G.R. No. 131457 - Fortich vs. Corona

Case Summary (G.R. No. 131457)

Factual Background: The 144-Hectare Property and Earlier DAR Actions

The land was owned by NQSRMDC and was covered by TCT No. 14371 in the Registry of Deeds of Bukidnon. In 1984, the property was leased for pineapple production to Philippine Packing Corporation, later Del Monte Philippines, Inc. (DMPI), under a Crop Producer and Growers Agreement duly annotated on the title for a ten (10)-year term, which expired in April 1994.

During the lease, the DAR placed the entire property under compulsory acquisition and assessed the land value at P 2.38 million, prompting resistance by NQSRMDC. In DARAB Case No. X-576, the DAR Adjudication Board, through its Provincial Agrarian Reform Adjudicator, granted in February 1992 a writ of prohibition with preliminary injunction, ordering DAR officials and the Land Bank of the Philippines to desist from activity concerning the land until further orders. Despite the DARAB order dated March 31, 1992, the DAR Regional Director issued a memorandum dated May 21, 1992 directing the Land Bank to open a trust account and conduct summary proceedings on just compensation. NQSRMDC sought judicial enforcement of the DARAB injunction, and on October 22, 1992, the DARAB ordered compliance with the March 31, 1992 order, nullified the May 21, 1992 memorandum and the summary valuation proceedings, and directed the return of the claim folder to the DAR until further orders. The Land Bank cancelled the trust account it had opened.

Meanwhile, local government actions and agrarian-reform policy intersected with the conversion issue. The Provincial Development Council of Bukidnon, headed by Governor Fortich, adopted Resolution No. 6 on January 7, 1993, designating certain areas along the Bukidnon-Sayre Highway as Bukidnon Agro-Industrial Zones, within which the subject property was situated.

Local Government Conversion Proceedings and the DAR Secretary’s Denial

The Office of the President later recounted that pursuant to Section 20 of R.A. No. 7160 (Local Government Code), the Sangguniang Bayan of Sumilao enacted Ordinance No. 24 on March 4, 1993, converting or reclassifying 144 hectares from agricultural to industrial/institutional use to attract investors and generate employment. The Bukidnon Provincial Land Use Committee approved the ordinance on October 12, 1993, and an application for conversion was filed on December 11, 1993 by a proponent on behalf of NQSRMDC/BAIDA. The Bukidnon Provincial Board approved the ordinance as Resolution No. 94-95 on February 1, 1994, and the OP decision described the planned agro-industrial components, including educational and agribusiness institutions, industrial processing and commercial facilities, forestry/open spaces, and support facilities such as a hotel and housing.

Despite multiple favorable recommendations from government entities and issuance of an Environmental Compliance Certificate, the DAR, invoking conversion authority under Section 65 of R.A. No. 6657, denied the conversion application by an order dated November 14, 1994 issued by DAR Secretary Garilao. The denial rested on grounds that: the land was considered prime agricultural with irrigation facility; it was covered by a Notice of Compulsory Acquisition (NCA); policy on withdrawal or lifting of NCA was inapplicable; there was no clear and tangible compensation package for alleged beneficiaries; and the identification and reclassification procedures lacked reference to certain policy instruments. The denial was upheld when NQSRMDC’s motion for reconsideration was denied by order dated June 7, 1995. Governor Fortich then appealed to the OP, seeking conversion/reclassification.

The Office of the President’s March 29, 1996 Decision

To prevent enforcement of the DAR Secretary’s denial order, NQSRMDC filed in the Court of Appeals a petition for certiorari and prohibition with preliminary injunction, docketed as CA-G.R. SP No. 37614. On October 23, 1995, the Court of Appeals issued a resolution ordering the parties to maintain status quo. During proceedings, DAR indicated it was processing farmers’ applications and agreed to respect status quo.

The OP, through then Executive Secretary Ruben D. Torres, resolved Governor Fortich’s appeal in OP Case No. 96-C-6424. In its Decision dated March 29, 1996, the OP reversed the DAR Secretary’s denial. The OP found that converting the land would open opportunities for employment and development. It also rejected DAR’s irrigation ground by explaining that any irrigation facility merely passed through the property as a right of way to irrigate lower ricelands; the land itself had been planted with pineapple by DMPI for years and was not irrigated.

On the NCA and related policy arguments, the OP noted that the NCA had been declared null and void by the DARAB as early as March 1, 1992. Central to the OP’s reversal was the view that under Section 8 of R.A. No. 6657, the subject property could not be validly subjected to compulsory acquisition until after the expiration of the lease contract with DMPI in April 1994 or the lease’s end. The OP thus treated the DARAB’s reasoning as correct and ordered DAR and Land Bank to desist from pursuing activities covering NQSRMDC’s land.

The OP additionally grounded its ruling in local autonomy under Section 20 of R.A. No. 7160, holding that the law granted local government units autonomy in converting portions of agricultural lands and providing their utilization and disposition. The OP therefore set aside the DAR Secretary’s November 14, 1994 order and approved the conversion application of NQSRMDC/BAIDA.

