Title
Sumalo Homeowners Association of Hermosa, Bataan vs. Litton
Case
G.R. No. 146061
Decision Date
Aug 31, 2006
Landowners sought conversion of agricultural land to industrial use under CARP; DAR denied, but Office of President approved. Supreme Court upheld conversion, ruling petitioners lacked standing and prior resolution was final.
conversion application
property dispute
voluntary offer to sell

Case Summary (G.R. No. 146061)

Factual Background

On August 16, 1989, respondents filed with the DAR a VOS covering property located in Barangay Sumalo, Hermosa, Bataan, comprising three contiguous parcels with an aggregate area of 213.6189 hectares and covered by TCT Nos. 80135, 80136, 80137. On August 26, 1991, the DAR Region III Office issued a Notice of Acquisition, stating that DAR would acquire only 42.4034 hectares. Subsequently, on July 6, 1993, the Provincial Agrarian Reform Officer informed respondents that DAR would acquire 45.3789 hectares at P1.17 per square meter, for a total purchase price of P529,414.68.

After receipt of DAR’s offer to purchase, respondents withdrew their VOS and applied for conversion of the property from agricultural use to industrial, commercial, and residential uses. Respondents attributed their choice to the enactment of R.A. No. 7227 (the Bases Conversion and Development Act of 1992), which provided for the creation of a Special Economic and Free Port Zone covering Olongapo City, Subic, and parts of the municipalities of Morong and Hermosa in Bataan, and to local legislative action declaring the Hermosa Agro-Industrial Estate, adjacent to respondents’ property, as an industrial area. Respondents also alleged support from the Department of Agriculture assessments that the property was not economically suitable for agricultural production and that there was no tenurial relationship between respondents and the occupants.

DAR Secretary Ernesto D. Garilao denied respondents’ conversion application on May 14, 1996. The motion for reconsideration was also denied on September 18, 1996, prompting respondents to appeal to the Office of the President, docketed as O.P. Case No. 97-A-7020. While that appeal was pending, the Sangguniang Bayan of Hermosa issued Ordinance No. 96004, reclassifying the area that included respondents’ properties from agricultural to industrial.

Office of the President Proceedings: Torres Resolution and Zamora Resolution

On June 16, 1997, the OP, through Executive Secretary Ruben D. Torres, issued the Torres Resolution, setting aside the DAR Secretary’s orders and approving respondents’ application for conversion over the entire 213.6819-hectare property. The petitioner’s subsequent challenge to that approval centered on a later reversal by the OP.

Aggrieved by the Torres Resolution, petitioners sought reconsideration. The OP, through Executive Secretary Ronaldo B. Zamora, issued on September 4, 1998 the Zamora Resolution, which gave due course to the motion for reconsideration and reversed the Torres Resolution, reinstating the DAR Secretary’s orders of May 14, 1996 and September 18, 1996.

Court of Appeals Ruling

Respondents then appealed to the Court of Appeals through a petition for review under Rule 43 of the Rules of Court. In its June 16, 2000 Decision in CA-G.R. SP No. 52014, the Court of Appeals reversed and set aside the Zamora Resolution and reinstated the Torres Resolution, also denying petitioners’ subsequent motion for reconsideration in a separate October 23, 2000 Resolution.

Issues Raised in the Supreme Court

In the present petition for review on certiorari, petitioner raised two issues: first, whether the Court of Appeals correctly held petitioner not to be a real party in interest; and second, whether the Court of Appeals correctly anchored its decision on Fortich v. Corona.

Petitioners’ Standing and the “Real Party in Interest” Requirement

The Court addressed petitioner’s standing by applying the doctrine that a real party in interest is a party who would be benefited or injured by the judgment or is the party entitled to the avails of the suit. The Court emphasized that interest must be material, involving an interest in the issue and to be affected by the decree, and that real interest must be present, substantial, and direct, not merely contingent or expectant. The Court also noted the constitutional basis of agrarian reform rights under Section 4, Article XIII of the 1987 Constitution, which distinguishes between landless farmers and regular farmworkers, who are entitled to own the land they till, and other farmworkers, who are entitled only to a just share of the fruits.

