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G.R. No. 200491, June 09, 2014




Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to reverse and set aside the Decision1 and Resolution,2 dated June 27, 2011 and January 31, 2012, respectively, of the Court of Appeals (CA) in CA-G.R. SP No. 110585.

The antecedents follow.

Respondent Laguna Estate Development Corporation (LEDC) filed a request with the Ministry of Agrarian Reform (now Department of Agrarian Reform) for the conversion of ten (10) parcels of land consisting of an aggregate area of 216.7394 hectares located in the Province of Laguna from agricultural to residential land, pursuant to Republic Act (RA) No. 3844, as amended by Presidential Decree (P.D.) No. 815.3  On June 4, 1979, then Minister Conrado F. Estrella issued an Order granting respondent’s request provided that certain conditions are complied with, one of which was that the development of the site shall commence within two (2) years from receipt of the order of conversion.4cralawred

On July 4, 2004, petitioner KASAMAKA-Canlubang, Inc. filed a petition with the Department of Agrarian Reform (DAR) for the revocation of the conversion order, alleging that respondent failed to develop the subject parcels of land.5  On September 25, 2006, then DAR Secretary Nasser C. Pangandaman issued an Order partially revoking the coversion order as to eight (8) out of the ten (10) parcels of land consisting of an aggregate area of 66.7394 hectares, all registered in the name of Canlubang Sugar Estate.6  The remaining two (2) parcels of land, each registered in the names of respondent LEDC and Jose Yulo, Jr., were excluded from the revocation by virtue of a DAR Exemption Order issued on June 26, 1992, which removed said lands from the ambit of RA No. 6657, otherwise known as the Comprehensive Agrarian Reform Law (CARL) of 1998.7cralawred

Respondent then filed a motion for reconsideration, alleging that the eight (8) parcels of land in question are likewise outside the ambit of the CARL on the basis of zoning ordinances issued by the municipalities concerned reclassifying said lands as non-agricultural.8  On June 10, 2008, the DAR, through its Center for Land Use Policy, Planning and Implementation (CLUPPI) Committee-A, field officials and personnel, and representatives of both respondent and petitioner conducted an ocular inspection of the subject lands and found that out of the eight (8) parcels of land, two (2) parcels of land, particularly Lot No. 2-C under TCT No. 82523 and Lot No. 1997-X-A under TCT No. T-82517, remained undeveloped.9  Despite this, however, the CLUPPI Committee-A declared that, with the exception of one (1) parcel of land, specifically Lot No. 1-A-4 under TCT No. T-82586, respondent failed to substantially comply with the condition of the conversion order to develop the eight (8) subject parcels of land.  On August 8, 2008, DAR Secretary Pangandaman issued an Order affirming his previous Order with the exception of the land under TCT No. T-82586, as concluded by the CLUPPI Committee-A.10cralawred

Aggrieved, respondent filed an appeal with the Office of the President (OP), which granted the same in a Decision dated March 23, 2009 and declared the remaining seven (7) parcels of land in question exempt from the coverage of the CARL and reinstated the Conversion Order dated June 4, 1979.11  The Motion for Reconsideration filed by petitioner was further denied by said Office.12cralawred

On October 8, 2009, petitioner filed a Petition for Review with the CA alleging that the OP erred in approving respondent’s appeal in light of the findings of the DAR.  On June 27, 2011, the CA dismissed the petition for lack of merit.  Petitioner’s Motion for Reconsideration was, subsequently, denied in the CA Resolution dated January 31, 2012.  Hence, this petition filed by petitioners raising the following issues:chanRoblesvirtualLawlibrary





Petitioner contends that the CA failed to consider the findings of the DAR, through its ocular investigation, that there are significant areas of the subject parcels of land which remain undeveloped.  On the basis of said investigations, DAR Secretary Pangandaman revoked the order of conversion pertaining to the seven (7) out of the ten (10) lands in question.  By claiming that the burden of proof shifted to the respondent, petitioner maintains that respondent failed to overcome the same by proving substantial compliance with the conditions of the order of conversion.15cralawred

Petitioner further argues that the municipal zoning ordinances classifying the disputed lands to non-agricultural did not change the nature and character of said lands from being agricultural, much less affect the legal relationship of the farmers and workers of the Canlubang Sugar Estate then existing prior to the granting of the order of conversion and the passage of the municipal zoning ordinances.16cralawred

We disagree.

