Davao New Town Development Corporation vs. Saliga

A valid reclassification of agricultural land to non-agricultural use by the local government unit, through a zoning ordinance duly approved by the HSRC prior to June 15, 1988, removes the land from the coverage of R.A. No. 6657 without need of DAR approval. Because the property was no longer agricultural, no tenancy relationship existed between DNTDC and the respondents.

The respondents are tenant-farmers who had cultivated the two parcels in Catalunan Pequeño, Davao City, while DNTDC is the corporation that acquired the property and claims to be a purchaser in good faith. The dispute turns on the interaction of three statutes: P.D. No. 27, which deemed tenant-farmers of rice and corn lands owners as of October 21, 1972; R.A. No. 3844, the Agricultural Land Reform Code, which grants agricultural lessees security of tenure; and R.A. No. 6657, the Comprehensive Agrarian Reform Law, which covers only agricultural lands.

The two parcels at the center of the case — 4.9964 hectares, known as Lot 850-C and covered by TCT No. T-8929, and 2.5574 hectares, known as Lot 850-B-3-D and covered by TCT No. T-8930 — are situated in Catalunan Pequeño, Davao City and were originally registered in the name of Atty. Eugenio Mendiola. The respondents, spouses Gloria Espino Saliga and Cesar Saliga and spouses Demetrio Ehara and Roberta Sugue Ehara, claimed that they and their parents, from whom they took over cultivation, had been tenants of the property as early as 1965. On August 12, 1981, the respondents and Eugenio executed a five-year lease contract; while it stipulated their respective rights and obligations, the respondents claimed it was actually a device Eugenio used to evade the land reform law. The contract shows that the property was primarily planted with coconut and coffee trees and secondarily with several fruit-bearing trees.

On February 5, 1998, the respondents filed before the Office of the PARAD in Davao City a complaint for injunction, cancellation of titles and damages against DNTDC, amending it on February 13, 1998. They argued that under P.D. No. 27 they were deemed owners of the property beginning October 21, 1972, so the subsequent transfer to DNTDC was invalid, and that DNTDC could not have been a buyer in good faith because it did not verify whether the property was tenanted; they submitted tax declarations showing the property was agricultural as of 1985. DNTDC answered that it purchased the property in good faith in 1995 from Paz M. Flores and Elizabeth M. Nepumuceno, Eugenio's sister-in-law and daughter; that the tenancy relationship had already expired with the lease contracts in 1986; that the Davao City Office of the Zoning Administrator had confirmed the property was not classified as agricultural; that the vendors' affidavit of non-tenancy affirmed the absence of recognized agricultural lessees; and that the property had been classified within an "urban/urbanizing zone" in the "1979-2000 Comprehensive Land Use Plan for Davao City" adopted by the City Council and approved by the HSRC.

While the PARAD case was pending, DNTDC filed before the MTCC of Davao City a complaint for unlawful detainer against Demetrio Ehara, Jr., Reynaldo Saliga and Liza Saliga, the children of the respondent spouses, claiming ownership of the 2.5574-hectare portion which the children occupied by mere tolerance and refused to vacate despite demands. The children raised lack of jurisdiction, arguing the case involved an agrarian dispute and that as immediate members of the farm household they were entitled to tenurial security under R.A. No. 3844 and R.A. No. 6657. On December 20, 2000, the MTCC granted DNTDC's complaint and ordered the children to vacate, ruling they were not tenants because they failed to prove their stay was by virtue of a tenancy agreement and because they occupied portions different from their parents' landholding, and that the 2.5574-hectare portion was no longer agricultural. The children did not appeal. Instead, on June 1, 2001, they filed before the RTC, Branch 17, Davao City a petition for prohibition against DNTDC to enjoin execution of the MTCC decision, repeating their defenses; Liza and Reynaldo added that Cesar had already died and that they were suing in their own right as heirs/successors-in-interest. On November 29, 2001, the children and DNTDC entered into a compromise agreement: the children undertook to voluntarily and peacefully vacate the 2.5574-hectare portion and demolish their houses, while DNTDC agreed to give each ₱20,000.00 as financial assistance. The RTC approved the compromise agreement on December 7, 2001.

