The Supreme Court affirmed the Department of Agrarian Reform’s (DAR) authority to determine and adjudicate agrarian reform matters, emphasizing its exclusive original jurisdiction over the Comprehensive Agrarian Reform Law (CARL) implementation. The Court highlighted DAR’s power to investigate acts aimed at circumventing CARL’s objectives, lending significant weight to its findings when supported by substantial evidence. This ruling underscores the government’s commitment to agrarian reform and the protection of farmers’ rights against attempts to evade land redistribution.

Hacienda Looc’s Land Dispute: Tourism vs. Farmers’ Rights

The consolidated petitions before the Supreme Court revolved around Hacienda Looc, a vast property in Nasugbu, Batangas, previously awarded to farmer-beneficiaries through Certificates of Land Ownership Award (CLOAs). These CLOAs were later canceled on the premise that the lands were excluded from the Comprehensive Agrarian Reform Program (CARP). The central legal question was whether portions of Hacienda Looc should remain under CARP coverage, prioritizing farmers’ rights, or be excluded to facilitate tourism development, as argued by Fil-Estate Properties, Inc.

The dispute began when Asset Privatization Trust (APT) offered portions of Hacienda Looc to the Department of Agrarian Reform (DAR) under the Voluntary Offer to Sell scheme. From 1991 to 1993, DAR distributed 25 Certificates of Land Ownership Award (CLOA) covering 3,981.2806 hectares of land. Later, Asset Privatization Trust sold its rights and interests in Hacienda Looc to Manila Southcoast Development Corporation (Manila Southcoast), which then entered into a joint venture agreement with Fil-Estate Properties, Inc. (Fil-Estate) to develop the land. This prompted Fil-Estate to file a petition seeking the exclusion of these lots from CARP coverage, arguing that the lands had slopes of more than 18%.

The farmer-beneficiaries contested the cancellation proceedings, alleging they were denied due process and that some waivers were falsified. This led to Agrarian Reform Secretary Garilao instructing Undersecretary Soliman to conduct a fact-finding investigation, which revealed irregularities. Based on these findings, Secretary Garilao declared 70 hectares of the land as covered under CARP. This decision was challenged by Fil-Estate, leading to multiple appeals and court decisions. The Supreme Court ultimately consolidated these cases to resolve the conflicting claims.

Fil-Estate argued that Nasugbu, Batangas, was classified as a tourism zone, thus exempting the land from CARP. They cited Proclamation No. 1520, issued by President Ferdinand Marcos, which declared Nasugbu a tourist zone under the Philippine Tourism Authority’s control. According to Fil-Estate, this classification superseded CARP regulations, regardless of the land’s slope or agricultural development. They further argued that Agrarian Reform Secretary Garilao exceeded his scope of review by looking at the validity of the cancellation of the 25 Certificates of Land Ownership Award (CLOA).

Reyes, et al. countered that an appeal before the Office of the President was the proper remedy against Agrarian Reform Secretary Garilao’s Orders. They relied on experts who characterized the lands as agricultural and questioned the accuracy of the findings that some areas had slopes of at least 18%. Additionally, they contended that Proclamation No. 1520 had been repealed by Executive Order Nos. 448 and 506, which mandated the transfer of suitable agricultural lands, reserved for specific purposes but no longer used, to DAR for distribution under CARP.

The Supreme Court addressed several procedural and substantive issues. It upheld the validity of a compromise agreement between some parties, excluding certain lots from litigation, but emphasized that such agreements must adhere to agrarian reform laws. The Court affirmed that appealing to the Office of the President was the correct procedure, aligning with existing regulations at the time. It found no evidence of willful forum shopping by Reyes, et al., clarifying that the rule against forum shopping applies to initiatory pleadings, not comments or petitions to reopen cases.

Regarding the scope of Agrarian Reform Secretary Garilao’s review, the Court emphasized the broad powers granted to DAR under Section 50 of Republic Act No. 6657. This section allows DAR to investigate acts aimed at circumventing the objectives of CARP and to correct errors that would defeat the substantive rights of farmer-beneficiaries. The Court stated that Agrarian Reform Secretary Garilao did not exceed his jurisdiction in considering all controversies surrounding Hacienda Looc, especially given the allegations of fraudulent cancellations of CLOAs.