After DAR filed a motion for reconsideration on May 20, 1996, the decision remained undisturbed. In compliance with the OP decision, NQSRMDC and DECS executed on September 11, 1996 a memorandum of agreement in which NQSRMDC donated four (4) hectares to DECS for a high school. When NQSRMDC sought to transfer title over the donated portion, it discovered that its title no longer bore its name, because DAR had cancelled it without payment of just compensation on August 11, 1995 and transferred it in the Republic’s name under a new title. DAR then caused issuance of CLOAs in favor of one hundred thirty-seven (137) farmer-beneficiaries, registered under a corresponding title.

Finality of the March 29, 1996 Decision and the June 23, 1997 Denial

With the issuance of CLOAs and the transfer of title, NQSRMDC filed on April 10, 1997 a complaint before the Regional Trial Court of Malaybalay, Bukidnon (Branch 9), docketed as Civil Case No. 2687-97, seeking annulment and cancellation of title, damages, and injunction against DAR and numerous others. The RTC issued a Temporary Restraining Order on April 30, 1997 and a Writ of Preliminary Injunction on May 19, 1997, restraining DAR and others from taking possession of the land.

In the OP case, a significant procedural event occurred on June 23, 1997, when the then Executive Secretary Ruben D. Torres denied DAR’s motion for reconsideration because it was filed beyond the fifteen (15)-day reglementary period. The order declared that the March 29, 1996 OP decision had already become final and executory. DAR then filed a second motion for reconsideration on July 11, 1997, which the petitioners later described as the procedural predicate for the Win-Win Resolution issued in November 1997.

The Hunger Strike, the Memorandum in Intervention, and the Win-Win Resolution

The national dispute became public when alleged beneficiaries staged a hunger strike in front of the DAR compound in Quezon City on October 9, 1997, protesting the March 29, 1996 OP decision. On October 10, 1997, persons claiming to be farmer-beneficiaries filed a Memorandum in Intervention in OP Case No. 96-C-6424 requesting that the OP decision allowing conversion of the entire 144-hectare property be set aside.

President Fidel V. Ramos held a dialogue with the strikers and promised resolution within the framework of law, creating an eight (8)-man Fact Finding Task Force (FFTF) chaired by Agriculture Secretary Salvador Escudero to look into the controversy and recommend solutions. On November 7, 1997, the OP issued the Win/Win Resolution authored by then Deputy Executive Secretary Renato C. Corona. The Win-Win Resolution modified the March 29, 1996 decision by approving conversion only for an approximately forty-four (44) hectare portion adjacent to the highway, as recommended by the Department of Agriculture. It further directed that the remaining approximately one hundred (100) hectares, traversed by an irrigation canal and suitable for agriculture, be distributed to qualified farmer-beneficiaries under R.A. No. 6657, with a right of way to the highway frontage. It ordered DAR and concerned agencies to conduct segregation surveys, valuation, and title generation in the names of identified beneficiaries, and directed DAR to determine qualified beneficiaries and to expedite payment of just compensation to NQSRMDC for the portion to be covered by CARP, including other lands previously surrendered. It also directed the Philippine National Police to render full assistance in implementation.

On procedural context, the OP noted the memorandum in intervention filed by 113 farmers but expressly stated that it did not rule on its propriety or merits at that stage because it considered the resolution unnecessary to address it.

Copies of the Win-Win Resolution were received by Fortich, Baula, and NQSRMDC on November 24, 1997. On December 4, 1997, they filed the present petition for certiorari, prohibition under Rule 65 with injunction and urgent relief under Rule 58, seeking to nullify the Win-Win Resolution and to enjoin DAR from implementing it.

The Parties’ Contentions and Preliminary Issues

NQSRMDC and the local officials alleged that the OP issued the Win-Win Resolution due to pressure from a hunger strike allegedly led by fake farmer-beneficiary Linda Ligmon, arguing that the resolution was political and that it revived and modified

Case Syllabus (G.R. No. 131457)

The petitioners were Hon. Carlos O. Fortich, Hon. Rey B. Baula, and NQSR Management and Development Corporation (NQSRMDC), who challenged a presidential issuance known as the Win-Win Resolution.
The respondents were Hon. Renato C. Corona, Hon. Ernesto D. Garilao, and the Department of Agrarian Reform (DAR), who defended the assailed modification of an earlier Office of the President ruling.
The dispute arose from the Office of the President’s reversal, finality, and subsequent modification of an earlier OP Decision approving the conversion of a one hundred forty-four (144)-hectare landholding.
The petitioners sought Rule 65 relief by petition for certiorari, prohibition, and injunction with urgent prayer for provisional relief.
The Court resolved preliminary matters on remedy, intervention, and forum shopping before ruling on the principal issue of the legal effect of the Win-Win Resolution on a final and executory OP Decision.
The Court granted the petition, nullified and set aside the Win-Win Resolution, and denied intervention.