The records established the property's classification through a series of documents: the Davao City Planning and Development Board prepared the Comprehensive Development Plan for 1979-2000; the HSRC approved it through Board Resolution R-39-4 dated July 31, 1980; the HLURB confirmed the approval per certification issued on April 26, 2006; the City Council of Davao City adopted the plan through Resolution No. 894 and City Ordinance No. 363, series of 1982; the Office of the City Planning and Development Coordinator, Office of the Zoning Administrator certified on June 15, 1995 that per Ordinance No. 363 as amended by S.P. Resolution No. 2843 and Ordinance No. 561, series of 1992, the property in barangay Catalunan Pequeño is within an "urban/urbanizing" zone; the Office of the City Agriculturist confirmed on December 4, 1998 that the property is not classified as prime agricultural land and is not irrigated nor covered by an irrigation project as certified by the National Irrigation Administration; and the HLURB, per certification dated May 2, 1996, quoted the April 8, 1996 certification of the Office of the City Planning and Development Coordinator stating that the Mintal District, which includes barangay Catalunan Pequeño, is identified as one of the "urbaning [sic] district centers and priority areas and for development and investments" in Davao City. The record did not show that the respondents had been issued certificates of land transfer, or that the government had placed the property under its operation land transfer program, or that the MARO had recognized the respondents as actual tenants on the relevant date.

• Compromise Agreement: DNTDC argued that the respondents, in the compromise agreement, categorically agreed to voluntarily vacate the property upon receipt of the stated financial assistance; since the RTC approved the compromise agreement and the respondents had already received the agreed financial assistance, the CA should have considered these incidents that immediately bound the respondents to comply with their undertaking to vacate.
• Absence of Tenancy Relationship: DNTDC maintained that no tenancy relationship exists between it and the respondents; while a tenancy relationship existed between the respondents and Eugenio, this relationship was terminated when the MTCC ordered the respondents to vacate the property, and this MTCC decision had already become final and executory upon the respondents' failure to seasonably appeal. DNTDC added that after the respondents' lease contract with Eugenio expired and the latter simply allowed the former to continue occupying the property, the respondents became bound by an implied promise to vacate its premises upon demand.
• Reclassification: DNTDC argued that the property is no longer agricultural, contrary to the findings of the DARAB and the CA; the proceedings before the PARAD had sufficiently addressed this issue, which the CA recognized in the assailed decision, and the findings of the PARAD should prevail over those of the DARAB.
• Intertwined Cases: DNTDC additionally argued that the MTCC and RTC cases are closely intertwined with and relevant to the present case; Reynaldo and Liza categorically stated in their petition in the RTC case that they were suing in their own right as heirs/successors-in-interest of Cesar, so the spouses Saliga, as represented and succeeded by Reynaldo and Liza, are bound by the compromise agreement that the latter signed in the RTC case.

• Irrelevance of MTCC and RTC Cases: The respondents argued that the MTCC and RTC cases do not bear any significance to the present controversy; the parties in the MTCC and the RTC cases, aside from DNTDC, were Demetrio Ehara, Jr., Reynaldo and Liza who are undeniably different from them.
• Tenancy and Agricultural Classification: Relying on the ruling of the CA, the respondents argued that a tenancy relationship exists between them and DNTDC and that the property is still agricultural; they quoted in toto the CA's discussions on these issues to support their position.

• Reclassification: Whether the property had been reclassified from agricultural to non-agricultural uses prior to June 15, 1988 so as to remove it from the coverage of R.A. No. 6657.
• Tenancy Relationship: Whether an agricultural leasehold or tenancy relationship exists between DNTDC and the respondents.
• Compromise Agreement: Whether the compromise agreement signed by the respondents' children in the RTC case binds the respondents.

• Reclassification: Yes. The property had been validly reclassified as non-agricultural prior to June 15, 1988 through Davao City Ordinance No. 363, series of 1982, adopting the Comprehensive Development Plan approved by the HSRC; DAR approval was not required for such reclassification.
• Tenancy Relationship: No. No tenancy relationship existed between DNTDC and the respondents because the property was no longer agricultural, the second requisite of tenancy being absent.
• Compromise Agreement: No. The respondents were not bound by the compromise agreement their children signed in the RTC case, which settled only the issue of physical possession over the 2.5574-hectare portion.