Petitioner asserted that its members were identified as qualified beneficiaries under the Comprehensive Agrarian Reform Program (CARP), invoking **Section 22 of R.A. No. 6657 on Qualified Beneficiaries. Petitioner claimed that even if its members did not fit as agricultural lessees, share tenants, regular farmworkers, seasonal farmworkers, or actual tillers or occupants of public lands, they nevertheless allegedly fell within categories such as “other farm workers,” “collective or cooperatives of the above beneficiaries,” or “others directly working on the land.”

The Court found petitioner’s position unsupported. It observed that the claim of actual work on the Litton property was contradicted by the Ocular Inspection Report prepared by the DA Region III Office, which recommended that the property was best suited for purposes other than agricultural production and noted that the only notable developments were residential houses, roads, and recreational facilities. The Court further pointed out that the report did not mention agricultural developments supporting the claim of actual agricultural work.

The Court also relied on documentary confirmations. A Municipal Agrarian Reform Office certification dated December 14, 1994 stated that the subject properties were untenanted. Another DA Region III Office observation dated May 2, 1994 indicated that sixty percent of the Litton property was under shubland/grassland, and the remaining portion was utilized for residential, institutional, roads, orchard, and sporadic small areas cultivated to vegetables. These public documents carried a presumption of regularity that petitioner failed to overcome.

The Court further held that petitioner failed to substantiate that its members were actually identified and registered as qualified beneficiaries under Section 15 of the R.A. No. 6657 mechanism for registering beneficiaries, which required specific data and involved a registry open to inspection. Aside from self-serving assertions, petitioner presented no proof of registration or identification as qualified beneficiaries.

Consistent with this lack of evidence, the Court noted that the findings reflected in the Torres Resolution described the purported “farming community” as not composed of tenants of the Litton property but as occupants of homelots using the property primarily for residential purposes and commercial activities, and as defendants in ejectment suits involving respondents.

Reliance on Fortich v. Corona and the Nature of Interest Required

The Court tied the standing analysis to the doctrine established in Fortich v. Corona, particularly on the requirement that intervention or participation must rest on a certain right or legal interest that is actual, substantial, material, direct, and immediate. In Fortich, the Court had treated the modification of a final OP decision as void when substantially altering the outcome after finality. In the present case, the Court applied the principle that petitioner lacked the kind of qualifying interest that would authorize it to challenge the conversion approval.

The Court found that petitioner did not qualify its members as agricultural lessees, tenants, farmworkers, or regular farmworkers within the agrarian reform categories that generate ownership or entitlement to fruits under the constitutional structure. It adopted the Court of Appeals’ reasoning that petitioner’s members could not be considered farmers or farmworkers under CARL concepts because the parcels were titled in respondents’ names. The Court also observed that DAR Secretary Garilao had described petitioner’s members merely as occupants, not as farmers or farmworkers, thereby showing their absence of the required direct and immediate legal interest.

Given this deficiency, the Court held that petitioner had no personality to assail the Torres Resolution.

Timeliness and Finality of the Torres Resolution

The Court further grounded its disposition on the principle of finality in administrative adjudication. It recalled that the Torres Resolution was issued on June 16, 1997, and that DAR Secretary Garilao received a copy on June 18, 1997. Garilao did not file a motion for reconsideration or appeal. Petitioners filed a motion for reconsideration only on September 17, 1997, and Garilao manifested adoption of the motion on October 28, 1997.

The Court applied the procedural rule that OP resolutions become final after the lapse of fifteen (15) days from receipt of the copy by the parties, unless a motion for reconsideration is filed within that period. It also referenced the broader administrative finality rule under Executive Order No. 292, The Administrative Code of 1987, which likewise sets a fifteen-day finality period after receipt, and recognizes that one motion for reconsideration may suspend the period. Applying those rules, the Court held that the Torres Resolution became final and executory before petitioners filed their motion for reconsideration, assuming arguendo that petitioners had standing.

Petitioners argued that they were belatedly served a copy of the Torres Resolution, thereby excusing the timing of their motion for reconsideration. The Court reviewed the record and found no evidence supporting that assertion. It found no document proving that petitioners received a copy of the Torres Resolution fifteen days prior to their filing on September 17, 1997. Consequently, the motion could not toll the running of the statutory period. As a result, the Torres Resolution had already attained finality when petitioners filed their motion for reconsideration.

Court’s Disposition: Void Reversal and Reinstatement of the Final

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