G.R. No. 127876 . December 17, 1999. ROXAS & CO., INC., petitioner, vs. THE HONORABLE COURT OF APPEALS, DEPARTMENT OF AGRARIAN REFORM, et al., respondents.
FACTS

Petitioner Roxas & Co., Inc. owns Haciendas Caylaway, Banilad, and Palico in Nasugbu, Batangas. In 1975, Presidential Proclamation No. 1520 declared Nasugbu a tourist zone, and subsequent municipal zoning ordinances classified these lands as non-agricultural. The Department of Agriculture later certified the estates as not economically viable for agriculture. Despite this, the Department of Agrarian Reform (DAR) placed the haciendas under the Comprehensive Agrarian Reform Program (CARP) coverage and issued Certificates of Land Ownership Award (CLOAs) to farmer-beneficiaries.

ISSUE

Whether the subject lands, declared a tourist zone and certified as non-agricultural, are exempt from CARP coverage, and whether the issued CLOAs were improperly issued.

RULING

The Supreme Court ruled in favor of Roxas & Co., Inc., declaring the lands exempt from CARP. The legal logic is anchored on the supremacy of law and DAR’s own administrative rules. Presidential Proclamation No. 1520, which has the force of law, reclassified Nasugbu as a tourist zone, a determination further supported by local zoning ordinances and a Department of Agriculture certification on non-viability for agriculture. Lands classified as non-agricultural before the effectivity of the CARP Law on June 15, 1988, are explicitly exempt from coverage under DAR’s own guidelines, particularly Administrative Order No. 6, Series of 1994, which subscribes to Department of Justice Opinion No. 44, Series of 1990.
The Court found DAR’s actions contradictory and arbitrary. DAR had previously granted conversion or exemption for adjacent and similarly situated properties, such as the Batulao Tourist Resort and portions of Hacienda Caylaway itself. By issuing CLOAs over lands already declared non-agricultural by law and confirmed by other government agencies, DAR acted contrary to its own administrative orders. Therefore, the CLOAs were issued without legal basis. The proper remedy is the cancellation of these improperly issued CLOAs, a process for which DAR’s own rules, specifically Administrative Order No. 3, Series of 1996, provide a clear administrative procedure.