• Reclassification: The SC held that the City Council of Davao City had the authority to adopt zoning resolutions and ordinances under Section 3 of R.A. No. 2264, the then governing Local Government Code, which specifically empowered municipal and/or city officials to "adopt zoning and subdivision ordinances or regulations in consultation with the National Planning Commission." In Pasong Bayabas Farmers Asso., Inc. vs. Court of Appeals, the SC held that this power of local government units to reclassify or convert lands to non-agricultural uses is not subject to the approval of the DAR, affirming the authority of the Municipal Council of Carmona to issue a zoning classification and reclassify the property in dispute from agricultural to residential through Kapasiyahang Bilang 30, as approved by the HSRC. In Junio vs. Secretary Garilao, the SC clarified "once and for all" that "with respect to areas classified and identified as zonal areas not for agricultural uses, like those approved by the HSRC before the effectivity of RA 6657 on June 15, 1988, the DAR's clearance is no longer necessary for conversion," declaring the disputed landholding validly reclassified from agricultural to residential pursuant to Resolution No. 5153-A of the City Council of Bacolod. The SC arrived at a significantly similar ruling in Agrarian Reform Beneficiaries Association (ARBA) vs. Nicolas.

  Based on these considerations, the SC held that the property had been validly reclassified as non-agricultural land prior to June 15, 1988, noting the following facts established in the records: (1) the Davao City Planning and Development Board prepared the Comprehensive Development Plan for 1979-2000 to provide a comprehensive zoning plan for Davao City; (2) the HSRC approved this plan through Board Resolution R-39-4 dated July 31, 1980; (3) the HLURB confirmed the approval per certification issued on April 26, 2006; (4) the City Council of Davao City adopted the plan through Resolution No. 894 and City Ordinance No. 363, series of 1982; (5) the Office of the City Planning and Development Coordinator, Office of the Zoning Administrator expressly certified on June 15, 1995 that per City Ordinance No. 363, series of 1982 as amended by S.P. Resolution No. 2843 and Ordinance No. 561, series of 1992, the property in barangay Catalunan Pequeño is within an "urban/urbanizing" zone; (6) the Office of the City Agriculturist confirmed the classification and stated that the property is not classified as prime agricultural land and is not irrigated nor covered by an irrigation project as certified by the National Irrigation Administration, per certification issued on December 4, 1998; and (7) the HLURB, per certification dated May 2, 1996, quoted the April 8, 1996 certification of the Office of the City Planning and Development Coordinator stating that the Mintal District, which includes barangay Catalunan Pequeño, is identified as one of the "urbaning [sic] district centers and priority areas and for development and investments" in Davao City.

  The SC rejected the CA's refusal to consider the May 2, 1996 HLURB certification, which the DARAB and the CA brushed aside on technicality — the CA reasoning that it was belatedly presented and that it referred to a parcel of lot subject of another case, albeit similarly involving DNTDC and property located within the same district. First, while evidence submitted past the presentation-of-evidence stage is generally no longer admissible, strict application of this rule may be relaxed when the merits of the case call for it and the governing rules of procedure explicitly command a relaxation; under Section 3, Rule I of the 1994 DARAB New Rules of Procedure, the DARAB shall not be bound by technical rules of procedure and evidence provided under the Rules of Court and shall employ all reasonable means to ascertain the facts of every case, and the SC has held that "rules of procedure ought not to be applied in a very rigid, technical sense, for they are adopted to help secure, not override, substantial justice." Second, even granting arguendo that the certification was issued in relation to another case involving a different parcel of land, it is not without value; its clear-cut declarations, which the DARAB and the CA should have considered and which the SC found sufficiently convincing, show that Catalunan Pequeño, where the property lies, is classified as within the urbanizing district centers of Davao City, thus satisfying the purpose of establishing by sufficient evidence the property's reclassification as non-agricultural land prior to June 15, 1988.

