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G.R. No. 149553 - NICOLAS LAYNESA AND SANTOS LAYNESA v. PAQUITO AND PACITA UY

G.R. No. 149553 - NICOLAS LAYNESA AND SANTOS LAYNESA v. PAQUITO AND PACITA UY

PHILIPPINE SUPREME COURT DECISIONS

SECOND DIVISION

[G.R. NO. 149553 : February 29, 2008]

NICOLAS LAYNESA and SANTOS LAYNESA, Petitioners, v. PAQUITO and PACITA UY, Respondents.

D E C I S I O N

VELASCO, JR., J.:

In 1938, Robert Morley was the owner of a four (4)-hectare parcel of land in Barrio Tagbong, Pili, Camarines Sur. Petitioner Santos Laynesa was his tenant over two and a half (2 ') hectares of the land. In 1947, Morley sold the 4 has. to Sixto Cuba, Sr. He maintained Santos as the tenant over the 2 '-hectare portion while instituting petitioner Nicolas Laynesa, son of Santos, as his tenant over the remainder of the property. On May 20, 1974, Original Certificate of Title No. 1660 on the property was issued to Cuba, Sr.1

On October 25, 1979, Cuba, Sr. died intestate, survived by his children, Sixto Cuba, Jr., Carmelita Cuba Sunga, and Bienvenido Cuba. Santos and Nicolas continued as tenants, and delivered the owner's share of the produce to Cuba, Jr. and Bienvenido.2

On January 13, 1993, Cuba, Jr. executed a Deed of Absolute Sale of Unregistered Land, transferring the property to respondent Pacita Uy, married to respondent Paquito Uy, in consideration of PhP 80,000. Cuba, Jr. was named owner of the land. Notably, the Deed was not registered with the Register of Deeds. Later, Cuba, Jr. executed a Deed of Assignment or Transfer of Rights of the undelivered owner's share of the produce in favor of Pacita.

On July 13, 1993, Pacita demanded that the Laynesas vacate the land. She claimed that she had purchased the land. The Laynesas asked for proof of Pacita's acquisition, but she could not produce any.

Subsequently, Pacita returned and again demanded that the Laynesas vacate the property, this time exhibiting the Deed of Absolute Sale of Unregistrered Land signed by Cuba, Jr. Consequently, the Laynesas filed on October 13, 1993 a petition against Pacita with the Department of Agrarian Reform Adjudication Board (DARAB), docketed as DARAB Case No. 730 for Legal Redemption entitled Santos Laynesa, et al. v. Paquito Uy. The Laynesas primarily sought that they be allowed to redeem the land from Pacita.3

Thereafter, on November 25, 1993, Pacita filed a complaint docketed as DARAB Case No. 745 entitled Pacita Uy v. Santos Laynesa, et al. for Collection of Rentals and Ejectment against the Laynesas with the DARAB.

Cuba, Jr. died intestate on December 23, 1993.4

On February 10, 1994, the Laynesas deposited PhP 80,000 in the form of a Cashier's Check with the Clerk of Court of the DARAB by way of consignation of the redemption price of the property.

Meanwhile, the heirs of Bienvenido filed a petition with the Camarines Sur Regional Trial Court (RTC) for the judicial declaration of presumptive death of their father who had been missing since 1984.5

Afterwards, on June 20, 1994, the heirs of Bienvenido, with Reynoso and Carmelita Sunga, filed a Complaint docketed as Civil Case No. P-1963 for Annulment of Sale of Real Estate against the spouses Uy with the Camarines Sur RTC. They prayed that the court declare the Deed of Absolute Sale of Unregistered Land executed by Cuba, Jr. in favor of the spouses Uy as null and void, and the property returned to Cuba, Sr.'s intestate estate. The DARAB dismissed the complaint without prejudice to the two cases filed before it by the parties.6

Subsequently, the parties in Civil Case No. P-1963 amicably settled their dispute. In a Compromise Agreement approved by the RTC, the parties agreed to divide the property into two portions. Two hectares of rice lands would be transferred to the spouses Uy, and the remaining portion to Cuba, Sr.'s heirs. Thereafter, the Register of Deeds issued Transfer Certificate of Title (TCT) No. 23276 over a portion of the property with an area of 20,000 square meters in the names of the spouses Uy.

