Facts:

• Ayala Land, Inc. (ALI) and Capitol Citifarms, Inc. (CCFI) are the petitioners.
• Respondents include Simeona Castillo, Lorenzo Perlas, Jessielyn Castillo, Luis Maesa, Rolando Batiquin, and Bukluran Magsasaka ng Tibig.
• The dispute involves the conversion of 221.3048 hectares of land in Barangay Tibig, Silang, Cavite.
• Originally owned by CCFI, the land was mortgaged to Manila Banking Corporation (MBC).
• MBC went into receivership in 1987, and the land was foreclosed in 1991.
• CCFI sold the land to ALI in 1995, with conditions for conversion to non-agricultural use.
• The Department of Agrarian Reform (DAR) issued a Notice of Coverage in 1989, placing the land under the Comprehensive Agrarian Reform Law (CARL).
• Despite this, DAR Secretary Ernesto Garilao approved the conversion in 1997.
• Respondents, representing tenant-farmers, filed a petition for revocation of the conversion order in 2000, citing misrepresentation and non-compliance.
• DAR Secretary Horacio Morales revoked the conversion order in 2000, but Secretary Hernani Braganza reversed this in 2002.
• The Office of the President (OP) upheld the conversion in 2004.
• Respondents appealed to the Court of Appeals (CA), which reversed the OP's decision in 2007.
• ALI and CCFI filed a petition for review on certiorari.

Issue:

• (Unlock)

Ruling:

1. Yes, the Court of Appeals erred in resolving an issue raised for the first time on appeal.
2. No, the rule that a prior Notice of Acquisition bars the issuance of a Conversion Order is not merely a guiding principle.
3. Yes, respondents are barred from appealing the Conversion Order long after it has attained finality.
4. Yes, the conversion and/or reclassification of the said lands has become an operative ...(Unlock)

Ratio:

1. New Issue on Appeal:

   • The issue of the Notice of Acquisition was raised for the first time on appeal before the CA, which is procedurally improper.
   • The DAR and the OP did not have the opportunity to address this issue.
   • The CA's decision to entertain this new issue violated principles of due process and fair play.

2. Guiding Principle:

   • The provision in DAR Administrative Order No. 12-94, stating that a prior Notice of Acquisition bars the issuance of a Conversion Order, is not an absolute prohibition but a guiding principle.
   • The DAR Secretary has the authority to balance this principle against other considerations, such as economic feasibility and community needs.
   • The CA erred in treating this principle as an absolute bar to conversion.

3. Finality of Conversion Order:

   • The Conversion Order issued by Secretary Garilao in 1997 had long attained finality and could no longer be questioned.
   • The respondents' petition for revocation was filed almost three years after the issuance of the Conversion Order, beyond the one-year prescriptive period in DAR Administrative Order No. 1, Series of 1999.
   • The principle of finality of judgments applies, and the Conversion Order cannot be repeatedly assailed.

4. Operative Fact Doctrine:

   • The conversion and/or reclassification of the lands had become an operative fact.
   • V...continue reading