Tag: Tourism Zone

Protecting Farmers’ Rights: DAR’s Authority and CARP Coverage in Hacienda Looc

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

September 18, 2019

Agrarian Reform vs. Tourism: Balancing Land Use Under Philippine Law

The Supreme Court affirmed the Department of Agrarian Reform’s authority to implement agrarian reform, even in areas designated for tourism. It ruled that classifying land as a tourist zone doesn’t automatically exclude it from agrarian reform coverage, emphasizing that the actual use and development of the land determine its eligibility. This decision underscores the importance of balancing the state’s interest in promoting tourism with its commitment to social justice through agrarian reform.

Hacienda Looc: Can Tourist Zones and Agrarian Reform Coexist?

This case revolves around Hacienda Looc, a large property in Nasugbu, Batangas, which was partly awarded to farmer-beneficiaries under the Comprehensive Agrarian Reform Program (CARP). Fil-Estate Properties, Inc. (Fil-Estate) sought to exclude portions of this land from CARP coverage, arguing that Nasugbu had been declared a tourist zone, thus exempting it from agrarian reform. The legal question at the heart of the dispute is whether a general proclamation designating an area as a tourist zone automatically overrides the rights of farmers to agrarian reform benefits. The Supreme Court consolidated three petitions to resolve this issue, ultimately siding with the farmer-beneficiaries.

The dispute began when the Development Bank of the Philippines (DBP) acquired Hacienda Looc and later transferred it to the government. The Asset Privatization Trust (APT) offered to sell portions of the land to the Department of Agrarian Reform (DAR) for distribution under CARP. Certificates of Land Ownership Award (CLOAs) were issued to farmer-beneficiaries. However, Manila Southcoast Development Corporation (Manila Southcoast) subsequently purchased Hacienda Looc and sought the cancellation of these CLOAs. This led to a series of legal battles involving the DAR, the Department of Agrarian Reform Adjudication Board (DARAB), the Office of the President, and the Court of Appeals.

Fil-Estate entered the picture through a joint venture agreement with Manila Southcoast, aiming to develop the land for tourism. Fil-Estate then petitioned for the exclusion of certain lots from CARP coverage, claiming they had slopes exceeding 18%. Agrarian Reform Secretary Garilao, however, declared 70 hectares of the land as covered under CARP. This decision was challenged, leading to the consolidated cases before the Supreme Court.

A key argument presented by Fil-Estate was based on Proclamation No. 1520, which declared Nasugbu as a tourist zone. Fil-Estate contended that this proclamation effectively reclassified the land, making it non-agricultural and therefore exempt from CARP. The Supreme Court, however, rejected this argument, citing the landmark case of Roxas & Company, Inc. v. DAMBA-NSFW. In that case, the Court clarified that a general proclamation identifying an area as a tourist zone does not automatically convert all lands within that zone to non-agricultural use.

Instead, the Court emphasized the need for specific identification and segregation of areas with potential tourism value. The ponencia reiterated this principle, stating:

The perambulatory clauses of PP 1520 identified only “certain areas in the sector compromising the [three Municipalities that] have potential tourism value” and mandated the conduct of “necessary studies” and the segregation of “specific geographic areas” to achieve its purpose. Which is why the PP directed the Philippine Tourism Authority (PTA) to identify what those potential tourism areas are. If all the lands in those tourism zones were to be wholly converted to non-agricultural use, there would have been no need for the PP to direct the PTA to identify what those “specific geographic areas” are.

This interpretation aligns with the intent of agrarian reform laws, which aim to distribute agricultural land to landless farmers. The Supreme Court, therefore, affirmed the DAR’s authority to determine whether specific parcels of land within a proclaimed tourist zone should be covered by CARP.

The Court also addressed the procedural aspects of the case. Fil-Estate argued that the proper remedy to challenge the Agrarian Reform Secretary’s rulings was a petition for review under Rule 43 of the Rules of Court, not an appeal to the Office of the President. The Supreme Court clarified that under existing rules, an appeal to the Office of the President was a valid step before seeking judicial review. This ruling underscores the importance of exhausting administrative remedies before resorting to court action.

Another procedural issue raised was the allegation of forum shopping against the farmer-beneficiaries. Fil-Estate claimed that the farmer-beneficiaries filed multiple pleadings raising the same issues in different forums. The Supreme Court found no merit in this claim, noting that the actions taken by the farmer-beneficiaries did not constitute willful and deliberate forum shopping. The Court also affirmed the Agrarian Reform Secretary’s authority to look into the validity of CLOA cancellations, even though the main issue was the exclusion of land from CARP coverage. This power is grounded in Section 50 of Republic Act No. 6657, which grants the DAR broad authority to resolve agrarian reform matters.