Meanwhile, Pacita obtained a certification from the Municipal Agricultural Office (MAO) that the property was not prime agricultural property, and from the Municipal Agrarian Reform Office (MARO) that TCT No. 23276 was not covered by Operation Land Transfer (OLT) or by Presidential Decree No. (PD) 27. The certifications were sought so the land could be reclassified as industrial land.

On May 29, 1995, the Municipal Council of Tagbong, Pili, Camarines Sur approved Resolution No. 67, which embodied Ordinance No. 28 and reclassified the land from agricultural to industrial.

On July 17, 1995, the Laynesas filed a Complaint dated July 13, 1995, docketed as DARAB Case No. V-RC-028 and entitled Nicolas Laynesa, et al. v. Paquito Uy, et al. for Threatened Ejectment and Redemption with a Prayer for the issuance of Writ of Preliminary Injunction with the DARAB. In the Complaint, the Laynesas sought to redeem the property covered by TCT No. 23276 for PhP 40,000.

In their Answer dated August 15, 1995, the spouses Uy alleged that the Laynesas had no cause of action against them, and even assuming that the Laynesas had, the action was already barred by estoppel and laches, the complaint was already moot and academic, and the DARAB had no jurisdiction since the land had already been reclassified as industrial land.

On January 12, 1996, DARAB Provincial Adjudicator Isabel E. Florin issued a Decision, the dispositive portion of which states:

WHEREFORE, the foregoing considered, judgment is hereby rendered

1. Granting the petition for redemption by the plaintiffs herein of the two-hectare Riceland now titled in the name of Pacita E. Uy with TCT No. T-23276, for Nicolas Laynesa, his .5 hectare tillage and for Santos Laynesa, his 1.5 hectares tillage in the consolidated amount of P60,000.00;

2. Ordering the conveyance of subject lots to herein plaintiffs as above-stated;

3. Ordering defendants to pay plaintiffs temperate damages of P15,000.00; exemplary damages of P20,000.00; Attorney's fees of P12,000.00; and appearance fees of P2,400.00.

4. Declaring the injunction permanent, unless the appropriate Order allowing conversion is thereby presented.

SO ORDERED.7

Thereafter, the spouses Uy filed a Motion for Reconsideration. In an Order dated February 27, 1996,8 the DARAB affirmed the Decision of the adjudicator, but with the modification to set aside the award of damages.

The spouses Uy appealed to the Court of Appeals (CA).

The CA ruled DARAB without jurisdiction

On May 16, 2001, the CA issued a Decision in CA-G.R. SP No. 59454, reversing the Decision of the DARAB. The dispositive portion of the CA Decision reads:

IN THE LIGHT OF ALL THE FOREGOING, the Decision of the DARAB, Annex "A" of the Petition and its Resolution, Annex "B" of the Petition are set aside and reversed. The Complaint of the Respondents and the counterclaims of the Petitioners are DISMISSED.

SO ORDERED.9

According to the CA, the evidence on record shows that when the Laynesas filed their action with the DARAB, the property was no longer agricultural but had been reclassified. Thus, the DARAB had no jurisdiction.

Hence, we have this Petition for Review on Certiorari under Rule 45.

The Issues

[T]he Honorable Court of Appeals (Fourteenth Division), seriously erred and/or committed grave error in:

A. Holding that at the time of the filing of the Complaint (V-RC-028-CS-Branch 1) the land subject matter of the case ceases to be agricultural by virtue of the reclassification made by Municipal Ordinance No. 28 of Pili, Camarines Sur, so that the DARAB has no jurisdiction over the dispute involving said land and that the Decision of the DARAB is null and void.

B. Holding that the reclassification alone of an agricultural land by a Municipal Ordinance from agricultural to any other uses without the necessary conversion Order from the DAR is enough to divest the DAR of jurisdiction to hear and determine any agrarian disputes involving the land.10

The pivotal issue in this case is whether the reclassification of a lot by a municipal ordinance, without the Department of Agrarian Reform's (DAR's) approval, suffices to oust the jurisdiction of the DARAB over a petition for legal redemption filed by the tenants.

