G.R. No. 166748; April 24, 2009
LAUREANO V. HERMOSO, as represented by his Attorney-in-Fact FLORIDA L. UMANDAP, Petitioner, vs. COURT OF APPEALS and HEIRS OF ANTONIO FRANCIA and PETRA FRANCIA, NAMELY: BENJAMIN P. FRANCIA, CECILIA FRANCIA, AMOS P. FRANCIA, JR., FRANCISCO F. VILLARICA, DANILO F. VILLARICA, RODRIGO F. VILLARICA, MELCHOR F. VILLARICA, JESUS F. VILLARICA, BENILDA F. VILLARICA and ERNESTO F. VILLARICA, Respondents.

FACTS

The case involves parcels of land (Lot No. 3257 owned by Petra Francia and Lot 3415 owned by Antonio Francia) in Malhacan, Meycauayan, Bulacan. Since 1978, petitioner Laureano Hermoso and Miguel Banag have been occupying and cultivating these lots as tenants. They filed a petition for coverage of the lots under Presidential Decree (P.D.) No. 27. The Department of Agrarian Reform (DAR) issued an order on July 4, 1995, granting the petition and placing the lands under Operation Land Transfer. In a separate proceeding, the DARAB upheld the tenancy relationship of Hermoso and Banag with the respondents, a decision which became final and executory after being affirmed by the Supreme Court in G.R. No. 127668. However, respondents opposed the coverage, claiming that the lands were already approved for conversion to urban purposes by a DAR Secretary’s Order dated June 5, 1973, which stated that Operation Land Transfer under P.D. No. 27 does not cover the subject parcels. The Housing and Land Use Regulatory Board (HLURB) also reclassified the lands as early as October 14, 1978. The DAR and the Office of the President upheld the coverage, but the Court of Appeals reversed these decisions, dismissing the Petition for Coverage.

ISSUE

Whether Lot Nos. 3257 and 3415 are covered by P.D. No. 27.

RULING

The Supreme Court resolved to deny the petition, affirming the Court of Appeals. The lands are not covered by P.D. No. 27. The Court held that the final and executory decision declaring Hermoso a tenant does not automatically make the lands agricultural and covered by agrarian reform. The authority to classify lands is vested by law in specific government agencies. In this case, the DAR Secretary, pursuant to the Agricultural Land Reform Code (R.A. No. 3844), had already issued an Order on June 5, 1973, declaring the lands (which were part of a larger estate) as “suited for residential, commercial, industrial or other urban purposes” and stating they were “not covered by the Operation Land Transfer under P.D. No. 27.” This conversion order, issued under the authority of R.A. No. 3844, effectively removed the lands from the coverage of P.D. No. 27. The subsequent HLURB reclassification in 1978 reinforced this. Therefore, despite the existence of a tenancy relationship, the subject parcels, having been validly converted/reclassified to non-agricultural uses prior to the tenancy (which began in 1978), are excluded from agrarian reform coverage under P.D. No. 27.