversion. In fact, the sale preceded the issuance of the Conversion Order. Second, he ruled that there was no misrepresentation by CCFI and ALI regarding the lands reclassification. However, he found a new issue for withdrawing the grant of conversion, that was not previously raised by petitioner-farmers. Apparently unaware of the earlier history of the land as property in custodia legis, he ruled that the delayed registration of the sale was evidence of respondents intention to evade coverage of the landholding under agrarian reform. Because the sale was concealed from the Register of Deeds, and the land was still agricultural at that time, Secretary Morales opined that ALI and CCFI violated the CARL. It must be remembered however, that contrary to Morales findings, it was the Supreme Court itself that ordered the sale of the lands through its Resolution in G.R. No 85960. Thus there could be no finding by any government body that the sale was illegal.
Secretary Morales never passed upon or even mentioned any matter related to the Notice of Acquisition. The gist of both the Petition for Revocation and the Morales Decision revolved exclusively around the illicit intent behind the sale of the land to ALI:
The gravamen of respondents acts lies not upon the sale by respondent Capitol of the land to ALI, and upon ALI having bought the land from Capitol. It lies somewhere deeper: that the sale was done as early as 1995 prior to the lands conversion, and was concealed in the application until it was registered in 1999.
At
the time of the registration of the deed on
It is important to note, however, that Secretary Morales declared that CCFI and ALI had completed the payment of disturbance compensation to the farmers, as shown by the Kasunduan, which was a waiver of all the farmers rights over the landholding, and by the Katunayan ng Pagbabayad, which expressly acknowledged the amounts paid as the full and final settlement of their claims against CCFI and ALI.
The Braganza Order Reversing the
Revocation
On
Secretary Braganza
found that the Deed of Partial Redemption was conditional, and that there was
no transfer of ownership to CCFI or its successor-in-interest, ALI. Hence,
there could be no violation of the CARL arising from an unauthorized transfer
of the land to ALI. In fact, the obligation of ALI to pay the purchase price
did not arise until the DARs issuance of an order of exemption or
conversion. In Secretary Braganzas
words:
Was
ownership included in the bundle of rights that was transferred from CCFI to
ALI? This Office answers in the negative.
For
CCFI to convey ownership to ALI, MBC must have first transferred this right to
CCFI under the DEED OF PARTIAL REDEMPTION for the reason that CCFI can only
convey its present rights and obligations to ALI.
The
fact that MBC is holding on to the Transfer Certificates of Title pending full
payment of the purchase price is indicative of the reservation of ownership in
MBC.
Thus, it is only upon the full payment of consideration shall the title to the subject landholding be issued to CCFI or its successor-in-interest, ALI.[16]
On
The Pagdanganan Order Declaring
FINALITY
In response to Secretary Braganzas grant of the Motion for Reconsideration filed by ALI, the farmers, through their counsel, Atty. Henry So, filed their own Motion for Reconsideration of the Braganza Order. The farmers questioned the jurisdiction of the DAR to determine the ownership of the lands and to determine whether or not the sale was conditional, as these issues are within the ambit of the civil courts. Atty. So found fault with Secretary Braganzas attention to the intricate history of the property,[17] when substantial evidence was all that was required in agrarian cases. He also claimed that the farmers previous counsel, Atty. Dolor, was misleading the farmers into accepting payment in exchange for their tenancy rights.[18]
Secretary Roberto
Pagdanganan issued an Order on
WHEREFORE, premises considered, Order is hereby
issued DENYING both the Motion for Reconsideration dated
FURTHERMORE, the
Bureau of Agrarian Legal Assistance is hereby DIRECTED to issue a Certificate
of Finality of the
Petitioners Appeal before the
Office of the President
The farmers then went to the OP and
raised only two issues:
The Secretary of Agrarian Reform erred in declaring herein counsel to have no more locus standi to represent the farmer-petitioners.