There are strict requirements for the

valid reclassification of land by a local government unit

The resolution of this case is not that simple.

There is no question that petitioners-Laynesas are the tenants of the previous owner of the land. As such, disputes pertaining to the land tenancy were within the jurisdiction of the DAR. However, respondents-spouses Uy posit that after the issuance of Municipal Council Resolution No. 67, reclassifying the land on May 29, 1995, the land ceased to be agricultural and is therefore beyond the jurisdiction of the DARAB.

Previously, under Republic Act No. (RA) 3844, all agrarian disputes fell within the exclusive jurisdiction of the Court of Agrarian Relations. Later, the jurisdiction over such disputes went to the RTCs.11 When RA 6657, otherwise known as the Comprehensive Agrarian Reform Law, took effect on June 15, 1988, the adjudication of agrarian reform disputes was placed under the jurisdiction of the DAR, thus:

Section 50. Quasi-Judicial Powers of the DAR. - The DAR is hereby vested with primary jurisdiction to determine and adjudicate agrarian reform matters and shall have exclusive original jurisdiction over all matters involving the implementation of agrarian reform, except those falling under the exclusive jurisdiction of the Department of Agriculture (DA) and the Department of Environment and Natural Resources (DENR).

x x x

Notwithstanding an appeal to the Court of Appeals, the decision of the DAR shall be immediately executory.

However, Section 56 of RA 6657 vested original and exclusive jurisdiction over controversies involving the determination of just compensation and prosecution of all criminal offenses arising from violations of RA 6657 to RTCs designated as Special Agrarian Courts.

From the cited legal provisions, it cannot be disputed that the DAR, through the DARAB, shall exercise quasi-judicial functions and has exclusive original jurisdiction over all disputes involving the enforcement and implementation of all agrarian reform laws.

Sec. 4 of RA 6657 tells us which lands are covered by the Comprehensive Agrarian Reform Program, thus:

Section 4. Scope. - The Comprehensive Agrarian Reform Law of 1988 shall cover; regardless of tenurial arrangement and commodity produced, all public and private agricultural lands as provided in Proclamation No. 131 and Executive Order No. 229, including other lands of the public domain suitable for agriculture. (Emphasis supplied.)

However, in 1991, RA 7160 or the Local Government Code was passed into law, granting local government units the power to reclassify land. Being a later law, RA 7160 shall govern in case of conflict between it and RA 6657, as to the issue of reclassification. Title I, Chapter 2, Sec. 20 of RA 7160 states:

SEC. 20. Reclassification of Lands. - - (a) A city or municipality may, through an ordinance passed by the sanggunian after conducting public hearings for the purpose, authorize the reclassification of agricultural lands and provide for the manner of their utilization or disposition in the following cases: (1) when the land ceases to be economically feasible and sound for agricultural purposes as determined by the Department of Agriculture or (2) where the land shall have substantially greater economic value for residential, commercial, or industrial purposes, as determined by the sanggunian concerned: Provided, That such reclassification shall be limited to the following percentage of the total agricultural land area at the time of the passage of the ordinance:

(1) For highly urbanized and independent component cities, fifteen percent (15%);

(2) For component cities and first to third class municipalities, ten percent (10%); andcralawlibrary

(3) For fourth to sixth class municipalities, five percent (5%): Provided, further, That agricultural lands distributed to agrarian reform beneficiaries pursuant to [RA 6657], otherwise known as "The Comprehensive Agrarian Reform Law", shall not be affected by the said reclassification and the conversion of such lands into other purposes shall be governed by Section 65 of said Act.

(b) The President may, when public interest so requires and upon recommendation of the National Economic and Development Authority, authorize a city or municipality to reclassify lands in excess of the limits set in the next preceding paragraph.