Core factual setting

The controversy involved a 144-hectare property in San Vicente, Sumilao, Bukidnon, covered by Transfer Certificate of Title No. 14371 in the name of NQSRMDC.
The land had been leased in 1984 as a pineapple plantation to Del Monte Philippines, Inc. (DMPI) under a Crop Producer and Growers Agreement, with the lease expiring in April 1994.
During the lease, in October 1991, the DAR placed the entire property under compulsory acquisition and assessed its value at P 2.38 million.
NQSRMDC resisted the DAR action and obtained from the DAR Adjudication Board (DARAB) a writ of prohibition with preliminary injunction in DARAB Case No. X-576, ordering the DAR and related offices to desist from activities involving the land.
Despite the DARAB order of March 31, 1992, the DAR Regional Director issued a memorandum directing Land Bank to open a trust account and conduct summary proceedings on just compensation, which NQSRMDC challenged.
The DARAB later acted favorably, nullifying the memorandum and summary proceedings and directing return of the claim folder to the DAR.
Meanwhile, the Provincial Development Council of Bukidnon, headed by petitioner Fortich, passed Resolution No. 6 designating areas along the Bukidnon–Sayre Highway, including the subject property, as Bukidnon Agro-Industrial Zones.
The local government instruments supporting conversion included Sangguniang Bayan Ordinance No. 24 converting 144 hectares from agricultural to industrial/institutional use under Section 20 of R.A. No. 7160, later approved through provincial land use processes and docketed as Resolution No. 94-95.
The conversion project components described in the OP’s 1996 decision included educational and research facilities, industrial processing areas, forest development, and support facilities such as a hotel and housing project.
Several government agencies recommended the conversion, including the Department of Trade and Industry, the Provincial Development Council, the DAR offices, and the DENR through an Environmental Compliance Certificate, while irrigation entities interposed no objections on stated conditions.
Notwithstanding the foregoing, the DAR Secretary denied the conversion application in November 1994, invoked Section 65 of R.A. No. 6657, and directed CARP coverage and distribution to qualified beneficiaries.
Governor Fortich appealed the denial to the Office of the President, leading to the OP Decision dated March 29, 1996 by then Executive Secretary Ruben D. Torres.

OP Decision of March 29, 1996

The March 29, 1996 OP Decision reversed the DAR Secretary’s denial and set aside the DAR order denying conversion.
The OP Decision approved conversion, reasoning that conversion would open employment opportunities and advance development in the municipality.
The OP Decision rejected DAR’s findings that the area was irrigated, explaining that any irrigation facility merely passed through the property as a right of way, and that the land was not irrigated because it had been planted with pineapple by DMPI.
The OP Decision treated the claim that the land had long been covered by a Notice of Compulsory Acquisition (NCA) as unpersuasive because the NCA was already declared null and void by the DARAB as early as March 1, 1992.
The OP Decision also emphasized that the DAR could not validly pursue compulsory acquisition until after the expiration of the lease, citing Section 8 of R.A. No. 6657 as a controlling legal bar.
The OP Decision further relied on the principle that procedural lapses should not defeat the law’s purpose of granting local government autonomy under Section 20 of R.A. No. 7160.
The dispositive portion of the OP Decision approved the application for conversion of NQSRMDC/BAIDA after it set aside the DAR Secretary’s November 14, 1994 order.

Finality and the June 23, 1997 order

The DAR filed a motion for reconsideration on May 20, 1996, but the OP later issued an order denying DAR reconsideration on June 23, 1997.
The June 23, 1997 order denied the motion for having been filed beyond the fifteen (15)-day reglementary period.
The June 23, 1997 order declared the March 29, 1996 OP Decision to have become final and executory.
After the June 23, 1997 declaration of finality, DAR filed a second motion for reconsideration, which later became the basis for the subsequent presidential issuance.

Petitioners’ subsequent conflict and actions

After compliance with the OP Decision’s approval of conversion, NQSRMDC executed a Memorandum of Agreement in September 11, 1996 donating four (4) hectares to DECS for a high school.
When NQSRMDC later sought to transfer the title over the four-hectare portion, it discovered that the title over the entire subject land was no longer in its name.
During the pendency of the petition and appeal, DAR canceled NQSRMDC’s title without payment of just compensation and transferred the property to the Republic of the Philippines under TCT No. T-50264.
DAR then caused issuance of CLOA to one hundred thirty-seven (137) farmer-beneficiaries under TCT No. AT-3536.
On April 10, 1997, NQSRMDC filed in the RTC of Malaybalay, Bukidnon (Branch 9) a complaint for annulment and cancellation of title, damages, and injunction.
The RTC issued a Temporary Restraining Order on April 30, 1997 and a Writ of Preliminary Injunction on May 19, 1997, restraining DAR and others from taking possession of the land from NQSRMDC.
Some alleged farmers challenged the RTC injunction in the Court of Appeals through CA-G.R. SP No. 44905, seeking its lifting an