The
Secretary of Agrarian Reform erred in affirming the Order of
The Appeal Memorandum pointed out that DARs grant of conversion was issued under suspicious circumstances. They attached to the Appeal Memorandum an uncertified photocopy of a Notice of Coverage as Annex B.[21] The photocopy of the Notice of Coverage was mentioned in passing when the farmers cited paragraph VI-E of Administrative Order No. 12, Series of 1994. Additionally, farmer-beneficiaries alleged that a Notice of Acquisition was also in existence. No such document, however, could be found in the memorandum or in any prior or subsequent pleadings filed by farmer-beneficiaries. They never stated that the issue of the Notice of Acquisition prevents the conversion of the land.
On
I.
Respondents raised a new issue for the first time on
appeal.
The CA found the Conversion Order valid on all points, with the sole exception of the effect of the alleged issuance of a Notice of Acquisition. In its eight-page Decision, the CA merely asserted in two lines: no less than the cited DAR Administrative Order No. 12 enjoins the conversion of lands directly under a notice of acquisition.[24]
After perusing the records of the DAR and the OP, however, we find no admissible proof presented to support this claim. What was attached to the Petition for Review[25] to the CA was not a Notice of Acquisition, but a mere photocopy of the Notice of Coverage. A Notice of Acquisition was never offered in evidence before the DAR and never became part of the records even at the trial court level. Thus, its existence is not a fully established fact for the purpose of serving as the sole basis the entire history of the policy decisions made by the DAR and the OP were to be overturned. The CA committed reversible error when it gave credence to a mere assertion by the tenant-farmers, rather than to the policy evaluation made by the OP.
Assuming arguendo however, that the farmers had submitted the proper document to the appellate court, the latter could not have reversed the OP Decision on nothing more than this submission, as the issue of the Notice of Acquisition had never been raised before the administrative agency concerned. In fact, the records show that this issue was not raised in the original Petition for Revocation in the second Motion for Reconsideration filed by the farmers before the DAR, and that no Notice of Acquisition was attached to their Appeal Memorandum to the OP. As a consequence, the OP, Secretary Pagdanganan, Secretary Braganza, and Secretary Morales did not have any opportunity to dwell on this issue in their Orders and Decision. Instead, what respondents persistently allege is the concealment of the sale by CCFI and ALI. The three DAR Secretaries, including Secretary Garilao who issued the Conversion Order, correctly found this allegation bereft of merit.
We cannot uphold respondents proposition for us to disregard basic rules, particularly the rule that new issues cannot be raised for the first time on appeal. Aside from their failure to raise the non-issuance of a notice of acquisition before the OP and DAR, they also failed to question the lack of approved town plan at the DAR level, prompting the OP to correctly rule on the latter, thus:
Appellants lapses in not raising the
issues before the DAR which has the expertise to resolve the same and in a
position to conduct due hearings and reception of evidence from contending
parties pertaining to the issue, puts the appellants in estoppel to question
the same for the first time on appeal. Jurisprudence dictates the following:
The petitioner for the first time, to allow him to assume a different posture when he comes before the court and challenge the position he had accepted at the administrative level, would be to sanction a procedure whereby the court which is supposed to review administrative determinations would not review, but determine and decide for the first time, a question not raised at the administrative forum. This cannot be permitted, for the same reason that underlies the requirement of prior exhaustion of administrative remedies to give administrative authorities the prior authority to decide controversies within its competence, and in much the same way that, on the judicial level, issues not raised in the lower court cannot be raised for the first time on appeal. (Aguinaldo Industries Corporation vs. Commissioner of Internal Revenue & Court of Tax Appeals, 112 SCRA 136)[26]
It is well established that issues raised for the first time on appeal and not raised in the proceedings in the lower court are barred by estoppel. Points of law, theories, issues, and arguments not brought to the attention of the trial court ought not to be considered by a reviewing court, as these cannot be raised for the first time on appeal. To consider the alleged facts and arguments belatedly raised would amount to trampling on the basic principles of fair play, justice, and due process.[27] More important, if these matters had been raised earlier, they could have been seriously examined by the administrative agency concerned.[28]
Courts will not interfere in matters which are addressed to the sound discretion of the government agency entrusted with the regulation of activities coming under its special and technical training and knowledgeand the latter are given wide latitude in the evaluation of evidence and in the exercise of their adjudicative functions.[29] This Court has always given primary importance to the DAR Secretarys ruling and will not disturb such ruling without substantial reason:
Considering that these issues involve an evaluation of the DARs findings of facts, this Court is constrained to accord respect to such findings. It is settled that factual findings of administrative agencies are generally accorded respect and even finality by this Court, if such findings are supported by substantial evidence. The factual findings of the Secretary of DAR who, by reason of his official position, has acquired expertise in specific matters within his jurisdiction, deserve full respect and, without justifiable reason, ought not to be altered, modified or reversed.[30]
The
CA erred in passing upon and ruling on an issue not raised by the farmers
themselves. This Court must not countenance the violation of petitioners right
to due process by the CA upholding its conclusion founded on a legal theory
only newly discovered by the CA itself.
