G.R. No. 205618 - Marcelo vs. Samahang Magsasaka ng Barangay San Mariano

Case Summary (G.R. No. 205618)

Properties Involved

The subject parcels are evidenced by multiple Transfer Certificates of Title (TCTs), aggregating 114.7030 hectares: individual lots identified under various TCT numbers (NT‑47472, NT‑47473, NT‑216355) with registration dates in 1963 and one in 1991. The landholdings include a large parcel (92.1943 ha) under TCT No. NT‑216355 and other smaller lots.

Early Transactions and Notices

Petitioners originally executed a Voluntary Offer to Sell (VOS) to the government on March 14, 1989 for redistribution under the Comprehensive Agrarian Reform Program (CARP). Notices of Coverage under compulsory acquisition were issued in 1991. Petitioners withdrew their VOS on July 3, 1997 and continued development. A subsequent Notice of Coverage was served March 15, 2000; DAR identified eighty‑one farmer‑beneficiaries, Landbank prepared memoranda of valuation on portions of the parcels, and Collective Certificates of Land Ownership Award (CLOAs) were issued to beneficiaries.

DARAB Proceeding and Ruling

Petitioners sought cancellation of the CLOAs before the DAR Adjudication Board (DARAB), Region III, claiming the properties were residential, citing a 1977 National Housing Authority (NHA) certificate of registration and license to sell and 2004 tax receipts. DARAB, Region III found the properties residential and held the CLOAs fatally infirm (not signed by the DAR Secretary), ordered their recall and cancellation, and enjoined the private respondents from entering the property.

Administrative Route to Exemption

While the DARAB appeal was pending, petitioners filed a Petition for Non‑coverage with the DAR Regional Office on April 8, 2005, asserting the lands were not agricultural. The DAR Regional Office treated the proper remedy as an application for exemption and, by Order dated November 17, 2005, directed petitioners to file an application for exemption with the DAR Secretary pursuant to applicable DAR administrative rules.

Application for Exemption and Supporting Documents

On April 11, 2006 petitioners filed a sworn application for exemption under DAR A.O. No. 04, series of 2003, submitting numerous documents including: various HLURB certifications (one recognizing an NHA certificate), an HLURB certification attesting reclassification as residential prior to June 15, 1988, an NHA certificate of registration and license to sell for “Celia Subdivision,” a Municipal Planning and Development Coordinator (MPDC) certification, Sangguniang Bayan Resolution No. 2006‑004 ratifying Celia Subdivision as urban/residential, Department of Agriculture and NIA certifications on agricultural suitability/irrigation, MARO and PARO certifications of untenanted status, affidavits of undertaking, photos and maps.

Opposition and Conflicting HLURB Certifications

Respondent Samahang Magsasaka opposed the application, asserting lack of HLURB‑approved zoning prior to June 15, 1988 and alleging misrepresentation regarding the NHA certificate. The HLURB issued a certification (August 15, 2006) stating the NHA certificate and license covered only 66,375 square meters comprising specific lots different from those applied for exemption. Petitioners submitted an affidavit from a retired MPDC asserting the lands were within residential area.

DAR Secretary’s Order Denying Exemption

Based principally on the HLURB certification of August 15, 2006 and the CLUPPI recommendation, the DAR Secretary denied the application for exemption by Order dated March 21, 2007, and directed agrarian documentation and distribution to qualified beneficiaries. Petitioners’ motion for reconsideration was denied on February 4, 2008 after the HLURB issued conflicting certifications (including one dated April 25, 2007 that nullified prior inconsistent HLURB issuances).

Office of the President Reversal

Petitioners appealed to the Office of the President (OP). In a Decision dated March 1, 2010, the OP reversed the DAR Secretary’s Orders and granted exemption, reasoning that the HLURB August 15, 2006 certification was not conclusive, giving weight instead to Sangguniang Bayan Resolution No. 2006‑004, CLUPPI field inspection findings, MARO/PARO/NIA/DA certifications, and DARAB observations. The OP denied reconsideration on May 27, 2010.

Court of Appeals Ruling

The Court of Appeals (CA) limited the issue to whether the properties were classified as residential prior to June 15, 1988. The CA found material discrepancies in petitioners’ documentary evidence: conflicting HLURB certifications, questions about the authenticity and scope of Sangguniang Bayan Resolution No. 2006‑004 (the municipal council later issued a certification denying its existence or indicating a resolution with the same number concerned riprapping), and an MPDC certification stating no record of classification prior to June 15, 1988 and that the 2002 comprehensive land use plan classified the parcels as agricultural. The CA concluded petitioners failed to prove exemption and reinstated the DAR Secretary’s March 21, 2007 Order.

Issues on Appeal to the Supreme Court

Petitioners raised two principal issues: (I) that the CA erred in finding discrepancies and inconsistencies in petitioners’ documentary evidence; and (II) that the CA erred in sustaining respondents’ contention that the land remained agricultural despite substantial evidence to the contrary. Respondents contended the petition raised factual issues inappropriate for certiorari review.