Time and again, this Court has reiterated the well-established rule that findings of fact by the CA are accorded the highest degree of respect, conclusive on the parties, which will generally not be disturbed on appeal.17  Such findings are likewise binding and conclusive on this Court.  Moreover, under the Rules of Court and the 1997 Rules of Civil Procedure, only questions of law may be raised in a petition for review on certiorari.18  The jurisdiction of this Court is, therefore, limited only to the review of errors of law allegedly committed by the CA.19cralawred

This rule, however, admits of certain exceptions, wherein this Court may alter, modify or even reverse the finding of the CA, to wit:chanRoblesvirtualLawlibrary

(1) when the conclusion is a finding grounded entirely on speculation, surmises and conjectures;  (2)  when the inference made is manifestly mistaken, absurd and impossible; (3) where there is a grave abuse of discretion; (4) when the judgment is based on a misapprehension of facts; (5) when the findings of fact are conflicting; (6) when the Court of Appeals, in making its findings, went beyond the issues of the case and the same is contrary to the admission of both appellant and appellee; (7) when the findings are contrary to those of the trial court; (8) when the findings of fact are conclusions without citation of specific evidence on which they are based; (9) when the facts set forth in the petition as well as in the petitioner’s main and reply briefs are not disputed by the respondents; and (10) when the findings of fact of the Court of Appeals are premised on the supposed absence of evidence and contradicted by the evidence or record.20

In the case at hand, whether respondent complied with the condition imposed by the order of conversion is a question of fact which necessitates an examination of the probative value of the evidence presented by the parties, their relation to each other, and the probabilities of the situation.21  But this Court is not a trier of facts.  For this reason, We have held that when the findings of the CA are supported by substantial evidence, they are conclusive on the parties.  As shall be explained below, We find no compelling reason to disturb the factual findings of the CA here.  In the absence of any showing that the present case falls under the aforementioned exceptions calling for a re-evaluation of evidence, We refrain from disturbing the findings of fact by the CA.

In its Decision, the CA ruled that DAR Secretary Pangandaman, in arriving at his August 8, 2008 Order, merely relied on the deliberation of the CLUPPI Committee, despite the inconsistency disclosed by said Committee’s ocular inspection report.22  Such ocular inspection report stated that “out of the eight (8) parcels of land, Lot No. 2-c under TCT No. 82523 x x x and Lot No. 1997-X-A under TCT No. T-82517 x x x, remained undeveloped.  In other words, six (6) out of the eight (8) parcels of land have been developed.  Yet the DAR Secretary issued an Order affirming his revocation of the conversion of the subject lands with the exception of the lot under TCT No. T-82586.23  Thus, DAR Secretary Pangandaman effectively revoked seven (7) out of the eight (8) parcels of land, in stark contrast with the findings of the ocular inspection report.24  Had the DAR Secretary based his Order on the ocular report findings, the revocation should have affected only two (2) out of the eight (8) parcels of land.  Clearly, there is an inconsistency between the Order and the ocular report.  We, therefore, agree with the CA when it ruled that it cannot sustain the DAR Secretary’s revocation due to the fact that the same was based on inconsistent findings.

In addition, petitioner makes mention of an Order issued by the DAR on September 4, 1975 which requires an applicant of a conversion order to develop the property converted within two (2) years.25  Petitioner also cites an ocular inspection conducted on June 27-29, 2005 as well as certain findings of the CLUPPI Committee, which states that a large portion of the disputed lands herein remain to be developed.  However, the CA maintained that petitioner failed to attach these documents, along with other pertinent evidence, such as respondent’s original site development plan vis-à-vis the level of accomplishment or completion.26  We believe that this failure of the petitioner to attach supporting evidence is fatal.  The petitioner, contrary to its assertion, had the burden to prove by substantial evidence, the allegations on which its complaint was based.27  However, in failing to submit convincing and satisfactory proof, petitioner failed to overcome the burden of proving respondent’s non-compliance with the conversion order.