  Considering that the property is no longer agricultural as of June 15, 1988, it is removed from the operation of R.A. No. 6657. By express provision, the CARL covers only those public or private lands devoted or suitable for agriculture, the operative word being agricultural. Under Section 3(c) of R.A. No. 6657, agricultural lands refer to lands devoted to agricultural activity and not otherwise classified as mineral, forest, residential, commercial, or industrial land. In its Administrative Order No. 1, series of 1990, the DAR further explained the term "agricultural lands" as referring to "those devoted to agricultural activity as defined in R.A. 6657 and x x x not classified in town plans and zoning ordinances as approved by the Housing and Land Use Regulatory Board (HLURB) and its preceding competent authorities prior to 15 June 1988 for residential, commercial or industrial use." Only those parcels of land specifically classified as agricultural are covered by the CARL; any parcel of land otherwise classified is beyond its ambit.

  The SC also held that no vested rights under P.D. No. 27 accrued to the respondents. Under P.D. No. 27, tenant-farmers of rice and corn agricultural lands are "deemed owners" of the land that they till as of October 21, 1972, but this policy should not be interpreted as automatically vesting in them absolute ownership over their respective tillage; the tenant-farmers must still first comply with the requisite preconditions, i.e., payment of just compensation and perfection of title before acquisition of full ownership. In Del Castillo vs. Orciga, the SC explained that land transfer under P.D. No. 27 is effected in two stages: first, the issuance of a certificate of land transfer (CLT); and second, the issuance of an emancipation patent (EP). The first stage — issuance of the CLT — serves as the government's recognition of the tenant farmers' inchoate right as "deemed owners" of the land that they till; the second stage — issuance of the EP — perfects the title of the tenant farmers and vests in them absolute ownership upon full compliance with the prescribed requirements. As a preliminary step, the CLT immediately serves as the tangible evidence of the government's recognition of the tenant farmers' inchoate right and of the subjection of the particular landholding to the government's OLT program.

  In this case, the record did not show that the respondents had been issued CLTs, which could have been their best evidence of the government's recognition of their inchoate right as "deemed owners" of the property. Similarly, the record did not show that the government had placed the property under its OLT program or that the government, through the MARO, recognized the respondents as the actual tenants of the property on the relevant date, thereby sufficiently vesting in them such inchoate right. The SC concluded that no CLTs had ever been issued to the respondents and that the government never recognized any inchoate right on their part as "deemed owners" of the property; no vested rights under P.D. No. 27, in relation to R.A. No. 6657, accrued to the respondents such that when the property was reclassified prior to June 15, 1988, it did not fall within the coverage of R.A. No. 6657. Moreover, the contract of lease executed between Eugenio and the respondents shows that the property was primarily planted with coconut and coffee trees and secondarily with several fruit-bearing trees; by its explicit terms, P.D. No. 27 applies only to private agricultural lands primarily devoted to rice and corn production, so the property could never have been covered by P.D. No. 27.

• Tenancy Relationship: The SC held that no tenancy relationship existed between DNTDC, as the owner of the property, and the respondents, as the purported tenants, because the second essential requisite of tenancy — that the subject is agricultural land — was lacking, the property having been reclassified as non-agricultural. Under Solmayor vs. Arroyo, the essential requisites of a tenancy relationship, all of which must concur, are: (1) the parties are the landowner and the tenant; (2) the subject is agricultural land; (3) there is consent; (4) the purpose is agricultural production; (5) there is personal cultivation; and (6) there is sharing of harvests. The absence of any of these requisites does not make an occupant a cultivator, or a planter a de jure tenant; consequently, a person who is not a de jure tenant is not entitled to security of tenure nor covered by the land reform program of the government under any existing tenancy laws. Accordingly, the respondents are not de jure tenants and are not entitled to the benefits granted to agricultural lessees under P.D. No. 27, in relation to R.A. No. 6657.