Delving into the substantive issue of CARP coverage, the Court considered whether the classification of Nasugbu as a tourism zone automatically excluded the land. Citing Roxas & Company, Inc. v. DAMBA-NSFW, the Court clarified that Proclamation No. 1520 merely identified areas with potential tourism value and did not automatically reclassify agricultural lands. This proclamation directed the Philippine Tourism Authority to identify specific geographic areas for tourism development, implying that not all lands within the zone were intended for non-agricultural use.

The Court emphasized that the power to determine whether land should be included in CARP coverage lies with the Department of Agrarian Reform, an administrative body with special competence in agrarian matters. Furthermore, Section 10 of Republic Act No. 6657 excludes lands with slopes of 18% and over, except those already developed. However, the Court upheld the factual findings of Agrarian Reform Secretary Garilao regarding the slope and development of the lots, deferring to the expertise of the administrative agency.

Regarding Associate Justice Gonzales-Sison’s non-inhibition, the Court found no compelling reason for disqualification. Allegations of bias and partiality were insufficient without concrete evidence of acts or conduct demonstrating prejudice. The Court reiterated that mere suspicion of bias does not warrant inhibition, as judges are presumed to dispense justice impartially.

Finally, the Court rejected Del Mundo, et al.’s reliance on the community of interest principle to excuse their failure to appeal. The Court clarified that the community of interest principle applies when a reversal of judgment on appeal benefits all parties with interwoven rights, even those who did not appeal. However, this principle cannot be invoked to revive a lost right to appeal. Thus, the Supreme Court denied all petitions, affirming the lower courts’ decisions.

FAQs

What was the key issue in this case?	The key issue was whether certain portions of Hacienda Looc should remain under the Comprehensive Agrarian Reform Program (CARP) or be excluded to allow for tourism development. This involved determining the extent of the Department of Agrarian Reform’s (DAR) authority and the validity of land classifications.
What did the Supreme Court decide?	The Supreme Court upheld the DAR’s authority to adjudicate agrarian reform matters and affirmed the decisions of the lower courts. The court supported the DAR’s findings that certain areas of Hacienda Looc were covered under CARP, prioritizing farmers’ rights over Fil-Estate’s tourism development plans.
What is the significance of Proclamation No. 1520 in this case?	Proclamation No. 1520 declared Nasugbu, Batangas, as a tourist zone. However, the Supreme Court clarified that this proclamation did not automatically reclassify all agricultural lands to non-agricultural use. It merely identified areas with potential tourism value, requiring further delineation by the Philippine Tourism Authority.
What is the ‘community of interest’ principle, and how did it apply (or not apply) here?	The ‘community of interest’ principle suggests that a reversal of judgment on appeal should benefit all parties with interwoven rights, even those who did not appeal. In this case, the Supreme Court ruled that this principle could not be used to revive the right to appeal for parties who failed to file a timely appeal.
What powers does the Department of Agrarian Reform (DAR) have?	The DAR has primary jurisdiction to determine and adjudicate agrarian reform matters, including the implementation of CARP. It has the power to investigate acts aimed at circumventing CARP’s objectives, summon witnesses, and correct errors that would defeat the rights of farmer-beneficiaries.
What is the 18% slope rule under CARP?	Section 10 of Republic Act No. 6657 excludes lands with slopes of 18% and over from CARP coverage, except for those that are already developed. This provision aims to balance agricultural land distribution with ecological considerations.
What must a judge do if they are perceived to be biased?	A judge may voluntarily inhibit themselves from a case if they feel they cannot be impartial. However, mere allegations of bias are insufficient; there must be concrete evidence of acts or conduct demonstrating prejudice to warrant inhibition.
What is the effect of a compromise agreement in agrarian disputes?	A compromise agreement can settle agrarian disputes, but it must comply with agrarian reform laws. It is binding only on the parties who entered into it, and their heirs and assigns. The absence of a special power of attorney renders the compromise void.

This case reinforces the Department of Agrarian Reform’s crucial role in safeguarding the rights of farmer-beneficiaries. By clarifying the scope of tourism zone classifications and affirming the DAR’s investigative powers, the Supreme Court has set a precedent that prioritizes agrarian reform and equitable land distribution.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: FIL-ESTATE PROPERTIES, INC. vs. PAULINO REYES, ET AL., G.R. No. 152797, September 18, 2019