It is worth mentioning that while respondent did not have the burden of proof, the Office of the President found that it had presented satisfactory evidence showing that it, indeed, commenced development works on the properties, to wit:chanRoblesvirtualLawlibrary

In its Supplemental Motion for Partial Reconsideration dated April 23, 2007, respondent-appellant submitted documents showing the developments in the remaining properties.  Road networks already existed, and were intended for subdivision projects.  Even the Ocular Inspection Report dated June 10, 2008 confirmed the existence of improvements over the remaining properties:  “x x x Other lots have concrete roads, drainage, and electrification. x x x.”

It is also notable that there were other activities being conducted on the remaining properties, which prompted petitioner-appellee to seek issuance of a Cease and Desist Order x x x.

Such acts constitute activities leading to the further development of the remaining properties.  After all, the fifth term and condition of the Conversion Order dated June 4, 1979 was to commence the development of the site “within two (2) years from receipt of the order of conversion.”  Out of the 216.7396 hectares approved for conversion into a subdivision project by DAR in 1979, only 60.8374 hectares, more or less, remain to be developed. x x x It is common knowledge that subdivision developments are usually undertaken in phases.

x x x x

x x x As the June 10, 2008 findings of the Ocular Inspection revealed, TCT No. T-82586 has been cancelled and was already registered in the name of Fairway Villas Development Corporation; TCT Nos. T-82524, T-82579, T-82582, T-82584, and T-82585 has been either conveyed or transferred to other persons or corporations as of 1977.  These facts bolster the contention that said properties are, indeed, excluded from CARP coverage.  Having been converted into a residential subdivision by virtue of the June 4, 1979 Order x x x, the remaining properties can no longer be subjected to compulsory coverage.  x x x.28

Thus, considering the insufficiency of evidence presented by the petitioner, the inconsistencies in the findings of the DAR, and the satisfactory substantiations of the respondent, We find no reason to reverse the findings of the CA.

It bears stressing that the preceding discussion, notwithstanding, the disputed lands have already been removed from the ambit of the CARL on the basis of zoning ordinances of the concerned municipalities reclassifying said lands as non-agricultural, as noted by the Office of the President, viz.:chanRoblesvirtualLawlibrary

Moreover, current developments would show that the zoning classification where the remaining properties are situated is within the Medium Density Residential Zone.  Records  reveal certifications in support of the remaining properties’ exclusion from CARP coverage, such as (1)  Two Certificate of Zoning Classification dated October 18, 2006 issued by the Mayor and Zoning Administrator of the City of Calamba for TCT No. T-82517; (2) Two Certifications of the Municipal Planning and Development Coordinator for the Municipality of Cabuyao, Province of Laguna, both dated October 16, 2006, for TCT Nos. 82523, 82524, 82579, 82582, 82584, 82585, and 82586; and (3) Certification from the HLURB dated October 16, 2008 that Municipal Ordinance No. 110-54, Series of 1979 (Ordinance Adopting Comprehensive Zoning Regulations for the Municipality of Calamba, Province of  Laguna and Providing for the Administration, Enforcement and Amendment Thereof and for the Repeal of all Ordinances in Conflict Therewith) accepted by the Sangguniang Bayan of Cabuyao on November 3, 1979 was conditionally approved by the Human Settlements Regulatory Commission (now HLURB) under Resolution No. 38-2 dated June 25, 1980.29cralawlawlibrary

The power of the cities and municipalities, such as the Municipality of Calamba, to adopt zoning ordinances or regulations converting lands into non-agricultural cannot be denied.  In Buklod ng Magbubukid sa Lupaing Ramos, Inc. v. E. M. Ramos and Sons, Inc.,30 this Court recognized said power in the following manner:chanRoblesvirtualLawlibrary