Building on this principle, the Court highlighted that the DAR, through its Secretary, has primary jurisdiction to investigate acts aimed at circumventing the objectives of CARP. It emphasized that agrarian reform is a social welfare legislation, and doubts should be resolved in favor of the tenant or worker.

The court also validated a partial compromise agreement between Fil-Estate and some of the farmer-beneficiaries concerning Lots 780-12 and 780-13. Despite an initial issue with lack of Special Powers of Attorney, the parties’ later compliance solidified the enforceability of the partial agreement. The Court noted that since more than ten years had lapsed from the issuance of the CLOAs, the claimants were no longer prohibited from renouncing their rights over those lots. This part of the ruling demonstrates the potential for negotiated settlements in agrarian disputes, provided they comply with legal requirements and agrarian reform objectives.

In addressing the final issue regarding the validity of the cancellation of Certificates of Land Ownership Award, the Court maintained that procedural lapses and the community of interest principle would not favor parties that did not avail of the appropriate remedies to challenge the orders. Del Mundo, et al. were unable to invoke communality of interest because their rights and interests were not intertwined with those who filed appeals.

FAQs

What was the key issue in this case?	The key issue was whether classifying land as a tourist zone automatically excludes it from agrarian reform coverage, overriding the rights of farmer-beneficiaries.
Did the Supreme Court rule in favor of the landowners or the farmer-beneficiaries?	The Supreme Court sided with the farmer-beneficiaries, affirming the Department of Agrarian Reform’s authority to implement agrarian reform even in areas designated for tourism.
What is the significance of Proclamation No. 1520 in this case?	Proclamation No. 1520 declared Nasugbu, Batangas, as a tourist zone. The landowners argued this exempted the land from agrarian reform, but the Court clarified that the proclamation alone did not automatically reclassify the land.
What did the Court say about the role of the Department of Agrarian Reform?	The Court emphasized that the DAR has primary jurisdiction over agrarian reform matters and the power to determine whether specific parcels of land should be covered by the Comprehensive Agrarian Reform Program (CARP).
What is the “community of interest” principle mentioned in the decision?	The “community of interest” principle typically applies to an original action where parties have interwoven interests, and a reversal would affect all of them. In this case, it did not apply to Del Mundo, et al because their lack of appeal means their interests were not legally intertwined.
What is Section 50 of Republic Act No. 6657, and why is it relevant?	Section 50 grants the DAR broad authority to resolve agrarian reform matters, including investigating acts aimed at circumventing CARP. This allows the DAR to look into irregularities, even if not directly related to the main issue.
What should parties do if they disagree with a decision of the Department of Agrarian Reform?	Parties should first exhaust all administrative remedies, such as appealing to the Office of the President, before seeking judicial review in the courts.
What is the key takeaway from this case for landowners and farmer-beneficiaries?	The key takeaway is that classifying land as a tourist zone does not automatically exempt it from agrarian reform. Actual land use, development, and the intent of agrarian reform laws are crucial factors.

This ruling reinforces the state’s commitment to agrarian reform while acknowledging the importance of tourism. It underscores the need for a balanced approach that considers both economic development and social justice. The Supreme Court’s decision provides clarity on the interplay between tourism proclamations and agrarian reform laws, ensuring that the rights of farmer-beneficiaries are protected while allowing for sustainable development.

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

September 18, 2019

Agrarian Reform vs. Tourism: Resolving Land Use Conflicts in the Philippines

In a complex legal battle, the Philippine Supreme Court clarified the application of agrarian reform laws in areas designated for tourism. The Court addressed whether a Presidential Proclamation declaring certain municipalities as tourist zones automatically exempts agricultural lands within those zones from comprehensive agrarian reform program (CARP) coverage. The decision underscores the importance of specific government action in reclassifying land use and balances the state’s interest in agrarian reform with the promotion of tourism and the rights of landowners and landless farmers.

When Tourist Ambitions Clash with Farmers’ Rights: A Philippine Hacienda Story

The case of Roxas & Company, Inc. v. DAMBA-NFSW revolves around Roxas & Company’s application to convert its three haciendas in Nasugbu, Batangas, from agricultural to non-agricultural use, based on Presidential Proclamation (PP) 1520 which declared Nasugbu a tourism zone in 1975. This proclamation sparked a protracted legal dispute, raising critical questions about land use classification and the rights of agrarian reform beneficiaries. The central legal question is whether PP 1520 automatically reclassified all lands in the affected municipalities to non-agricultural use, thereby exempting them from CARP coverage, or whether further action was required to effect such a change.