This is especially insupportable considering the long history of
government affirmation of the conversion of the subject land.
II. Provision in DAR A.O. 12-94 is only a guiding principle.
Assuming for a moment that the notice of acquisition exists, it is not an absolute, perpetual ban on conversion. The provision invoked in AO 12-94, paragraph E, disallows applications for conversion of lands for which the DAR has issued a notice of acquisition. But paragraph E falls under heading VI, Policies and Guiding Principles. By no stretch of the imagination can a mere principle be interpreted as an absolute proscription on conversion. Secretary Garilao thus acted within his authority in issuing the Conversion Order, precisely because the law grants him the sole power to make this policy judgment, despite the guiding principle regarding the notice of acquisition. The CA committed grave error by favoring a principle over the DARs own factual determination of the propriety of conversion. The CA agreed with the OP that land use conversion may be allowed when it is by reason of changes in the predominant use brought about by urban development, but the appellate court invalidated the OP Decision anyway for the following reason:
The argument is valid if the agricultural land is still not subjected to compulsory acquisition under CARP. But as we saw, there has already been a notice of coverage and notice of acquisition issued for the property...Verily, no less than the cited DAR Administrative Order No. 12 enjoins conversions of lands already under a notice of acquisition. The objectives and ends of economic progress must always be sought after within the framework of the law, not against it, or in spite of it.[31]
However, under the same heading VI, on
Guiding Principles, is paragraph B (3), which reads:
If
at the time of the application, the land still falls within the agricultural
zone, conversion shall be allowed only on the following instances:
a)
When
the land has ceased to be economically feasible and sound for agricultural
purposes, as certified by the Regional Director of the Department of
Agriculture (DA) or
b)
When
the locality has become highly urbanized and the land will have a greater
economic value for residential, commercial and industrial purposes, as
certified by the local government unit.
The thrust of this
provision, which DAR Secretary Garilao rightly took into account in issuing the
Conversion Order, is that even if the land has not yet been reclassified, if
its use has changed towards the modernization of the community, conversion is
still allowed.