  The SC noted that the respondents, through their predecessors-in-interest, had been tenants of Eugenio as early as 1965. Under Section 7 of R.A. No. 3844, once the leasehold relation is established, the agricultural lessee is entitled to security of tenure and acquires the right to continue working on the landholding. Section 10 further strengthens such tenurial security by declaring that the mere expiration of the term or period in a leasehold contract, or the sale, alienation or transfer of the legal possession of the landholding, shall not extinguish the leasehold relation; in case of sale or transfer, the purchaser or transferee is subrogated to the rights and obligations of the landowner/lessor. By the provisions of Section 10, mere expiration of the five-year term of the respondents' lease contract could not have caused the termination of any tenancy relationship that may have existed between the respondents and Eugenio.

  Still, the SC could not agree that the respondents are the tenants of DNTDC, because R.A. No. 3844 also enumerates the instances that put an end to the lessee's protected tenurial rights. Under Section 7, the right of the agricultural lessee to continue working on the landholding ceases when the leasehold relation is extinguished or when the lessee is lawfully ejected from the landholding. Section 8 enumerates the causes that terminate a relationship, while Section 36 enumerates the grounds for dispossessing the agricultural lessee of the landholding. Under Section 36(1) of R.A. No. 3844, as amended by Section 7 of R.A. No. 6389, declaration by the department head, upon recommendation of the National Planning Commission, to be suited for residential, commercial, industrial or some other urban purposes, terminates the right of the agricultural lessee to continue in its possession and enjoyment. The approval of the conversion, however, is not limited to the authority of the DAR or the courts; in Pasong Bayabas and Junio, the SC essentially explained that the reclassification and conversion of agricultural lands to non-agricultural uses prior to the effectivity of R.A. No. 6657 on June 15, 1988 was a coordinated effort of several government agencies, such as local government units and the HSRC.

  In effect, whether the leasehold relationship between the respondents and Eugenio had been established by virtue of R.A. No. 3844 or of the five-year lease contract executed in 1981, this leasehold relationship had been terminated with the reclassification of the property as non-agricultural land in 1982. The expiration of the five-year lease contract in 1986 could not have done more than simply finally terminate any leasehold relationship that may have prevailed under the terms of that contract. Consequently, when DNTDC purchased the property in 1995, there was no longer any tenancy relationship that could have subrogated DNTDC to the rights and obligations of the previous owner.

• Compromise Agreement: The SC agreed with the respondents for two plain reasons. First, the respondents' position finds support in logic; the similarity in their last names or familial relationship cannot automatically bind the respondents to any undertaking that their children in the RTC case had agreed to, because DNTDC has not shown that the respondents had expressly or impliedly acquiesced to their children's undertaking, that the respondents had authorized the latter to bind them in the compromise agreement, or that the respondents' cause of action in the instant case arose from or depended on those of their children in the cases before the MTCC and the RTC. Moreover, the respondents' children and DNTDC executed the compromise agreement in the RTC case with the view of settling the controversy concerning only the issue of physical possession over the disputed 2.5574-hectare portion subject of the ejectment case before the MTCC. Second, the issues involved in the cases before the MTCC and the RTC are different from the issues involved in the present case: in the ejectment case before the MTCC, the sole issue was possession de jure, while in the prohibition case before the RTC, the issue was the propriety of the execution of the decision of the MTCC in the ejectment case; in contrast, the issues in the present controversy that originated from the PARAD boil down to the respondents' averred rights as tenants of the property. Whatever decision the MTCC in the ejectment case arrived at, which was limited to possession de jure of the disputed 2.5574-hectare portion of the property, could not have affected any right that the respondents may have had as tenants over the property; any agreement that the respondents' children had entered into in the RTC case could not have bound the respondents in the present controversy, as the respondents' claim over the property and their alleged right to continue in its possession clearly go beyond mere possession de jure, whether of the 2.5574-hectare portion subject of the ejectment case or of the entire property in the present case.

• Reclassification by Local Government Units — Local government units have the power to reclassify or convert lands to non-agricultural uses, and this power is not subject to the approval of the DAR. Under Section 3 of R.A. No. 2264, municipal and/or city officials are empowered to "adopt zoning and subdivision ordinances or regulations in consultation with the National Planning Commission." With respect to areas classified and identified as zonal areas not for agricultural uses, like those approved by the HSRC before the effectivity of R.A. No. 6657 on June 15, 1988, the DAR's clearance is no longer necessary for conversion. The SC applied this doctrine to hold that Davao City Ordinance No. 363, series of 1982, adopting the Comprehensive Development Plan approved by the HSRC, validly reclassified the property as non-agricultural prior to June 15, 1988.