The Supreme Court ultimately ruled that PP 1520 did not automatically convert agricultural lands in Nasugbu to non-agricultural lands. The Court emphasized the need for specific identification and segregation of geographic areas for tourism development by the Philippine Tourism Authority (PTA). To bolster its ruling, the Court referenced the “whereas clauses” of PP 1520, noting that they identified only “certain areas” as having potential tourism value and mandated “necessary studies” and the segregation of “specific geographic areas” to achieve its purpose. This implies that a blanket reclassification was not intended.

The decision cites DAR v. Franco, where the Court stated that the DAR Regional Office VII, “in coordination with the Philippine Tourism Authority, has to determine precisely which areas are for tourism development and excluded from the Operation Land Transfer and the Comprehensive Agrarian Reform Program.” In the same vein, Roxas & Co. relied on Natalia Realty v. DAR and NHA v. Allarde to assert that its lands were already effectively reclassified. This argument was rejected because unlike the cases cited, which involved specific townsite reservations for housing, there was no survey and technical delineation of tourism areas for Roxas & Co. It also bears emphasis that a mere reclassification of an agricultural land does not automatically allow a landowner to change its use since there is still that process of conversion before one is permitted to use it for other purposes.

Moreover, the Court considered subsequent issuances, including Executive Order No. 647 (2007) proclaiming areas in the Nasugbu Tourism Development Plan as Special Tourism Zones and the Tourism Act of 2009, which explicitly declares that lands identified as part of a tourism zone shall qualify for exemption from CARP coverage. The DAR’s Memorandum Circular No. 7, Series of 2004, offered clarificatory guidelines to the effect that proclamations recognizing the potential tourism value of certain areas do not automatically reclassify the entirety of the land area. Therefore, Roxas & Co. can only look to the provisions of the Tourism Act, and not to PP 1520, for possible exemption.

The Court also addressed the validity of Certificates of Land Ownership Award (CLOAs) issued by the DAR. It found that the grant of CARP exemption in DAR Administrative Case No. A-9999-008-98 over nine parcels of land identified as Lot Nos. 20, 13, 37, 19-B, 45, 47, 49, 48-1 and 48-2 which are portions of TCT No. 985 covering 45.9771 hectares in Hacienda Palico, subject of G.R. No. 167505 was in order, while DAR Administrative Case No. A-9999-142-97 could not be granted in view of discrepancies in the location and identity of the subject parcels of land. It follows that the CLOAs issued to the farmer-beneficiaries in DAR Administrative Case No. A-9999-008-98 must be cancelled.

The Court reiterated that the power to determine whether properties are non-agricultural and exempt from CARP lies with the DAR, not with the courts. It also stressed that disturbance compensation must be given to tenants of parcels of land found suited for non-agricultural uses. Roxas & Co. is mandated to first satisfy the disturbance compensation of affected farmer-beneficiaries in the areas covered by the nine parcels of lands in DAR AO No. A-9999-008-98 before the CLOAs covering them can be cancelled and is enjoined to strictly follow the instructions of R.A. No. 3844.

FAQs

What was the central issue in this case?	The main issue was whether Presidential Proclamation 1520 automatically reclassified agricultural lands in Nasugbu, Batangas, to non-agricultural lands, exempting them from CARP coverage.
Did the Supreme Court rule in favor of Roxas & Co.’s application for conversion?	The Supreme Court ruled that PP 1520 did not automatically reclassify all lands and affirmed the need for Roxas & Co. to comply with agrarian reform requirements for certain parcels. However, other parcels that the local zoning declared residential were excluded from CARP.
What is the role of the Philippine Tourism Authority (PTA) in this case?	The PTA is tasked with identifying and delineating specific geographic areas within the tourism zone for concentrated development efforts. This identification is crucial for determining which lands are effectively reclassified.
What is disturbance compensation, and who is entitled to it?	Disturbance compensation is a payment made to tenants or agricultural lessees who are dispossessed of their land due to its reclassification for non-agricultural purposes. According to existing laws, the landowners are mandated to pay the disturbance fee before claiming the property.
What is the significance of DAR Administrative Order No. 6, Series of 1994?	This administrative order provides guidelines for issuing exemption clearances based on DOJ Opinion No. 44, stating that lands classified as commercial, industrial, or residential before CARP’s effectivity no longer need conversion clearance.
How did the Nasugbu Municipal Zoning Ordinance No. 4 factor into the Supreme Court’s decision?	The Court acknowledged a local government’s power to classify land prior to CARP. It was found however, that there were discrepancies on whether the parcels of land involved are actually within the said zoning ordinance and inconsistencies were noted in certifications submitted by Roxas & Co. in support of its application.
What is the impact of the Tourism Act of 2009 on this case?	The Tourism Act of 2009 explicitly declares that lands identified as part of a tourism zone qualify for exemption from CARP, impacting how future exemptions may be processed.
Was Roxas & Co. accused of forum shopping, and what did the Court say about that?	DAMBA-NFSW accused Roxas & Co. of forum shopping, but the Court ultimately disagreed, citing substantial differences in the cases. Roxas & Co. was found not guilty of forum shopping, especially due to the fact that there were clear-cut rules with which to take administrative actions.
What happened to CLOA No. 6654 in this case?	In this case, the Court affirmed the partial and complete cancellation of CLOA No. 6654. Lots 21 No. 24, No. 26, No. 31, No. 32 and No. 34 or those covered by DAR Administrative Case No. A-9999-142-97) remain however; and CLOAs for Lot Nos. 20, 13, 37, 19-B, 45, 47, 49, 48-1 and 48-2 which are portions of TCT No. 985 covering 45.9771 hectares in Hacienda Palico, are nullified.