(c) The local government units shall, in conformity with existing laws, continue to prepare their respective comprehensive land use plans enacted through zoning ordinances which shall be the primary and dominant bases for the future use of land resources: Provided, That the requirements for food production, human settlements, and industrial expansion shall be taken into consideration in the preparation of such plans.

(d) Where approval by a national agency is required for reclassification, such approval shall not be unreasonably withheld. Failure to act on a proper and complete application for reclassification within three (3) months from receipt of the same shall be deemed as approval thereof.

(e) Nothing in this Section shall be construed as repealing, amending, or modifying in any manner the provisions of [RA] 6657.

Pursuant to RA 7160, then President Fidel Ramos issued Memorandum Circular No. (MC) 54 on June 8, 1993, providing the guidelines in the implementation of the above Sec. 20 of the Local Government Code, as follows:

SECTION 1. Scope and Limitations. - (a) Cities and municipalities with comprehensive land use plans reviewed and approved in accordance with EO 72 (1993), may authorize the reclassification of agricultural lands into non-agricultural uses and provide for the manner of their utilization or disposition, subject to the limitations and other conditions prescribed in this Order.

(b) Agricultural lands may be reclassified in the following cases:

(1) when the land ceases to be economically feasible and sound for agricultural purposes as determined by the Department of Agriculture (DA), in accordance with the standards and guidelines prescribed for the purpose; or (2) where the land shall have substantially greater economic value for residential, commercial, or industrial purposes as determined by the sanggunian concerned, the city/municipality concerned should notify the DA, HLRB, DTI, DOT and other concerned agencies on the proposed reclassification of agricultural lands furnishing them copies of the report of the local development council including the draft ordinance on the matter for their comments, proposals and recommendations within seven (7) days upon receipt.

(c) However, such reclassification shall be limited to a maximum of the percentage of the total agricultural land of a city or municipality at the time of the passage of the ordinance as follows:

(1) For highly urbanized and independent component cities, fifteen percent (15%);

(2) For component cities and first to third class municipalities, ten percent (10%); andcralawlibrary

(3) For fourth to sixth class municipalities, five percent (5%).

(d) In addition, the following types of agricultural lands shall not be covered by the said reclassification:

(1) Agricultural lands distributed to agrarian reform beneficiaries subject to Section 65 of RA 6557;

(2) Agricultural lands already issued a notice of coverage or voluntarily offered for coverage under CARP.

(3) Agricultural lands identified under AO 20, s. of 1992, as non-negotiable for conversion as follows:

(i) All irrigated lands where water is available to support rice and other crop production;

(ii) All irrigated lands where water is not available for rice and other crop production but within areas programmed for irrigation facility rehabilitation by DA and National Irrigation Administration (NIA); andcralawlibrary

(iii) All irrigable lands already covered by irrigation projects with form funding commitments at the time of the application for land conversion or reclassification.

(e) The President may, when public interest so requires and upon recommendation of the National Economic Development Authority (NEDA), authorize a city or municipality to reclassify lands in excess of the limits set in paragraph (d) hereof. For this purpose, NEDA is hereby directed to issue the implementing guidelines governing the authority of cities and municipalities to reclassify lands in excess of the limits prescribed herein.

SECTION 2. Requirements and Procedures for Reclassification. - (a) The city or municipal development council (CDC/MDC) shall recommend to the sangguniang panlungsod or sangguniang bayan, as the case may be, the reclassification of agricultural lands within its jurisdiction based on the requirements of local development.

(b) Prior to the enactment of an ordinance reclassifying agricultural lands as provided under Sec. 1 hereof, the sanggunian concerned must first secure the following certificates [from] the concerned national government agencies (NGAs):

(1) A certification from DA indicating -

(i) the total area of existing agricultural lands in the LGU concerned;

(ii) that which lands are not classified as non-negotiable for conversion or reclassification under AO 20 (1992); andcralawlibrary

(iii) that the land ceases to be economically feasible and sound for agricultural purposes in the case of Sec. 1 (b-1).

(2) A certification from DAR indicating that such lands are not distributed or not covered by a notice of coverage or not voluntarily offered for coverage under CARP.

