G.R. No. 170823 , March 27, 2007
Department of Agrarian Reform, represented by OIC-Secretary Nasser C. Pangandaman, Petitioner, vs. Oroville Development Corp., represented by Antonio H. Tiu and Waldo G. Rebolos, Respondent.

FACTS

Oroville Development Corporation applied with the DAR for the exclusion of its 48.8939-hectare property in Cagayan de Oro City from CARP coverage. It claimed the land was reclassified as residential prior to June 15, 1988, under a 1979 Town Plan and Zoning Ordinance approved by the HLURB in 1980. The DAR Secretary denied the application, declaring the land covered by CARP, a ruling affirmed by the Office of the President.
On appeal, the Court of Appeals initially upheld the DAR, relying on a 1997 certification from the City Planning Office stating the land was agricultural. Upon Oroville’s motion for reconsideration, the CA reversed itself in an Amended Decision, now crediting later 2004 Zoning Certifications stating the property was within the city’s “potential growth areas for urban expansion,” and declared it exempt from CARP.

ISSUE

Whether the subject property is classified as agricultural land and thus covered by the Comprehensive Agrarian Reform Program.

RULING

The Supreme Court granted the DAR’s petition and reversed the Court of Appeals’ Amended Decision. The Court reinstated the CA’s original decision declaring the property agricultural and covered by CARP. The legal logic centered on the specific requirement for exemption: the land must have been classified as non-agricultural (e.g., residential, commercial, industrial) prior to June 15, 1988, the effectivity of the Comprehensive Agrarian Reform Law.
The Court found that the 2004 Zoning Certifications, which the CA relied upon, were not proof of a valid reclassification. These certifications merely identified the area as a “potential growth area,” which is a planning concept, not a formal land classification category under the zoning ordinance. The term does not equate to a reclassification as residential land. Crucially, the Assistant City Development Coordinator later clarified that the 1979 Zoning Code, under which the property remained agricultural, was still in force. The earlier 1997 certification stating the land was agricultural was therefore more authoritative and consistent with the law. Tax declarations claiming residential use were deemed inconclusive for zoning purposes. Since Oroville failed to prove a valid reclassification to residential use prior to the CARL’s cut-off date, the property correctly remained classified as agricultural land subject to agrarian reform.