G.R. No. 188299 - Heirs of Luna vs. Afable

Petitioners are the co-owners of a parcel of land in Barangay Guinobatan, Calapan City, Oriental Mindoro, covered by Transfer Certificate of Title (TCT) No. J-7205 with a total area of 158.77 hectares.
Of the total area, 100.2856 hectares were subjected to compulsory acquisition under the Comprehensive Agrarian Reform Program (CARP) via a Notice of Land Valuation and Acquisition issued on 20 August 1998.

Prior to the effectivity of the Comprehensive Agrarian Reform Law (CARL) on 15 June 1988, the land was purportedly reclassified from agricultural to non-agricultural use through Municipal Ordinance No. 21 (series of 1981) enacted by the Sangguniang Bayan of Calapan.
Petitioners, asserting that the reclassification placed the land in the light intensity industrial zone and hence outside the coverage of CARP, filed before the Department of Agrarian Reform Adjudication Board (DARAB) for cancellation of the Certificates of Land Ownership Award (CLOAs) and declaration of exemption.

On 26 August 1999, the DARAB Calapan City ruled in favor of petitioners by canceling the CLOAs and affirming the land’s classification as non-agricultural, citing that the reclassification under the 1981 ordinance removed the land from CARP’s ambit.
Respondents, identified as qualified farmer-beneficiaries and subsequent titleholders under the CLOAs, appealed the ruling. The DARAB Central Office found that the local adjudicator’s reliance on the reclassification was premature, holding that an exemption clearance from the Department of Agrarian Reform (DAR) was still required.

In response, petitioners filed an application for exemption from CARP coverage, which was granted on 16 December 2003 by then DAR Secretary Pagdanganan based on joint ocular inspections, certifications from the Office of the Deputized Zoning Administrator and the Housing and Urban Development Coordinating Council (HUDCC), and clear evidence that the land had been reclassified as light-industrial prior to CARL’s effectivity.
Respondents filed motions for reconsideration.

On 15 June 2004, DAR OIC-Secretary Ponce granted a motion for reconsideration based on findings that only a limited portion (as per the 1981 ordinance’s reference points) had been reclassified.
On 21 June 2006, then DAR OIC-Secretary Pangandaman reaffirmed that the land had not been categorically reclassified and leaned on physical evidence (e.g., cultivation of rice, irrigation, and surrounding agricultural areas) to oppose the exemption.

Petitioners then filed their own motion for reconsideration to challenge these conflicting findings.

The Office of the President, in its Decision dated 15 December 2006, found petitioners’ appeal impressed with merit. It reversed the reconsideration orders and reinstated the original 16 December 2003 exemption order by Secretary Pagdanganan.
The decision was based on corroborative evidence, including zoning certifications declaring the property as situated within a light intensity industrial zone and the fact that the reclassification had taken place well before the compulsory acquisition under CARP.

Respondents appealed the Office of the President’s decision to the Court of Appeals (CA), which on 13 March 2009 ruled that the land did not fall within the reclassified non-agricultural zone since, according to the CA, the 1981 ordinance only limited reclassification to a certain portion of the property.
The CA held that because the reclassification declaring the land as non-agricultural was not uniformly applied prior to 15 June 1988, the property remained subject to CARP coverage.
The Supreme Court, upon review of conflicting factual findings from the DAR, the Office of the President, and the CA, re-examined the evidence—particularly the certifications and technical determinations from the zoning administrator and HUDCC—and ultimately granted the petition, reversing the CA decision and reinstating the pre-CARP exemption order.

Whether the power of local government to reclassify agricultural land to non-agricultural use prior to the effectivity of the Comprehensive Agrarian Reform Law (CARL) is absolute and does not require DAR approval.
Whether petitioners’ land, allegedly reclassified as situated within a light intensity industrial zone pursuant to Municipal Ordinance No. 21 (series of 1981), is indeed exempt from the coverage of the CARP.
How conflicting findings—between the local DARAB office, the DAR Central Office, the Office of the President, and the Court of Appeals—should be resolved, especially when certifications from the appropriate zoning authorities indicate a pre-CARL reclassification.