Applicable Law and Constitutional Basis

The Court applied the 1987 Philippine Constitution regime and the statutory and regulatory framework governing CARP. Republic Act No. 6657 (CARL) took effect June 15, 1988; it covers “all public and private agricultural lands” and excludes lands classified as residential, commercial, industrial, mineral or forest. Relevant administrative and legal authorities include DAR A.O. No. 01 (1990), DOJ Opinion No. 044 (1990), DAR A.O. No. 06 (1994), DAR A.O. No. 04 (2003), and jurisprudence (e.g., Natalia Realty, Buklod Nang Magbubukid, Ong v. Imperial, Heirs of Luis A. Luna) clarifying that exemption requires valid reclassification by an authorized agency prior to June 15, 1988. The applicant bears the burden of proving exemption.

Documentary Requirements and Evidentiary Weight

DAR A.O. No. 04 (2003) prescribes documentary requirements for exemption applications, notably an HLURB certification on the approved comprehensive land use plan and zoning ordinance (including HLURB approval date) and other local certifications. The Court emphasized established precedent that certification by HLURB and the deputized zoning administrator are among the most important items of proof in exemption proceedings.

Supreme Court’s Analysis of Petitioners’ Evidence — NHA Certificate

The Court found uncontroverted evidence that the NHA certificate of registration and license to sell relied upon by petitioners covered different lots and a significantly smaller area (66,375 square meters) than the subject landholdings. Petitioners failed to produce an NHA‑approved subdivision plan or conclusive proof that the NHA registration and license embraced the subject parcels, undermining reliance on the NHA documents as proof of pre‑1988 reclassification.

Supreme Court’s Analysis — Sangguniang Bayan Resolution and MPDC Evidence

Sangguniang Bayan Resolution No. 2006‑004 was held not to be a zoning ordinance or a comprehensive

Case Syllabus (G.R. No. 205618)

Case Caption and Procedural Posture

Case decided by the Supreme Court, Second Division, G.R. No. 205618, September 16, 2019; reported at 863 Phil. 49; 116 OG No. 50, 8301 (December 14, 2020).
Petition for Review under Rule 45 by petitioners, seeking review of Court of Appeals (CA) Decision dated June 28, 2012 and Resolution dated February 4, 2013 which reversed the Office of the President (OP) decision and reinstated the Department of Agrarian Reform (DAR) Secretary’s order denying exemption from CARL.
Case originated from: DAR Secretary’s denial of exemption (Orders dated March 21, 2007 and February 4, 2008) → Office of the President (OP) reversal and grant of exemption (Decision dated March 1, 2010; reconsideration denied May 27, 2010) → Court of Appeals reversal reinstating DAR Secretary (Decision dated June 28, 2012; Resolution dated February 4, 2013) → Supreme Court petition under Rule 45.
Petitioners raised two primary issues before the Supreme Court challenging the CA’s factual determinations and its acceptance of respondents’ evidence.

Parties and Subject Properties

Petitioners: Elfleda, Albert, Napoleon, Eden, Severiano, Celia and Leo Marcelo (collectively), represented by spouses Severino [deceased] and Celia C. Marcelo.
Respondent: Samahang Magsasaka ng Barangay San Mariano, represented by Godofredo Ermita.
Subject parcels: Located in Barangay San Mariano, Municipality of San Antonio, Nueva Ecija, with total area of 114.7030 hectares, registered under several TCTs:
- TCT NT-47472, Lot No. 3346, 0.1675 ha, registered Aug. 2, 1963
- TCT NT-47472, Lot No. 3340, 8.9955 ha, registered Aug. 2, 1963
- TCT NT-47473, Lot No. 1222, 11.9882 ha, registered Aug. 2, 1963
- TCT NT-47473, Lot No. 3345, 1.3080 ha, registered Aug. 2, 1963
- TCT NT-47473, Lot No. 3344, 0.0495 ha, registered Aug. 2, 1963
- TCT NT-216355, Lot No. 1-I, 92.1943 ha, registered Mar. 14, 1991
The parties and issues concern whether these titled landholdings are exempt from coverage by R.A. No. 6657 (Comprehensive Agrarian Reform Law, CARL) because they were reclassified as residential prior to June 15, 1988.

Factual Background (chronology of material events)