As DAR Secretary, Garilao had full authority to balance the guiding principle in paragraph E against that in paragraph B (3) and to find for conversion. Note that the same guiding principle which includes the general proscription against conversion was scrapped from the new rules on conversion, DAR A.O. 1, Series of 2002, or the Comprehensive Rules on Land Use Conversion. It must be emphasized that the policy allowing conversion, on the other hand, was retained. This is a complex case in which there can be no simplistic or mechanical solution. The Comprehensive Agrarian Reform Law is not intractable, nor does it condemn a piece of land to a single use forever. With the same conviction that the state promotes rural development,[32] it also recognizes the indispensable role of the private sector, encourages private enterprise, and provides incentives to needed investments.[33]
Respondents herein
muddle the issue in contending that a Sangguniang Bayan Resolution was not a
sufficient compliance with the requirement of the Local Government Code that an
ordinance must be enacted for a valid reclassification. Yet there was already a Conversion Order. To correct a situation in which lands redeemed from the MBC would
remain idle, petitioners took the route of applying for conversion. Conversion
and reclassification are separate procedures.[34] CCFI and ALI submitted the
two Resolutions to the DAR (one issued by the Sangguniang Bayan of Silang, the
other by the Sangguniang Panlalawigan of
Again, paragraph B (3),
Part VI of DAR AO 12-94, cited above, allows conversion when the land will have
greater economic value for residential, commercial or industrial purposes as certified by the Local Government
Unit. It is clear that the thrust of the community and the local
government is the conversion of the lands. To this end, the two Resolutions,
one issued by the Sangguniang Bayan of Silang, the other by the Sangguniang
Panlalawigan of
Paragraph E and paragraph B (3) were thus set merely as guidelines in issues of conversion. CARL is to be solely implemented by the DAR, taking into account current land use as governed by the needs and political will of the local government and its people. The palpable intent of the Administrative Order is to make the DAR the principal agency in deciding questions on conversion. A.O. 12-94 clearly states:
A.
The Department of Agrarian Reform is mandated to approve or disapprove
applications for conversion, restructuring, or readjustment of agricultural
lands into non-agricultural uses, pursuant to Section 4 (j) of Executive Order
No. 129-A, Series of 1987.
B. Section 5 (1) of E.O. No. 129-A, Series of 1987, vests in the DAR, exclusive authority to approve or disapprove applications for conversion of agricultural lands for residential, commercial, industrial, and other land uses.[35]
III.
The Conversion Order has long attained finality and
may no longer be questioned.
Respondents came
forward as claimants under CARL almost three years after the Conversion Order
was issued. In arguing that the claim of respondents had already prescribed,
petitioner ALI applied DAR A.O. 1, Series of 1999, which lays down a one-year
prescriptive period for petitions for cancellation or withdrawal. Section 34
thereof states:
Filing of Petition A petition for cancellation or withdrawal of the conversion order may be filed at the instance of DAR or any aggrieved party before the approving authority within ninety (90) days from discovery of facts which would warrant such cancellation but not more than one (1) year from issuance of the order: Provided, that where the ground refers to any of those enumerated in Sec. 35 (b), (e), and (f), the petition may be filed within ninety (90) days from discovery of such facts but not beyond the period for development stipulated in the order of conversion; Provided further, That where the ground is lack of jurisdiction, the petition shall be filed with the Secretary and the period prescribed herein shall not apply.
The
Conversion Order was issued by Secretary Garilao on
Respondents,
on the other hand, state that the applicable rule is A.O. 12 (promulgated in
1994), which was the rule subsisting at the time the Conversion Order was
issued. A.O. 12-94 imposes a prescriptive period of five (5) years; thus,
according to the farmers, the petition was filed well within the period.
Petitioner ALIs argument is well-taken. A.O.
01-99 entitled REVISED RULES AND REGULATIONS ON THE CONVERSION OF AGRICULTURAL
LANDS TO NON-AGRICULTURAL USES, provides for its own effectivity as follows:
SEC. 56. Effectivity This Order shall take effect ten (10) days after its publication in two (2) national newspapers of general circulation.
A.O.
01-99 was promulgated on
Respondent
farmers argue that, according to A.O. No. 01-99, the one-year prescriptive
period should be reckoned from the issuance of the Conversion Order. They point
out that it was impossible for them to receive notice of this rule when
Secretary Garilao issued the Conversion Order, since the rule was published
only one year and seven months after the issuance of the Order. Thus, it should
be A.O. 12-94, or the five-year prescription period, that should be applied to
them, and not the one-year period in A.O. 01-99.