Section 3 of R.A. No. 2264, otherwise known at the Local Autonomy Act, empowers a Municipal Council “to adopt zoning and subdivision ordinances or regulations” for the municipality.  Clearly, the law does not restrict the exercise of the power through an ordinance.  Therefore, granting that Resolution No. 27 is not an ordinance, it certainly is a regulatory measure within the intendment or ambit of the word “regulation” under the provision.  As a matter of fact the same section declares that the power exists “(A)ny provision of law to the contrary notwithstanding.  x x x.”

x x x x

Section 3 (c), Chapter I of the CARL provides that a parcel of land reclassified for non-agricultural uses prior to June 15, 1988 shall no longer be considered agricultural land subject to CARP.  The Court is now faced with the question of whether Resolution No. 29-A of the Municipality of Dasmariñas dated July 9, 1972, which approved the subdivision of the subject property for residential purposes, had also reclassified the same from agricultural to residential.

x x x x

It may, therefore, be reasonably presumed that when city and municipal boards and councils approved an ordinance delineating an area or district in their cities or municipalities as residential, commercial, or industrial zone, pursuant to the power granted to them under Section 3 of the Local Autonomy Act of 1959, they were, at the same time, reclassifying any agricultural lands within the zone for non-agricultural use; hence, ensuring the implementation of and compliance with their zoning ordinances.  The logic and practicality behind such a presumption is more evident when considering the approval by local legislative bodies of subdivision ordinances and regulations.  The approval by city and municipal boards and councils of an application for subdivision through an ordinance should already be understood to include approval of the reclassification of the land, covered by said application, from agricultural to the intended non-agricultural use.  Otherwise, the approval of the subdivision application would serve no practical effect; for as long as the property covered by the application remains classified as agricultural, it could not be subdivided and developed for non-agricultural use.31

In view of the foregoing, this Court had, in multiple occasions, ruled that lands already classified as commercial, industrial or residential before the effectivity of the CARL, or June 15, 1988, are outside the coverage thereof.32  In Natalia Realty, Inc. v. Department of Agrarian Reform,33 for instance, we held that the DAR committed grave abuse of discretion when it placed undeveloped portions of land intended for residential use under the ambit of the CARL.  Similarly, in Pasong Bayabas Farmers Association, Inc. v. Court of Appeals,34 we nullified the decision of the Department of Agrarian Reform Adjudication Board (DARAB) declaring the land in dispute as agricultural and, thus, within the coverage of the CARL, when the same had already been reclassified as residential by several government agencies prior to the effectivity of the law.  We likewise held in Junio v. Garilao35 that properties identified as zonal areas not for agricultural use prior on June 15, 1988 are exempted from CARL coverage, even without confirmation or clearance from the DAR.

Applying the doctrines cited above, it cannot be denied that the disputed lands are likewise outside the ambit of the CARL.  As mentioned previously, by virtue of zoning ordinances issued by the Municipality of Calamba, Laguna, as accepted by the Sangguniang Bayan of Cabuyao and approved by the Human Settlements Regulatory Commission, the subject lands were effectively converted into residential areas.  These ordinances were issued and accepted in 1979 and 1980, or before the effectivity of the CARL which took effect on June 15, 1988.  It necessarily follows, therefore, that the properties herein can no longer be subject to compulsory coverage of the CARL.

Going now to petitioner’s argument that the municipal zoning ordinances classifying the disputed lands to non-agricultural did not ipso facto change the nature of said lands, much less affect the legal relationship of the farmers and workers of the Canlubang Sugar Estate then existing prior to the granting of the order of conversion and the passage of the municipal zoning ordinances.

In support of said argument, petitioner cites Co v. Intermediate Appellate Court,36 wherein we ruled that:chanRoblesvirtualLawlibrary

A reading of Metro Manila Zoning Ordinance No. 81-01, series of 1981, does not disclose any provision converting existing agricultural lands in the covered area into residential or light industrial. While it declared that after the passage of the measure, the subject area shall be used only for residential or light industrial purposes, it is not provided therein that it shall have a retroactive effect so as to discontinue all rights previously acquired over lands located within the zone which are neither residential nor light industrial in nature. This simply means that, if we apply the general rule, as we must, the ordinance should be given prospective application only. The further implication is that it should not change the nature of existing agricultural lands in the area or the legal relationships existing over such lands, x x x.37

Consequently, according to petitioner, the nature of the subject lands herein remained agricultural despite the passage of the municipal ordinances, which may not disturb the legal relationship of the farmers and workers of the Canlubang Sugar Estate.