March 14, 1989: Petitioners voluntarily offered to sell these properties to the government for redistribution under CARP.
Notices of Coverage under Compulsory Acquisition sent Aug. 28 and Sept. 6, 1991.
July 3, 1997: Petitioners withdrew and cancelled their Voluntary Offer to Sell, opting to continue development.
March 15, 2000: Municipal Agrarian Reform Office (MARO) sent another Notice of Coverage.
DAR identified 81 farmer-beneficiaries; Landbank issued Memoranda of Valuation for portions of the holdings; Collective CLOAs were issued to beneficiaries.
Petitioners filed action before the DAR Adjudication Board (DARAB), Region III, seeking cancellation of the CLOAs on grounds that properties were classified and approved as residential in 1977.
DARAB, Region III (Decision dated Oct. 14, 2004): Found properties residential based on 2004 tax receipts and NHA registration and license to sell allegedly issued in 1977, and found CLOAs infirm for lack of DAR Secretary’s signature; ordered recall and cancellation of CLOAs and enjoined beneficiaries from entering property (no pronouncement as to costs).
While DARAB appeal pending, petitioners filed Petition for Non-coverage (April 8, 2005) before DAR Regional Office, alleging properties are residential and not agricultural; submitted HLURB certification of recognition of conversion (June 17, 2005).
DAR Regional Office (Order dated Nov. 17, 2005): Directed petitioners to file application for exemption before the DAR Secretary pursuant to Administrative Order No. 4, series of 2003.
April 11, 2006: Petitioners filed Sworn Application for Exemption Clearance with DAR CLUPPI; submitted an extensive package of documentary evidence including HLURB certifications, NHA Certificate of Registration and License to Sell, municipal Sangguniang Bayan Resolution No. 2006-004, DA and NIA certifications, MARO and PARO certifications, affidavits, photographs and maps.
Opposition by respondent Samahang Magsasaka: Argued landholdings were never reclassified as residential because no HLURB-approved zoning ordinance existed pre-June 15, 1988; contended petitioners misrepresented NHA certificate coverage. Respondents submitted HLURB Certification dated Aug. 15, 2006, stating NHA CR/LS covered only 66,375 square meters composed of three specified lots (Lot Nos. 1225, 1226, 1227 under other TCTs).
Petitioners submitted an affidavit by a retired MPDC affirming properties are within residential area.

DAR Secretary’s Order (March 21, 2007; motion denied Feb. 4, 2008)

CLUPPI Committee recommended denial of exemption because HLURB Certification of Aug. 15, 2006 contradicted petitioners’ claim.
DAR Secretary’s Order (Mar. 21, 2007): Denied petitioners’ application for Exemption Clearance for aggregate 114.7030 hectares in Brgy. San Mariano; directed municipal and provincial agrarian officers to continue documentation and eventual distribution to qualified beneficiaries.
Petitioners' motion for reconsideration argued HLURB Aug. 15, 2006 certification pertained to other lots and that respondents lacked personality; petitioners submitted HLURB Certification dated Mar. 29, 2007 asserting different coverage and ratification by Sangguniang Bayan Resolution No. 2006-004.
Respondents filed rebuttal HLURB Certification dated Apr. 25, 2007, stating the town plan and zoning ordinance of San Antonio was not approved by HLURB and nullifying earlier inconsistent HLURB issuances; DAR Secretary denied motion for reconsideration (Order dated Feb. 4, 2008).

Office of the President Decision (March 1, 2010; reconsideration denied May 27, 2010)

OP reversed DAR Secretary’s Orders and granted petitioners’ application for exemption.
OP’s rationale included:
- HLURB Aug. 15, 2006 certification was not necessarily fatal because it only confirmed that 66,375 sqm of Celia Subdivision was covered by NHA CR/LS and did not prove the subject properties were not urban/residential.
- DAR A.O. No. 4, series of 2003 requires multiple documentary proofs for exemption; OP gave weight to Sangguniang Bayan Resolution No. 2006-004, CLUPPI Field Inspection Report showing proximity to residential lands and infrastructure, MARO and PARO certifications of untenanted status, NIA and DA certifications regarding irrigation and agricultural suitability, and DARAB’s finding that properties are residential.
- Concluded petitioners proved by substantial evidence that the properties are residential and not agricultural.
OP ordered reversal and grant of exemption; respondents’ motion for reconsideration denied on May 27, 2010.

Court of Appeals Decision (June 28, 2012; Resolution Feb. 4, 2013)

CA limited the principal issue to whether the properties were classified as residential before June 15, 1988, and therefore exempt from CARL.
CA found discrepancies and inconsistencies in petitioners’ documentary evidence:
- Noted inconsistency between HLURB certifications (Sept. 12, 2005 vs. Aug. 15, 2006).
- Cast doubt on Sangguniang Bayan Resolution No. 2006-004, because Sangguniang Bayan issued a Certification (Aug. 2, 2010) denying existence of such Resolution; Vice-Governor’s Office certification (July 21, 2010) indicated Resolution No. 2006-004 pertained to riprapping of a creek.
- Relied on respondents’ HLURB Certification dated Apr. 25, 2007 (which nullified previous HLURB issuances) and MPDC letter dated Sept. 6, 2006 stating no record of pre-June 15, 1988 classification and that properties were classified as agricultural under the Comprehensive Land Use Plan and Zoning Ordinance approved by the Sangguniang Bayan and Sangguniang Panlalawigan in 2002.
CA concluded petitioners failed to prove by substantial evidence that properties were classified as residential prior to CARL’s effectivity and held petitioners’ application for exemption unproven.
CA granted respondents’ petition, reversed OP Decision and reinstated DAR Secretary’s March 21, 2007 Order.

Issues Raised on Appeal to the Supreme Court

I. Whether the CA erred in declaring discrepancies and inconsistencies in petitioners’ documentary evidence.
II. Whether th