G.R. No. 224831 - Garcia vs. Santos Ventura Hocorma Foundation, Inc.

Respondent Santos Ventura Hocorma Foundation, Inc. (SVHFI) is the registered owner of a parcel of land covering 25.5699 hectares, evidenced by Transfer Certificate of Title (TCT) No. 549661-R, located in Barangay Cacutud (formerly Mamatitang), Mabalacat, Pampanga.
Petitioners Orlando D. Garcia, Amado Q. Calalang, Fernando Q. Calalang, and Bonifacio Q. Calalang are identified as farmer-beneficiaries under the Comprehensive Agrarian Reform Program (CARP). Their awards are evidenced by various Certificates of Land Ownership Award (CLOA) numbers and corresponding lot descriptions (e.g., lots 12, 16, 17, 20, 21, and 22) situated in Barangay Catutud, Mabalacat, Pampanga.

On September 20, 2002, the Municipal Agrarian Reform Office (MARO) of Mabalacat issued a Notice of Coverage and conducted a Field Investigation on SVHFI’s property, identifying it as a suitable lot for CARP under the compulsory acquisition scheme.
SVHFI, through its attorney-in-fact, filed a letter-protest on November 14, 2002, contesting the coverage on several grounds:

Asserting its absolute registered ownership;
Highlighting the property’s vulnerability due to its proximity to a river, exposure to lahar, erosion, and flooding risks;
Claiming that valuation challenges, especially related to Land Bank of the Philippines’ (LBP) handling, would result in damages; and
Arguing that subjecting the property to CARP was unconstitutional, contrary to law, morals, and public policy.

Additionally, a subsequent letter dated January 22, 2005, was sent by SVHFI requesting the lifting of CARP coverage and the disqualification of the identified beneficiaries.

Documentation of the claim folder was submitted to the LBP on February 24, 2004, prompting a Memorandum of Valuation (April 22, 2004) and later, a Certification (April 20, 2005) that the bank had deposited compensation for 21.4240 hectares of the property.
In July 2005, CLOAs covering 6.4515 hectares, part of the subject property, were registered and distributed to the petitioners, even as subsequent records revealed that SVHFI had sold the land to the Bases Conversion Development Authority (BCDA) two years after the initial Notice of Coverage.

On January 16, 2006, DAR Officer-in-Charge Regional Director Teofilo Q. Inocencio issued an Order denying SVHFI’s protest, affirming that the land was agricultural and within CARP coverage.
The Regional Director further held that the sale of the land to BCDA executed without DAR clearance indicated bad faith and was prejudicial to the farmer-beneficiaries’ rights.
SVHFI filed a motion for reconsideration alleging that the property was no longer devoted to agricultural use (citing the construction of the Subic-Clark-Tarlac Expressway), but on September 5, 2006, the Order of January 16, 2006 was still affirmed.
An Order of Finality was issued on November 20, 2006, as no party filed an appeal within the reglementary period.

In 2007, petitioners filed a protest/petition before the DAR Center for Land Use Policy, Planning, and Implementation (DAR-CLUPPI) on June 28, 2007.
Respondent SVHFI, on July 18, 2007, filed its Sworn Application for Exemption Clearance, later supplemented by a Comment on August 6, 2007, invoking Department of Justice (DOJ) Opinion No. 44, Series of 1991.
On December 10, 2007, the then DAR Secretary issued an Order granting the exemption clearance on the basis that the subject property had been reclassified to non-agricultural use (residential and commercial) prior to June 15, 1988.
Petitioners challenged this ruling by filing two separate motions for reconsideration (January 31, 2008 and February 21, 2008) and a Manifestation on November 10, 2008, all seeking to overturn the Order. The DAR Secretary, however, reaffirmed the grant of exemption in orders dated August 29, 2008 and May 13, 2009.

Dissatisfied with the administrative rulings, petitioners escalated the matter by filing an appeal with the Office of the President (OP), which, on December 17, 2013, denied their appeal, upholding the decisions of the DAR Secretary.
The Court of Appeals, through its Decision on May 23, 2016, affirmed the exemption of the property from CARP coverage and held that the issuance of the CLOAs to petitioners was erroneous.
Ultimately, petitioners raised the issue before this Court via a petition for review on certiorari under Rule 45 of the Rules of Court.

Whether the subject property owned by SVHFI was properly exempted from CARP coverage based on its reclassification to non-agricultural use prior to June 15, 1988.
Whether the issuance of the CLOAs to the petitioners, as beneficiaries under CARP, confers valid rights to the land given the eventual finding of exemption.
Whether due process was observed in the proceedings, particularly with respect to the timing of SVHFI’s application for exemption and the subsequent handling of the protest and motions for reconsideration by the petitioners.
Whether the administrative findings, including the technical determination by the DAR Secretary and corroborative evidence (e.g., HLURB and MPDO certifications, ocular inspection by CLUPPI), justify the exclusion of the subject property from the ambit of agrarian reform.