Respondents
assume that the rule to be applied is that prevailing at the time of the
issuance of the Conversion Order. This is incorrect. The rule applicable in
determining the timeliness of a petition for cancellation or withdrawal of a
conversion order is the rule prevailing at the time of the filing of that
petition, and not at the time of the issuance of the Conversion Order. It is
axiomatic that laws have prospective effect, as the Administrative Code
provides.[36]
While A.O. 01-99 was not yet promulgated at the time of the issuance of the
Conversion Order, it was already published and in effect when the Petition for
Revocation was filed on
Regarding
the question on when the one-year prescription period should be reckoned, it
must be still be resolved in conformity with the prospective character of laws
and rules. In this case, the one-year period should be reckoned from the date
of effectivity of A.O. 1-99, which is
The Conversion Order is final and executory. The Court ruled in Villorente v. Aplaya Laiya Corporation:
Indubitably, the Conversion Order of the DAR was a final order, because it resolved the issue of whether the subject property may be converted to non-agricultural use. The finality of such Conversion Order is not dependent upon the subsequent determination, either by agreement of the parties or by the DAR, of the compensation due to the tenants/occupants of the property caused by its conversion to non-agricultural use. Once final and executory, the Conversion Order can no longer be questioned.[37]
A conversion order is a final judgment and cannot be repeatedly assailed by respondents in perpetuity, after they have received compensation and exhausted other means. In Villorente, the Court had occasion to rebuke the would-be beneficiaries who, after accepting the compensation stipulated in the conversion Order thereby impliedly acknowledging the validity of the order turned around and suddenly assailed it. The Court held:
We are convinced that the petition for review filed
by the petitioners with the CA was merely an afterthought
It must be stressed that the petitioners agreed to negotiate with the respondent for the disturbance compensation which they claimed was due them, conformably with the said Conversion Order. Hence, they cannot now assail the said order without running afoul to (sic) the doctrine of estoppel. The petitioners cannot approbate and disapprobate at the same time.[38]
It must be borne in mind that there can be no vested right to judicial relief, as ruled by the Court in United Paracale Mining v. Dela Rosa:
There can be no vested right in a judicial relief for this is a mere statutory privilege and not a property rightthe right to judicial relief is not a right which may constitute vested right because to be vested, a right must have become a title, legal or equitable, to the present or future enjoyment of property, or to the present or future enforcement of a demand or legal exemption from a demand made by another.[39]
IV.
The conversion and/or reclassification of the said
lands has become an operative fact.
Respondent farmers do
not deny that at the time of filing of the Petition for Revocation, the lands
in question were no longer agricultural. Secretary Morales affirmed this fact
in his Decision, even as he revoked Secretary Garilaos Order of conversion:
When respondent Capitol applied for conversion of the
subject land on
At the time of
the registration of the deed on
Clearly, the findings of the CLUPPI, the Sangguniang Bayan of Silang, and Secretary Morales himself confirm as an operative fact the reclassification and/or conversion of the lands. Both the DAR and the Sangguniang Bayan anchored their findings on the Certifications from the CLUPPI (obtained by the CLUPPIs executive committee as required by the DAR procedure), the National Irrigation Administration, the Philippine Coconut Authority, and the Department of Environment and Natural Resources.[40] The CLUPPI and the MARO (Municipal Agrarian Reform Office) conducted their own ocular inspection. The Sangguniang Bayan of Silang conducted plebiscites before issuing the Resolution for reclassification.[41]
In sum, the findings of the different
government agencies are as follows:
1. The
property is about ten (10) kilometers from the provincial road.
2. The
land sits on a mountainside overlooking Santa Rosa Technopark.
3. The
property is beyond eighteen (18) degrees in slope and undeveloped.
4. Based on a DAR Soil Investigation Report, the property is only marginally suitable for agriculture use due to its undulating topography.[42]
5. The
land is outside the irrigable area of the Cavite Friar Lands Irrigation
Systems.
6. DENR
Administrative Order No. 08 granted the application for an Environmental
Clearance while presenting these additional findings:
The area is unirrigated, and the main
source of water supply is rainfall.
The occupants have been paid disturbance
compensation.