(c) The HLRB shall serve as the coordinating agency for the issuance of the certificates as required under the preceding paragraph. All applications for reclassification shall, therefore, be submitted by the concerned LGUs to the HLRB, upon receipt of such application, the HLRB shall conduct initial review to determine if:

(1) the city or municipality concerned has an existing comprehensive land use plan reviewed and approved in accordance with EO 72 (1993); andcralawlibrary

(2) the proposed reclassification complies with the limitations prescribed in SECTION 1 (d) hereof.

Upon determination that the above conditions have been satisfied, the HLRB shall then consult with the concerned agencies on the required certifications. The HLRB shall inform the concerned agencies, city or municipality of the result of their review and consultation. If the land being reclassified is in excess of the limit, the application shall be submitted to NEDA.

Failure of the HLRB and the NGAs to act on a proper and complete application within three months from receipt of the same shall be deemed as approved thereof.

(d) Reclassification of agricultural lands may be authorized through an ordinance enacted by the sangguniang panlungsod or sangguniang bayan, as the case may be, after conducting public hearings for the purpose. Such ordinance shall be enacted and approved in accordance with Articles 107 and 108 of the IRR of the LGC.

(e) Provisions of Sec. 1 (b-2) hereof to the contrary notwithstanding, the sanggunian concerned shall seek the advice of DA prior to the enactment of an ordinance reclassifying agricultural lands. If the DA has failed to act on such request within thirty (30) days from receipt thereof, the same shall be deemed to have been complied with.

Should the land subject to reclassification is found to be still economically feasible for agriculture, the DA shall recommend to the LGU concerned alternative areas for development purposes.

(f) Upon issuance of the certifications enumerated in Section 2 (b) hereof, the sanggunian concerned may now enact an ordinance authorizing the reclassification of agricultural lands and providing for the manner of their utilization or disposition. Such ordinance shall likewise update the comprehensive land use plans of the LGU concerned. (Emphasis supplied.)

It is because of the authority granted to a city or municipality by Sec. 20 of RA 7160 coupled with the implementing guidelines laid down in MC 54 dated June 8, 1993 that the CA was convinced to rule that the disputed lot is no longer agricultural but industrial land and, hence, the DARAB does not have or has lost jurisdiction over the subject matter of DARAB Case No. V-RC-028.

This position is incorrect.

Despite the reclassification of an agricultural land to non-agricultural land by a local government unit under Sec. 20 of RA 7160, the DARAB still retains jurisdiction over a complaint filed by a tenant of the land in question for threatened ejectment and redemption for the following reasons:

(1) Jurisdiction is determined by the statute in force at the time of the commencement of the action.12 Likewise settled is the rule that jurisdiction over the subject matter is determined by the allegations of the complaint.13 DARAB Case No. V-RC-028 was filed by the tenants of an agricultural land for threatened ejectment and its redemption from respondents. It cannot be questioned that the averments of the DARAB case clearly pertain to an agrarian reform matter and involve the implementation of the agrarian reform laws. Such being the case, the complaint falls within the jurisdiction of the DARAB under Sec. 50 of RA 6657 on the quasi-judicial powers of the DAR. It bears stressing that the DAR has primary jurisdiction to determine and adjudicate agrarian reform matters and shall have exclusive original jurisdiction over all matters involving the implementation of the agrarian reform except those falling under the exclusive jurisdiction of the Department of Agriculture (DA) and the Department of Environment and Natural Resources (DENR). Primary jurisdiction means in case of seeming conflict between the jurisdictions of the DAR and regular courts, preference is vested with the DAR because of its expertise and experience in agrarian reform matters. Sec. 50 is also explicit that except for the DA and DENR, all agrarian reform matters are within the exclusive original jurisdiction of the DAR.

(2) Sec. 20(e) of RA 7160 is unequivocal that nothing in said section shall be construed "as repealing, amending or modifying in any manner the provisions of [RA] 6657." As such, Sec. 50 of RA 6657 on quasi-judicial powers of the DAR has not been repealed by RA 7160.

In view of the foregoing reasons, we rule that the DARAB retains jurisdiction over disputes arising from agrarian reform matters even though the landowner or respondent interposes the defense of reclassification of the subject lot from agricultural to non-agricultural use.