The CA, however, refused to entertain the aforementioned argument in holding that it was the first time petitioner raised the same in its motion for reconsideration.38  Nevertheless, even assuming that petitioner was able to timely raise the issue, the same must necessarily fail.  As correctly pointed out by the respondent, there are essential distinctions between the facts in the Co case and the facts herein.

First, there exists an agricultural tenancy arrangement between the parties involved in the Co case. The land in question, even prior to the municipal ordinance declaring that the same shall be used only for residential or light industrial purposes, had already been subject to an agricultural lease wherein an agricultural tenant continued to cultivate the subject land which was impliedly allowed by the landowner by accepting a share in the produce.  In Ludo & Luym Development Corporation v. Barreto,39  we identified the following factors which indicate the existence of a tenancy relationship:chanRoblesvirtualLawlibrary

The issue of whether or not there exists a tenancy relationship between parties is best answered by law, specifically, The Agricultural Tenancy Act of the Philippines which defines “agricultural tenancy” as:ChanRoblesVirtualawlibrary
… [T]he physical possession by a person of land devoted to agriculture belonging to, or legally possessed by, another for the purpose of production through the labor of the former and of the members of his immediate farm household, in consideration of which the former agrees to share the harvest with the latter, or to pay a price of certain, either in produce or in money, or in both.
From the foregoing definition, the essential requisites of tenancy relationship are:ChanRoblesVirtualawlibrary
1.  the parties are the landholder and the tenant;
2.  the subject matter is agricultural land;
3.  there is consent;
4.  the purpose is agricultural production; and
5.  there is consideration.
All of the above requisites are indispensable in order to create or establish tenancy relationship between the parties. Inexorably, the absence of at least one requisite does not make the alleged tenant a de facto one for the simple reason that unless an individual has established one’s status as a de jure tenant, he is not entitled to security of tenure guaranteed by agricultural tenancy laws. Conversely, one cannot be ejected from the agricultural landholding on grounds not provided by law.  x x x40

In the case at bar, however, no such arrangement exists.  Apart from a mere statement that the lands in dispute was once part of the vast portion of the Canlubang Sugar Estate, wherein a large number of farmworkers tilled the land, petitioner did not present any supporting evidence that will show an indication of a leasehold arrangement.

In fact, Minister Estrella noted the following observation in his order of conversion:chanRoblesvirtualLawlibrary

The records show that the subject lands are not devoted to the production of palay and/or corn, unirrigated, untenanted, and not covered by Operation Land Transfer Under P.D. 27, as per investigation conducted by the Agrarian Reform Field Offices concerned. Further, the parcels of land x x x are found to be suitable for conversion to residential subdivision and other urban purposes by the Ministry of Local Government and Community Development, and the proposed conversion is also found by the Human Settlements Regulatory Commission to be consistent with its zoning policies. (Emphasis supplied.)41

Had petitioner presented substantial evidence proving the existence of an agricultural tenancy arrangement, We could have given probative value to petitioner’s argument that municipal ordinances cannot affect nor discontinue legal rights and relationships previously acquired over the lands herein.

Second, the Co case did not involve an order of conversion categorically declaring the land as converted for residential use.  As stated by petitioner, the zoning ordinance in the Co case does not unequivocally disclose any provision converting the subject lands into residential or light industrial. Yet it is manifest, even from a plain reading of the order of conversion in this case, that the respondent’s application for converting the disputed lands from agricultural to residential is granted.42  As a consequence of such approval, the fact that the subject property is deemed zoned and reclassified as residential upon compliance with the conditions imposed cannot be questioned. Petitioner cannot, therefore, rely on the Co case given the fundamental differences of the same from the case at hand.