The Supreme Court’s decision in Roxas & Company, Inc. v. DAMBA-NFSW offers valuable insights into the intersection of agrarian reform and tourism development in the Philippines. It highlights the importance of specific legal and administrative actions in classifying land use and clarifies the rights and obligations of landowners and agrarian reform beneficiaries in areas with tourism potential. This will significantly affect cases involving land classification and will be useful for both public and private entities alike in coming up with decisions.

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: Roxas & Company, Inc. v. DAMBA-NFSW, G.R. No. 149548, December 04, 2009

December 4, 2009

Tourism vs. Agrarian Reform: Resolving Land Use Conflicts in the Philippines

The Supreme Court held that a separate opinion or handwritten note from a member of the Department of Agrarian Reform Adjudication Board (DARAB) does not form part of the official decision and cannot be subject to appeal. This ruling emphasizes the importance of adhering to procedural rules in agrarian disputes, clarifying that only the dispositive portion of a DARAB decision is binding and appealable. It also underscores the principle that new issues cannot be raised for the first time on appeal, ensuring fairness and due process in legal proceedings.

Clash of Interests: Can Tourism Zones Override Agrarian Reform?

This case revolves around a land dispute in Cebu City, where Paulino Franco owned a parcel of land. The Department of Agrarian Reform (DAR) sought to place this land under the Comprehensive Agrarian Reform Program (CARP), potentially redistributing it to tenant farmers. Franco objected, arguing that Presidential Proclamation No. 2052, issued in 1981, had already declared the area as a tourist zone, thus exempting it from agrarian reform. The core legal question is whether a prior declaration of land as a tourist zone automatically overrides the subsequent implementation of agrarian reform laws. The case highlights the conflict between promoting tourism and protecting the rights of tenant farmers.

The legal battle began when Municipal Agrarian Reform Officer Patrocinia G. Mercado (MARO Mercado) notified Franco of a conference to discuss placing his land under the agricultural leasehold system. Franco’s non-attendance and objection led MARO Mercado to prepare documentation for Provisional Lease Rentals in favor of several individuals, claiming they were bona fide tenants. Franco challenged these orders before the DARAB, asserting that Proclamation No. 2052 and Letter of Instruction No. 1256 (LOI No. 1256) had classified the land as non-agricultural. He also argued that the alleged tenants had not shared any produce with him, meaning the land could not be placed under the leasehold system.

The Agrarian Reform Adjudicator sided with Franco, declaring the orders null and void, citing the prior classification of the land as a tourist zone. This decision was initially affirmed by the DARAB, which emphasized that Franco’s land was not agricultural land at the time the orders were issued. However, a handwritten note by DARAB member Lorenzo R. Reyes complicated the matter. Reyes stated that Franco would still have to apply for conversion, and if granted, the appellants would be entitled to disturbance compensation. Franco then filed a Motion for Reconsideration on the issue of disturbance compensation, which was denied.

Franco then appealed to the Court of Appeals, but the private petitioners (the alleged tenants) did not. The Court of Appeals affirmed the DARAB decision but modified it by deleting the disturbance compensation, stating that the private petitioners failed to prove they were tenants or bona fide occupants of the land. The case reached the Supreme Court because the issues stemmed from the handwritten note and not the core decision of the DARAB.

The Supreme Court emphasized the distinction between a judgment and an opinion, quoting the case of Republic of the Philippines v. Nolasco:

“A judgment must be distinguished from an opinion. The latter is the informal expression of the views of the court and cannot prevail against its final order or decision. While the two may be combined in one instrument, the opinion forms no part of the judgment.”

