G.R. No. 205618, September 16, 2019
Elfleda, Albert, Napoleon, Eden, Severiano, Celia and Leo, all surnamed Marcelo, represented by Spouses Severiano and Celia C. Marcelo, Petitioners, vs. Samahang Magsasaka ng Barangay San Mariano, represented by Godofredo Ermita, Respondent.

FACTS

Petitioners are the registered owners of six parcels of land in Barangay San Mariano, San Antonio, Nueva Ecija, with a total area of 114.7030 hectares. On March 14, 1989, they voluntarily offered to sell the properties to the government under the Comprehensive Agrarian Reform Program (CARP). Notices of Coverage under Compulsory Acquisition were sent in 1991. Petitioners formally withdrew their Voluntary Offer to Sell on July 3, 1997. Subsequently, the Municipal Agrarian Reform Office sent another Notice of Coverage in 2000, and Collective Certificates of Land Ownership Award (CLOAs) were issued to identified farmer-beneficiaries. Petitioners filed an action for cancellation of the CLOAs before the DAR Adjudication Board (DARAB), Region III, arguing the properties were classified as residential and thus exempt from CARP. The DARAB, Region III, ordered the cancellation of the CLOAs, finding the properties residential based on 2004 tax declarations and a 1977 National Housing Authority (NHA) certificate of registration and license to sell for “Celia Subdivision.” While the farmer-beneficiaries’ appeal to the DARAB was pending, petitioners filed a Petition for Non-coverage before the DAR Regional Office, which directed them to file an Application for Exemption with the DAR Secretary. Petitioners filed their Sworn Application for Exemption Clearance on April 11, 2006, submitting various supporting documents, including HLURB certifications confirming the NHA conversion and stating the lands were within an urban residence and reclassified as residential prior to June 15, 1988. Respondent Samahang Magsasaka opposed, submitting an HLURB Certification dated August 15, 2006, stating the 1977 NHA certificate covered only 66,375 square meters of different lots. The DAR Secretary denied the application for exemption on March 21, 2007, based on this HLURB Certification. Petitioners moved for reconsideration, submitting an HLURB Certification dated March 29, 2007, clarifying that the lands in the August 15, 2006 certification were different and reiterating the subject lands were reclassified as residential. Respondents opposed with another HLURB Certification dated April 25, 2007, stating the town plan and zoning ordinance of San Antonio was not yet approved by HLURB and nullifying its prior inconsistent issuances. The DAR Secretary denied the motion. Petitioners appealed to the Office of the President (OP), which reversed the DAR Secretary and granted the exemption. Respondents appealed to the Court of Appeals (CA), which reversed the OP and reinstated the DAR Secretary’s order denying the exemption. Petitioners filed the present Petition for Review.

ISSUE

Whether the Court of Appeals erred in reversing the Office of the President and reinstating the DAR Secretary’s order denying petitioners’ application for exemption from CARP coverage on the ground that the subject landholdings were not validly reclassified as residential prior to June 15, 1988.

RULING

Yes, the Court of Appeals erred. The Supreme Court granted the petition, reversed the CA Decision and Resolution, and reinstated the Office of the President’s decision granting the exemption. The Court held that the subject landholdings were validly reclassified from agricultural to residential/non-agricultural prior to June 15, 1988, and are thus exempt from CARP coverage. The 1977 NHA Certificate of Registration and License to Sell constituted a valid reclassification. The NHA, as the government agency responsible for housing and urban development at the time, had the authority to approve such conversions. This reclassification was confirmed by subsequent HLURB certifications and ratified by the Sangguniang Bayan of San Antonio through Resolution No. 2006-004. The Court found that the HLURB Certification dated April 25, 2007, which respondents relied upon, was issued without prior notice to petitioners and effectively nullified earlier HLURB certifications without justification, violating petitioners’ right to due process. Furthermore, the Court emphasized that the determination of the OP, as the highest administrative body, is generally accorded great respect and finality. The OP correctly found that petitioners had sufficiently established the prior reclassification of their lands. Therefore, the lands are excluded from the coverage of the Comprehensive Agrarian Reform Law.