In view of the foregoing, we find no compelling reason to disturb the findings of the CA. As it correctly pointed out, petitioner failed to sufficiently prove respondent’s non-compliance with the condition provided by the conversion order to commence the development of the subject lands herein.  Petitioner further failed to refute the application of the rule that lands already classified as commercial, industrial or residential before the effectivity of the CARL, or June 15, 1988, are outside the coverage thereof. In the absence, therefore, of any convincing proof that the CA committed errors in its appreciation of facts, this Court will refrain from disturbing the ruling of the same.

WHEREFORE, the instant petition is hereby DENIED. The Decision of the Court of Appeals, dated June 27, 2011, and its Resolution dated January 31, 2012, in CA-G.R. SP No. 110585, which affirmed the Decision of the Office of the President, dated March 23, 2009, are AFFIRMED.


Velasco, Jr., (Chairperson), Villarama, Jr.,* Mendoza, and Leonen, JJ., concur.


* Designated Acting Member, per Special Order No. 1691 dated May 22, 2014.

1 Penned by Associate Justice Mario V. Lopez, with Associate Justices Magdangal M. De Leon and Socorro B. Inting, concurring;  Annex “A” to petition, rollo, pp. 31-41.

2 Annex “B” to petition, Id.  at 42-43.

3Id. at 31-32.

4Id. at 32-33.

5Id. at 33.




9Id. at 33-34.

10Id. at 34.

11Id. at 35.


13Id. at 20.

14Id. at 22.


16Id. at 25.

17Tiu v. Pasaol, 450 Phil. 370 (2003); Nokom v. NLRC, 390 Phil. 1228, 1242-1243 (2000) and Mendoza v. Court of Appeals, 240 Phil. 561, 567 (1987).

18 Section 1, Rule 45 of the 1997 Revised Rules of Civil Procedure provides:ChanRoblesVirtualawlibrary
Section 1. Filing of Petition with Supreme Court. – A party desiring to appeal by certiorari from a judgment or final order or resolution of the Court of Appeals, the Sandiganbayn, the Regional Trial court or other courts whenever authorized by law, may file with the supreme court a verified petition for review on certiorari. The petition shall raise only questions of law which must be distinctly set forth.  (1a, 2a)
19Changco v. Court of Appeals, 429 Phil. 336, 341 (2002).

20Duremdes v. Duremdes, 461 Phil. 388, 401-402 (2003), citing Spouses Tansipek v. Philippine Bank of Communications, 423 Phil. 727, 733-734 (2001).

21Western Shipyard Services, Inc. v. Court of Appeals, 410 Phil. 503, 512 (2001).

22Rollo, p. 33.

23Id. at 34.


25Id. at 36.

26Id. at 37.

27Honorable Ombudsman v. Bungubung, 575 Phil. 538, 556 (2008).

28Rollo, pp. 322-324.  (Emphasis ours)

29Id. at 323.  (Emphasis ours)

30Buklod ng Magbubukid sa Lupaing Ramos, Inc. v. E.M. Ramos and Sons, Inc., G.R. No. 131481 and 131624, March 16, 2011, 645 SCRA 401.

31Buklod ng Magbubukid sa Lupaing Ramos, Inc. v. E.M. Ramos and Sons, Inc., supra, at 427-433.  (Emphasis in the original)

32 Ros v. Department of Agrarian Reform, 505 Phil. 558, 566 (2005), and Department of Agrarian Reform v. Sarangani Agricultural Co., Inc., 541 Phil. 448, 461 (2007).

33 G.R. No. 103302, August 12, 1993, 225 SCRA 278.

34 473 Phil. 64 (2004).

35 503 Phil. 154, 167 (2005).

36 245 Phil. 347 (1988).

37Co v. Intermediate Appellate Court, supra, at 353.

38Rollo, p. 42.

39 508 Phil. 385 (2005).

40Ludo & Luym Development Corporation v. Barreto, supra, at 396-397.

41Rollo, p. 224.

42 Id.
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