Facts:

The case involves a dispute between petitioners Nelita M. Bacaling, represented by her attorney-in-fact Jose Juan Tong, and respondents Felomino Muya, Crispin Amor, Wilfredo Jereza, Rodolfo Lazarte, and Nemesio Tonocante. The events leading to the case began in 1955 when Nelita and her husband Ramon Bacaling owned three parcels of land totaling 9.9631 hectares in Barangay Cubay, Jaro, Iloilo City, covered by Transfer Certificates of Title Nos. T-5801, T-5833, and T-5834. The land was subdivided into 110 sub-lots, approved for residential development by the National Urban Planning Commission (NUPC) and the Bureau of Lands. In 1957, the Bacalings secured a loan of P600,000 from the Government Service Insurance System (GSIS) for subdivision development, which was secured by a mortgage on the land. However, they defaulted on the loan, leading to foreclosure by GSIS. After a lengthy legal battle, Nelita Bacaling regained ownership of the sub-lots in 1989.

In the meantime, from 1...

Facts:

1. Ownership and Subdivision of Land

   • Petitioners Nelita M. Bacaling and her spouse Ramon Bacaling owned three parcels of land in Barangay Cubay, Jaro, Iloilo City, with a total area of 9.9631 hectares. These lots were subdivided into 110 sub-lots in 1955, covered by Transfer Certificates of Title (TCT) Nos. T-10664 to T-10773.
   • The National Urban Planning Commission (NUPC) and the Bureau of Lands approved the subdivision plan in 1955, classifying the lots as residential for the development of a low-cost residential community, known as the Bacaling-Moreno Subdivision.

2. Loan and Mortgage

   • In 1957, the Bacalings secured a P600,000 real estate loan from the Government Service Insurance System (GSIS) to develop the subdivision. Only P240,000 was released.
   • The Bacalings failed to pay the loan, leading to the foreclosure of the mortgaged lots by GSIS. After a legal battle, Nelita Bacaling regained ownership of the lots in 1989.

3. Occupation by Respondents

   • In 1972, respondents Felomino Muya, Crispin Amor, Wilfredo Jereza, Rodolfo Lazarte, and Nemesio Tonocante occupied the 110 sub-lots, claiming to be tenant-tillers. They altered the roads, drainage, and boundaries of the lots.
   • Respondents argued that they were legally instituted as tenants by Bacaling in 1964 and later became leaseholders in 1974. They also claimed to have received Certificates of Land Transfer (CLTs) in 1980 under the agrarian reform program.

4. Zoning and Sale of Lots

   • In 1977, the Iloilo City Council enacted Zoning Ordinance No. 212, declaring the lots as residential.
   • In 1990, Nelita Bacaling sold the 110 sub-lots to petitioner Jose Juan Tong and others for P1.7 million. Tong was appointed as Bacaling’s attorney-in-fact to handle legal matters related to the lots.

5. Legal Proceedings

   • Bacaling and Tong filed a petition with the Department of Agrarian Reform (DAR) to cancel the CLTs issued to respondents. The DAR dismissed the petition, ruling that the lots were not validly converted to residential use before the effectivity of P.D. No. 27 (Operation Land Transfer) in 1972.
   • The Office of the President (OP) reversed the DAR’s decision, declaring the lots exempt from agrarian reform coverage. However, the Court of Appeals (CA) reinstated the DAR’s decision, validating the CLTs issued to respondents.

Issue:

1. Does petitioner Jose Juan Tong have the requisite interest to litigate this petition?
2. Are the respondents bona fide agricultural lessees entitled to the benefits of agrarian reform laws?
3. Are the 110 sub-lots, classified as residential prior to October 21, 1972, covered by Operation Land Transfer under P.D. No. 27?

Ruling:

1. Petitioner Tong’s Interest to Litigate

   • The Supreme Court ruled that Jose Juan Tong has material interest to pursue the petition. As the buyer of the 110 sub-lots and Bacaling’s attorney-in-fact, Tong stands to benefit or be injured by the judgment. Bacaling’s attempt to revoke the irrevocable special power of attorney was dismissed, as the agency was coupled with interest and could not be unilaterally revoked.

2. Respondents’ Status as Agricultural Lessees

   • The Court held that respondents were not bona fide agricultural lessees. The land was owned by GSIS from 1961 to 1989 due to foreclosure, and there was no evidence that GSIS consented to the tenancy relationship or received a share of the harvest. Bacaling also consistently disclaimed respondents as tenants.

3. Classification of the 110 Sub-Lots

   • The Court ruled that the 110 sub-lots were classified as residential as early as 1955 by the NUPC and the Bureau of Lands. The lots were intended for residential development, as evidenced by the GSIS loan, subdivision plan, and zoning ordinance. The CLTs issued to respondents were declared void ab initio, as the lots were not agricultural and thus exempt from agrarian reform coverage.

Ratio:

• (Unlock)