The area in question had been granted a
Certificate of Eligibility for Conversion by the DAR on
The reclassification/conversion of the land has long been a foregone fact. While respondents insist that the process by which the land was reclassified was invalid, their claim is immaterial, because, as stated, the two procedures are distinct. Independently of the Sangguniang Bayans own initiative, the DAR issued a Certificate of Eligibility. These issuances only bolster the fact that, at the time it was converted, the land was no longer agricultural, and that it would generate more revenue if reclassified as a residential area. Resolution No. ML-08-S-96, adopted by the Sangguniang Bayan of Silang, recommended conversion based on the favorable findings of the Committee on Housing and Land Use. The Resolution states:[43]
...Whereas
based on the favorable findings by the Committee on Housing and Land Use after
careful study and after conducting several public hearings has favorably
recommended the approval of the request of Capitol Citifarms, Inc.;
Whereas, the land use reclassification of the said parcels of land will benefit the people of Silang by way of increased municipal revenue, generate employment, increased commercial activities and general (sic) uplift the socio-economic condition of the people particularly those in the vicinity of said parcels of land.
It is no longer
necessary to delve into the allegations of the lack of a valid ordinance or the
lack of a land use plan. Aside from the OP finding that this issue was raised
belatedly, the submission of new or revised town plans approved by the HLURB
is a requirement only in the process of reclassification embodied in the Local
Government Code. This is not a requirement in the process of conversion,
wherein the DAR is given the sole prerogative to make technical determinations
on changes in land use and to decide whether a particular parcel of
agricultural land, due to modernization and the needs of the community, has
indeed been converted to non-agricultural use.
V.
It has long been resolved by the Office of the
President that the lands in this case are exempted from CARL coverage, partly
in order to maintain the stability of the countrys banking system.
In the first OP
Decision dated
Upon
review of the entire records of the case, this Office is persuaded that a
stringent appreciation of the issues raised by the parties may not do justice
to their respective causes, and the public in general. What is involved is the
susceptibility of a bank to undergo rehabilitation which will be jeopardized by
the distribution of its assetsa careful balance between the interest of the
petitioner bank, its creditors (which includes the Bangko Sentral ng Pilipinas)
and the general public on the one hand, and adherence to the implementation of
the agrarian reform program on the other, must be established.
the ends of justice will be better subserved if the Statutory Receiver is given the fullest opportunity to monetize the assets of the bank which are supposed to be outside of the coverage of the CARL or may be converted into non-agricultural uses.[44]
Secretary Torres denied
the Motion for Reconsideration filed by the DAR. The denial was based precisely on the need to
balance the agrarian reform law with another policy consideration, the
stability of the banking system. He explained as follows:
The
guiding principle on land use conversion is to preserve prime agricultural
lands. On the other hand, when coinciding with the objectives of the
Comprehensive Agrarian Reform Law to promote social justice, industrialization
and the optimum use of lands as a national resource for public welfare, shall
be pursued in a speedy and judicious manner.
Finally,
we wish to reiterate the need to balance the interest between the petitioner
bank (under receivership by the BSP), its creditors (85% of which or a total of
P8, 771, 893, 000 is payable to BSP) and
the general public on one hand, and the faithful implementation of agrarian
reform program on the other hand, with the view to harmonizing them and
ensuring that the objectives of the CAR are met and satisfied.[45]
The Conversion Order was a product of policy determinations made by the DAR, the Office of the President, and even the Supreme Court. Secretary Torres had ordered the DAR to respect the temporary custody of those properties by the Statutory Receiver (BSP Deputy Governor Alberto Reyes) by deferring their coverage under the CARL This order stemmed in turn from the BSP Resolution of 22 May 1987 placing MBCs assets under custodia legis. Bolstered by the need to save MBC, which was one of BSPs crucial debtors, the Supreme Court allowed the BSP receiver to sell MBCs assets to a third party under the best terms and conditions, to give it ample opportunity to rehabilitate MBC. The disposition of MBCs properties was a judgment call made by the BSP, which, as the sole agency mandated to assist banks and financial institutions in distress, exercises asset management on a macro level. The Supreme Court Resolution called the arrangement the best solution for Manila Banking and CCFI.