The Court stressed that the handwritten note was merely a personal view of a DARAB member and not part of the DARAB decision. It also reiterated the principle that courts cannot decide questions not properly raised as an issue. In this case, the entitlement to disturbance compensation was premature since the original issue was the nullity of the Provisional Lease Rental Orders. The determination of legitimate tenants entitled to disturbance compensation is best left to the DAR.

The Supreme Court also highlighted an important order issued by then DAR Secretary Garilao, which set aside his previous order and clarified the extent of the land covered by Proclamation No. 2052:

“In other words, the specific intent of Proclamation No. 2052 is the identification of the areas for tourism with the implication that the other areas within the proclamation but no longer necessary for tourism development as determined by the PTA, in this case, could be transferred for agrarian reform purposes to the DAR.”

This order directed the DAR Regional Office VII, in coordination with the Philippine Tourism Authority, to determine precisely which areas were for tourism development and excluded from Operation Land Transfer and the Comprehensive Agrarian Reform Program. The Court also reiterated that lands already classified as non-agricultural before the enactment of RA 6657 on June 15, 1988, do not need any conversion clearance.

The petitioners raised new issues on appeal regarding the coverage of Proclamation No. 2052 and the non-tenancy findings. The Supreme Court pointed out that the petitioners never appealed the DARAB decision to the Court of Appeals. The Court cited Sta. Rosa Realty Development Corporation v. Amante, where it held that the appellate court did not have jurisdiction to consider evidence outside those submitted before the DARAB.

The Supreme Court referenced Salafranca v. Philamlife (Pamplona) Village Homeowners Association, Inc., emphasizing that matters not brought out in the proceedings below will ordinarily not be considered by a reviewing court. Therefore, the Supreme Court did not address the new issues raised by the petitioners, stating they should have been raised during the DARAB proceedings.

In summary, the Supreme Court set aside the Court of Appeals’ decision and reinstated the DARAB’s decision, affirming the Adjudicator’s ruling. This case clarifies the procedural aspects of appealing DARAB decisions and reinforces the importance of raising issues at the appropriate stage of the proceedings. The case also reiterated that lands classified as non-agricultural prior to RA 6657 do not require conversion clearance, while also stressing the need for coordination between the DAR and the Philippine Tourism Authority to determine the specific areas covered by tourism development.

FAQs

What was the central issue in this case?	The central issue was whether a handwritten note by a DARAB member could be the subject of an appeal and whether the Court of Appeals erred in ruling on issues beyond the DARAB’s decision.
Did the Supreme Court address whether Franco’s land should be covered by agrarian reform?	The Supreme Court did not directly address this issue. Instead, it focused on the procedural errors in the appeal process and the impropriety of considering the DARAB member’s handwritten note.
What is the significance of Proclamation No. 2052 in this case?	Proclamation No. 2052 declared certain areas in Cebu as tourist zones, which Franco argued exempted his land from agrarian reform. However, its implementation required coordination between the DAR and the Philippine Tourism Authority.
What is the difference between a judgment and an opinion, according to the Supreme Court?	The Supreme Court stated that a judgment is the final order of the court, while an opinion is an informal expression of the court’s views that does not form part of the judgment. Only the judgment is binding.
Can new issues be raised for the first time on appeal?	No, the Supreme Court emphasized that matters, theories, or arguments not brought out in the proceedings below will not be considered by a reviewing court. Parties cannot change their theory of the case on appeal.
What was the effect of DAR Secretary Garilao’s order on this case?	DAR Secretary Garilao’s order clarified that only specific areas identified for tourism development would be excluded from agrarian reform, requiring coordination between the DAR and the Philippine Tourism Authority.
What is disturbance compensation, and who is entitled to it?	Disturbance compensation is a payment made to tenants or farmworkers who are displaced due to land conversion or other changes in land use. The DAR determines who is eligible for this compensation.
What did the Court say regarding conversion clearance?	The Court reiterated that lands classified as non-agricultural before June 15, 1988, the enactment date of RA 6657, do not need any conversion clearance.

This case serves as a reminder of the importance of following proper legal procedures in agrarian disputes. The Supreme Court’s decision reinforces the principle that only the official judgment of the DARAB is binding, and new issues cannot be raised for the first time on appeal. The ruling also highlights the complexities of balancing tourism development with agrarian reform, requiring careful coordination between government agencies.

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: DEPARTMENT OF AGRARIAN REFORM VS. PAULINO FRANCO, G.R. NO. 147479, September 26, 2005

September 26, 2005