G.R. No. 188299 ; January 23, 2013
HEIRS OF LUIS A. LUNA and REMEGIO A. LUNA, and LUZ LUNA-SANTOS, as represented by their Attorney-in-fact, AUREA B. LUBIS, Petitioners, vs. RUBEN S. AFABLE, TOMAS M. AFABLE, FLORANTE A. EVANGELISTA, LEOVY S. EVANGELISTA, JAIME M. ILAGAN ET, AL., Respondents.

FACTS

Petitioners are co-owners of a 158.77-hectare land in Calapan City. In 1998, the DAR issued a Notice of Land Valuation and Acquisition for 100.2856 hectares of the property under CARP, and subsequently issued CLOAs to respondent farmer-beneficiaries. Petitioners filed a petition before the DARAB for cancellation of the CLOAs, arguing the land was exempt from CARP coverage. They anchored their claim on Municipal Ordinance No. 21, series of 1981, enacted by the Sangguniang Bayan of Calapan, which reclassified the area as a light intensity industrial zone prior to the effectivity of RA 6657 (CARL) on June 15, 1988. The DARAB Calapan City granted the petition, cancelling the CLOAs and declaring the land outside CARP purview due to its prior reclassification.
The DARAB Central Office reversed this decision. It held that the local adjudicator lacked jurisdiction to declare the land exempt, as such determination is an administrative function exclusively vested in the DAR Secretary. It ruled that despite the local ordinance, an exemption clearance from the DAR was still required pursuant to DAR Administrative Order No. 6, series of 1994. The Court of Appeals affirmed the DARAB Central Office’s decision.

ISSUE

Whether the subject land, reclassified by municipal ordinance prior to June 15, 1988, is automatically exempt from CARP coverage without need of a DAR exemption clearance.

RULING

The Supreme Court REVERSED the Court of Appeals and REINSTATED the DARAB Calapan City decision. The Court held that the power of local government units to convert or reclassify agricultural lands to non-agricultural uses prior to the effectivity of RA 6657 on June 15, 1988, was absolute and not subject to DAR approval. The authority was derived from the Local Autonomy Act (RA 2264) and the 1991 Local Government Code. Since Municipal Ordinance No. 21 was enacted in 1981, the reclassification was valid and effective before CARL took effect. Consequently, the land was already non-agricultural and outside CARP coverage by operation of law. The requirement for a DAR exemption clearance under AO No. 6, series of 1994, cannot override the substantive law and the vested right arising from the valid pre-CARL reclassification. The DARAB Calapan City correctly applied DOJ Opinion No. 44, series of 1990, which states that lands classified as commercial, industrial, or residential before June 15, 1988, no longer need DAR conversion clearance. Thus, the subsequent compulsory acquisition and issuance of CLOAs by the DAR were void.