In light of the
foregoing, it would be absurd to impute bad faith to ALI solely because it
chose to purchase the redeemed land. Similarly, ALI cannot be held accountable
for all the years that the land remained idle pending conversion. To deny
relief to ALI would be tantamount to placing the private sector in the unjust
situation of investing, upon invitation from the government, in a banks
distressed assets among which are lands the government itself has ordered
converted then subsequently confiscating the same from it.
Petitioners did not
renege on their duty to pay disturbance compensation to the tenant-farmers.
They expended substantial amounts in addition to the purchase price of the
foreclosed lands for litigation and administrative processing costs, the
farmers compensation, and improvements on the land. The development projects
were grounded on a reliance on national government actions that support the
thrust of
It was the OPs first
Decision, together with the Supreme Court Resolution, that ultimately paved the
way for ALI to acquire title to the subject lands as a third party buyer. When
the dispute over the subject land reached the OP for the second time when the
validity of the conversion order was in dispute the OP of course found no
merit in the allegation of concealment. There is therefore absolutely no basis
for the imputation of bad faith upon ALI simply on account of the alleged delay
in the registration of the sale from CCFI to it.
It must be emphasized
that the OPs ground for supporting conversion finds its moorings in DAR
Memorandum Circular 11-79 governing the conversion of private agricultural
lands into other uses. The Circular
states that conversion may be allowed when it is by reason of the changes in
the predominant land use, brought about by urban development. The OP Decision
pointed to the fact that the close proximity of
The
DAR found merit in the thrust of the local government to disperse urban growth
towards neighboring regions of Metro Manila; to encourage the movement of
residential development in the area; and to support the housing needs not just
of the neighboring Santa Rosa Technopark, but also of other commercial centers.
It is helpful to remember that it is the local government, in this case, that
of Silang,
The CA Decision
effectively enfeebles the Orders of no less than three Secretaries of the DAR
and the policy pronouncements of the OP. The actions of respondents accepting
disturbance compensation for the land, seeking petitioners compliance with the
terms of the Conversion Order, then reversing themselves by assailing the Order
itself long after the proper period had prescribed contradict this Courts
rule that conversion orders, once final and executory, may no longer be
questioned.
The only justification for the CA ruling that the lands had already been subjected to a Notice of Acquisition, hence no conversion thereof can take place cannot stand in the light of two points: 1) the record before this Court (including the CA and the DAR records) is bereft of any copy, certified or otherwise, of the alleged Notice of Acquisition; and 2) even if the land is subject to a Notice of Acquisition, this issue was never raised before the DAR or the OP, nor was it argued before the CA. It existed as a single-line statement in petitioners Appeal Memorandum.[46] Since the DAR and the OP had ruled for petitioners CCFI and ALI, and the CA itself admitted that petitioners stand would have been valid if not for the alleged Notice, the CA should have been more circumspect in verifying whether the evidence on record supported respondents self-serving claim.
Before the CAs unilateral action, this unsupported allegation was never raised as a live legal issue. Hence, CCFI and ALI were deprived of any opportunity to controvert the fact of the Notice of Acquisition and its legal effect, because they were never alerted that the existence of such Notice would in any way endanger their legal position. They had the right to expect that only issues properly raised before the administrative tribunals needed to be addressed. Even assuming that the Notice of Acquisition did exist, considering that CCFI and ALI had no chance to controvert the CA finding of its legal bar to conversion, this Court is unable to ascertain the details of the Notice of Acquisition at this belated stage, or rule on its legal effect on the Conversion Order duly issued by the DAR, without undermining the technical expertise of the DAR itself. To do so would run counter to another basic rule that courts will not resolve a controversy involving a question that is within the jurisdiction of the administrative tribunal prior to its resolution of that question.[47]
CARL cannot be used to
stultify modernization. It is not the role of the Supreme Court to apply the
missing notice of acquisition in perpetuity. This is not a case wherein a
feudal landowner is unjustly enriched by the plantings of a long-suffering
tenant. ALI is in the precarious position of having been that third-party buyer
who offered the terms and conditions most helpful to CCFI, MBC, and
effectively, the BSP, considering the 85% portion of the total debt of MBC that
BSP owns. What this Court can do positively is to contribute to policy
stability by binding the government to its clear policy decisions borne over a
long period of time.