On the issue of whether there has been a valid reclassification of the subject lot to industrial land, we rule that respondents failed to adduce substantial evidence to buttress their assertion that all the conditions and requirements set by RA 7160 and MC 54 have been satisfied.

Respondent Pacita only procured a MAO certification that the property was not prime agricultural property. The MARO certified that the land was not covered by the OLT under PD 27. These two certifications will not suffice for the following reasons:

(1) Sec. 20 of RA 7160 requires submission of the recommendation or certification from the DA that the land ceases to be economically feasible or sound for agricultural purposes. In this case, the MAO certification attests only that the lot is no longer "prime agricultural property."

(2) Sec. 20 requires a certification from the DAR that the land has not yet been distributed to beneficiaries under RA 6657 which took effect on June 15, 1988 nor covered by a notice of coverage. In the case at bar, the MARO certification which pertains only to PD 27 does not suffice.

(3) Respondents have not shown any compliance with Sec. 2 of MC 54 on the additional requirements and procedures for reclassification such as the Housing and Land Use Regulatory Board's report and recommendation, the requisite public hearings, and the DA's report and recommendation.

Based on the foregoing reasons, respondents have failed to satisfy the requirements prescribed in Sec. 20 of RA 7160 and MC 54 and, hence, relief must be granted to petitioners.

Landowners must understand that while RA 7160, the Local Government Code, granted local government units the power to reclassify agricultural land, the stringent requirements set forth in Sec. 30 of said Code must be strictly complied with. Such adherence to the legal prescriptions is found wanting in the case at bar.

Be that as it may, the DARAB erred in awarding damages to petitioners.

In Saba v. Court of Appeals, we ruled that the exercise of one's rights does not make him liable for damages, thus: "One who exercises his rights does no injury. Qui jure suo utitur nullum damnum facit. If damage results from a person's exercising his legal rights, it is damnum absque injuria."14

This principle was further explained by this Court in the case of Custodio v. Court of Appeals, to wit:

However, the mere fact that the plaintiff suffered losses does not give rise to a right to recover damages. To warrant the recovery of damages, there must be both a right of action for a legal wrong inflicted by the defendant, and damage resulting to the plaintiff therefrom. Wrong without damage, or damage without wrong, does not constitute a cause of action, since damages are merely part of the remedy allowed for the injury caused by a breach or wrong.

There is a material distinction between damages and injury. Injury is the illegal invasion of a legal right; damage is the loss, hurt, or harm which results from the injury; and damages are the recompense or compensation awarded for the damage suffered. Thus, there can be damage without injury in those instances in which the loss or harm was not the result of a violation of a legal duty. These situations are often called damnum absque injuria. In order that a plaintiff may maintain an action for the injuries of which he complains, he must establish that such injuries resulted from a breach of duty which the defendant owed to the plaintiff - a concurrence of injury to the plaintiff and legal responsibility by the person causing it. The underlying basis for the award of tort damages is the premise that an individual was injured in contemplation of law. Thus, there must first be the breach of some duty and the imposition of liability for that breach before damages may be awarded; it is not sufficient to state that there should be tort liability merely because the plaintiff suffered some pain and suffering.

Many accidents occur and many injuries are inflicted by acts or omissions which cause damage or loss to another but which violate no legal duty to such other person, and consequently create no cause of action in his favor. In such cases, the consequences must be borne by the injured person alone. The law affords no remedy for damages resulting from an act which does not amount to a legal injury or wrong.

In other words, in order that the law will give redress for an act causing damage, that act must be not only hurtful, but wrongful. There must be damnum et injuria. If, as may happen in many cases, a person sustains actual damage, that is, harm or loss to his person or property, without sustaining any legal injury, that is, an act or omission which the law does not deem an injury, the damage is regarded as damnum absque injuria.15

Thus, in Government Service Insurance System v. Labung-Deang16 and Premiere Development Bank v. Court of Appeals,17 this Court ruled that temperate damages will only be awarded by virtue of the wrongful act of a party.

