Title
Union Bank of the Philippines vs. Regional Agrarian Reform Officer
Case
G.R. No. 200369
Decision Date
Mar 1, 2017
Union Bank challenged DAR's issuance of CLOAs, claiming CARP exemption due to land slope and undeveloped status. SC upheld DAR's jurisdiction, denied exemption, and affirmed CLOAs, citing lack of tenancy relationship and insufficient evidence.
dispute jurisdiction
factual findings
union bank

Case Summary (G.R. No. 200369)

Factual Background

Union Bank was the registered owner of two contiguous parcels in Barangay Bunggo, Calamba, Laguna, covered by Transfer Certificate of Title Nos. T-137846 and T-156610, with areas of 1,083,250 and 260,132 square meters respectively, which it offered to the DAR under a Voluntary Offer to Sell (VOS) pursuant to the Comprehensive Agrarian Reform Program. DAR and the Land Bank inspected the lands, made valuations that Union Bank disputed, and DAR caused Land Bank to open trust accounts pending resolution; meanwhile DAR issued Certificates of Land Ownership Award (CLOAs) to private respondents covering the TCT No. T-156610 parcel and transmitted CLOAs to the Register of Deeds in September 1993. Union Bank thereafter sought withdrawal of its VOS and administrative exemption from CARP coverage on grounds that the lands exceeded an 18% slope and were undeveloped.

Administrative Determinations and Evidence

The DAR Secretary denied Union Bank’s request for exemption and withdrawal of the VOS in an order dated July 21, 2008, finding that Union Bank failed to prove by substantial evidence that the lands were undeveloped and had slopes over 18% because the slope and land capability maps submitted were not certified by the Department of Environment and Natural Resources. The MARO’s case report, relied upon by the DAR Secretary and later by the Court of Appeals, reported the presence of multiple crops and agricultural activity on the lands, while Union Bank produced certifications such as a National Irrigation Administration statement that the lands were not irrigated and a land capability map by Asian Appraisal indicating pasture suitability.

Initial PARAD Proceedings on Cancellation of CLOAs

Union Bank filed petitions for cancellation of CLOAs before the PARAD of Laguna asserting the invalidity of the CLOAs issued over the parcels. The PARAD dismissed the petitions as premature on the ground that an administrative determination by the DAR Secretary excluding the land from CARP coverage must precede any cancellation action; the PARAD also noted the absence of tenancy allegations in Union Bank’s complaints. The PARAD denied motions for reconsideration and the appeals were brought to the DARAB.

DARAB and Court of Appeals Rulings

The DARAB denied Union Bank’s appeal, reiterating that a positive administrative declaration by the DAR Secretary that the property was exempt from CARP was a precondition to any cancellation proceeding and that jurisdiction lay with the DAR for matters related to administrative implementation. Union Bank sought judicial review by the Court of Appeals in consolidated petitions. The CA denied Union Bank’s petitions in two separate decisions, holding that the DAR Secretary’s factual findings were supported by substantial evidence and that the DARAB lacked jurisdiction over cancellation of CLOAs involving parties who did not show a tenancy relationship with the landowner.

Issues Presented to the Supreme Court

The consolidated petitions presented two principal questions: first, whether the DARAB has jurisdiction to entertain petitions for cancellation of CLOAs when the parties do not have a tenancy relationship; and second, whether the factual findings of the DAR Secretary on exemption from CARP may be reviewed and reweighed in a petition for certiorari to the Supreme Court.

Parties’ Contentions

Union Bank contended that the DARAB was vested with quasi-judicial powers by Executive Order No. 229 and that those powers include jurisdiction to adjudicate the validity of CLOAs, effectively ousting the DAR Secretary from that question and precluding shared jurisdiction. Union Bank further insisted that the lands satisfied the statutory exemption criteria of 18% slope and undeveloped condition, and thereby warranted cancellation of the CLOAs. Private respondents and government respondents maintained that classification, identification, and exclusion from CARP coverage are functions lodged with the DAR Secretary and DAR regional offices, and that the DARAB’s jurisdiction is limited to agrarian disputes that presuppose tenurial relations between landowner and tenant.

Jurisdictional Analysis and Governing Law

The Court examined the statutory scheme in RA No. 6657, EO No. 229, and EO No. 129-A, noting that Section 50 of the CARL and Section 17 of EO No. 229 originally vested primary quasi-judicial and implementation jurisdiction in the DAR. The Court explained that EO No. 129-A later transferred adjudicatory functions to the DARAB and delegated implementation functions to DAR regional offices, thereby effecting a split: the DARAB’s jurisdiction is confined to agrarian disputes whereas administrative implementation and determinations regarding coverage and exemption rest with the DAR. The Court reiterated that an “agrarian dispute” under Section 3(d) of the CARL concerns controversies over tenurial arrangements and that jurisdiction depends on prima facie allegations of tenancy.

Application of Jurisdictional Tests to the Present Petitions

Applying the established requisites of a tenancy relationship—landowner-tenant parties, agricultural subject land, consent, agricultural purpose, personal cultivation, and sharing of harvests—the Court found that Union Bank’s petitions failed to allege any tenurial relations. Union Bank’s complaints merely identified respondents as CLOA beneficiaries and challenged their qualifications; they did not allege that the beneficiaries were tenants of Union Bank. Accordingly, the Court concluded that the PARAD and DARAB lacked jurisdiction to entertain Union Bank’s cancellation petitions because those forums exercise jurisdiction over agrarian disputes premised on tenancy, not over administrative questions of CARP coverage or over disputes involving parties who were not tenants.

Treatment of the DAR Secretary’s Factual Findings

On the challenge to the DAR Secretary’s factual ruling denying exemption, the Court reiterated controlling principles: a petition for review under Rule 45 raises questions of law, not questions of fact; the Supreme Court does not reweigh evidence; and factual findings of administrative agencies, particularly those of the Secretary of Agrarian Reform, enjoy respect and finality w

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