WHEREFORE,
premises considered, the Court of Appeals committed reversible error in
nullifying the policy pronouncement of the Office of the President and the
Department of Agrarian Reform. The instant petition for certiorari is hereby GRANTED, and the Order of the Office of
the President dated
SO
ORDERED.
MARIA
Associate Justice
WE CONCUR:
CONCHITA
CARPIO MORALES
Associate Justice
Chairperson
ARTURO
D. BRION LUCAS
P. BERSAMIN
Associate Justice Associate Justice
MARTIN
S. VILLARAMA, JR.
Associate Justice
ATTESTATION
I
attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the Opinion of the
Courts Division.
CONCHITA CARPIO MORALES
Associate Justice
Chairperson, Third Division
CERTIFICATION
Pursuant to Section 13,
Article VIII of the Constitution, and the Division Chairpersons Attestation, I
certify that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Courts Division.
RENATO C. CORONA
Chief Justice
[1] SC rollo at 58-66. Penned by Associate Justice Mario L. Guaria III and concurred in by Associate Justices Portia Alio-Hormachuelos and Japar B. Dimaampao.
[2]
[3]OP Decision in OP Case No. 6231, at 1, DAR records; Folder 3 of 3, at 1481.
[4]SC rollo at 316.
[5] On
[6] Dated
[7] Supra note 3, at 3.
[8] OP Decision promulgated
[9] OP Decision promulgated
[10] Excerpts from the Minutes of the
regular session of the Sangguniang Bayan
of Silang, held on
[11] DAR records, Folder 3 of 3, Exhibit 12, at 1546.
[12] DAR records, Folder 3 of 3, at 1547-1945.
[13] Petition, CA rollo at 528-532.
[14] Morales Order, SC rollo at 336-352.
[15] Braganza Order, CA rollo at 84-95.
[16]
[17] Motion for Reconsideration, Annex 2, at 2.
[18]
[19]
[20] Respondent farmers Appeal Memorandum to the OP, SC rollo at 317.
[21]
[22] OP Decision, SC rollo at 202.
[23]
[24] CA Decision, SC rollo at 65.
[25] SC rollo at 211.
[26] Supra note 24, at 206.
[27]
[28] Atlas Consolidated Mining and
Development Corp. v. Commissioner of Internal Revenue, G.R. No. L-26911,
[29] Quiambao v. Court of Appeals,
G.R. No. 128305,
[30] Sebastian v. Morales, 445 Phil. 595, 609 (2003).
[31] Supra note 24.
[32] CONSTITUTION, Sec. 21, Art. II on State Policies.
[33] CONSTITUTION, Sec. 20, Art. II on State Policies.
[34] Alarcon v. Court of Appeals, G.R. No. 152085,
[35]DAR A.O. 12, S. of 1994, Part II, Legal Mandate, pars. A and B.
[36] EO 292, Book 1, Chapter 5, Sec. 18.
[37] G.R. No. 145013,
[38]
[39] United Paracale Mining Company v. Joselito Dela Rosa, G.R. No.
63786-7,
[40] DAR records, Folder 3 of 3, at 516-528.
[41] DAR records, Folder 1 of 3, at 16-18.
[42] CA rollo at 38-40.
[43] Supra note 12.
[44] OP Decision,
[45] OP Decision,
[46] CA rollo at 42.
[47] The Supreme Court discusses the Doctrine of Primary Jurisdiction in Smart Communications, Inc. v. National Telecommunications Commission, G.R. No. 151908, 12 August 2003,408 SCRA 678.