Whereas in Cathay Pacific Airways, Ltd. v. Vasquez, we ruled that exemplary damages may only be awarded if the act of the offender is attended by bad faith or done in wanton, fraudulent, or malevolent manner.18

In the instant case, the RTC awarded damages to petitioners on the ground that respondents dumped earthfill materials during the pendency of the case. It must be pointed out that the RTC did not issue a preliminary injunction or temporary restraining order (TRO) against respondents.

Contrary to this finding of the trial court, respondents did not act in bad faith or in a wanton, fraudulent, or malevolent manner; consequently, petitioners are not entitled to an award for damages. Respondents' dumping of earth filling materials on the subject land was but a lawful exercise of their rights as owners of the land. It must be remembered that respondents attempted to have the land reclassified through the Municipal Government of San Juan, Pili, Camarines Sur by virtue of Municipal Council Resolution No. 67 which embodied Ordinance No. 28. Given the disputable presumption that official duty was regularly performed,19 respondents were justified to presume that the reclassification of the land was lawful. It was also natural for respondents to conclude that such reclassification resulted in the dispossession of petitioners as tenants, there being no tenants of industrial land. Thus, respondents, at the time, could lawfully exercise their proprietary rights over the land, including the dumping of earth filling materials thereon. Moreover, the pendency of the case before the RTC, absent a preliminary injunction or TRO against respondents, would not preclude respondents from exercising their rights. Although this reclassification has now been declared to be ineffectual, for failing to comply with the provisions of RA 7160, respondents cannot be made liable for damages. Respondents' exercise of acts of ownership over the land, at a time that the reclassification had not yet been declared as invalid and ineffectual, is a lawful exercise of their rights. And even though this may have prejudiced or injured petitioners, respondents cannot be made liable for it. As stated, respondents cannot be penalized for a lawful act.

Similarly, the instant case does not fall under any of the grounds set forth in Article 2208 of the Civil Code to justify the award for attorney's fees and expenses of litigation. Thus, there are also no grounds for the DARAB's grant of attorney's fees and appearance fees in favor of petitioners.

Therefore, the RTC's award for exemplary and temperate damages, as well as attorney's and appearance fees, must be deleted.

WHEREFORE, the petition is GRANTED. The May 16, 2001 CA Decision in CA-G.R. SP No. 59454 is REVERSED and SET ASIDE. The February 27, 1996 DARAB Order and January 12, 1996 Decision of DARAB Provincial Adjudicator Florin in DARAB Case No. V-RC-028 are AFFIRMED with the MODIFICATION that the award for temperate and exemplary damages and attorney's and appearance fees is DELETED.

No costs.

SO ORDERED.

Endnotes:


* On official leave.

** Additional member as per Special Order No. 485 dated February 14, 2008.

1 Rollo, p. 87.

2 Id. at 88.

3 Id. at 88-89.

4 Id.

5 Id. at 90.

6 Id. at 90-91.

7 Id. at 65-66.

8 Id. at 67-69.

9 Id. at 87-103. Penned by Associate Justice Romeo J. Callejo, Sr. (Chairperson, now a retired member of this Court) and concurred in by Associate Justices Renato C. Dacudao and Perlita Tria-Tirona.

10 Id. at 9.

11 R.P. Barte, Law on Agrarian Reform 24.

12 Lee v. Presiding Judge, MTC of Legaspi City, Br. I, No. L-68789, November 10, 1986, 145 SCRA 408, 415.

13 Ganadin v. Ramos, No. L-23547, September 11, 1980, 99 SCRA 613, 621.

14 G.R. No. 77950, August 24, 1990, 189 SCRA 50, 55; citations omitted.

15 G.R. No. 116100, February 9, 1996, 253 SCRA 483, 489-491.

16 G.R. No. 135644, September 17, 2001, 365 SCRA 341, 350.

17 G.R. No. 159352, April 14, 2004, 427 SCRA 686, 700.

18 G.R. No. 150843, March 14, 2003, 399 SCRA 207, 223.

19 RULES OF COURT, Rule 131, Sec. 3(m).

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