• Coverage of R.A. No. 6657 — The Comprehensive Agrarian Reform Law covers only those public or private lands devoted or suitable for agriculture. Under Section 3(c) of R.A. No. 6657, agricultural lands refer to lands devoted to agricultural activity and not otherwise classified as mineral, forest, residential, commercial, or industrial land. Under DAR Administrative Order No. 1, series of 1990, "agricultural lands" refer to those devoted to agricultural activity and not classified in town plans and zoning ordinances as approved by the HLURB and its preceding competent authorities prior to 15 June 1988 for residential, commercial or industrial use. A parcel of land otherwise classified is beyond the ambit of the CARL.

• Requisites of Tenancy Relationship — Under Solmayor vs. Arroyo, the essential requisites of a tenancy relationship, all of which must concur, are: (1) the parties are the landowner and the tenant; (2) the subject is agricultural land; (3) there is consent; (4) the purpose is agricultural production; (5) there is personal cultivation; and (6) there is sharing of harvests. The absence of any of these requisites does not make an occupant a cultivator, or a planter a de jure tenant. A person who is not a de jure tenant is not entitled to security of tenure nor covered by the land reform program of the government under any existing tenancy laws.

• Security of Tenure under R.A. No. 3844 — Under Section 7 of R.A. No. 3844, once the leasehold relation is established, the agricultural lessee is entitled to security of tenure and acquires the right to continue working on the landholding. Section 10 provides that the mere expiration of the term or period in a leasehold contract, or the sale, alienation or transfer of the legal possession of the landholding, shall not extinguish the leasehold relation; in case of sale or transfer, the purchaser or transferee is subrogated to the rights and obligations of the landowner/lessor. However, under Section 36(1) of R.A. No. 3844, as amended by Section 7 of R.A. No. 6389, declaration by the department head, upon recommendation of the National Planning Commission, to be suited for residential, commercial, industrial or some other urban purposes, terminates the right of the agricultural lessee to continue in its possession and enjoyment.

• Two Stages of Land Transfer under P.D. No. 27 — Under P.D. No. 27, tenant-farmers of rice and corn agricultural lands are "deemed owners" of the land that they till as of October 21, 1972. This policy does not automatically vest absolute ownership; the tenant-farmers must still first comply with the requisite preconditions, i.e., payment of just compensation and perfection of title before acquisition of full ownership. Under Del Castillo vs. Orciga, land transfer under P.D. No. 27 is effected in two stages: first, the issuance of a certificate of land transfer (CLT); and second, the issuance of an emancipation patent (EP). The CLT serves as the government's recognition of the tenant farmers' inchoate right as "deemed owners" of the land that they till; the EP perfects the title of the tenant farmers and vests in them absolute ownership upon full compliance with the prescribed requirements.

• Relaxation of Procedural Rules — Rules of procedure ought not to be applied in a very rigid, technical sense, for they are adopted to help secure, not override, substantial justice. Under Section 3, Rule I of the 1994 DARAB New Rules of Procedure, the DARAB shall not be bound by technical rules of procedure and evidence provided under the Rules of Court, and shall employ all reasonable means to ascertain the facts of every case. The SC applied this doctrine to consider the May 2, 1996 HLURB certification that DNTDC attached only to its motion for reconsideration.

• "with respect to areas classified and identified as zonal areas not for agricultural uses, like those approved by the HSRC before the effectivity of RA 6657 on June 15, 1988, the DAR's clearance is no longer necessary for conversion." — This passage from Junio vs. Secretary Garilao, quoted by the SC, states the rule that DAR approval is not required for reclassification validly made by local government units and approved by the HSRC prior to June 15, 1988.
• "only those parcels of land specifically classified as agricultural are covered by the CARL; any parcel of land otherwise classified is beyond its ambit." — This passage states the SC's rule on the coverage of R.A. No. 6657, limiting it to lands specifically classified as agricultural.
• "The absence of any of these requisites does not make an occupant a cultivator, or a planter, a de jure tenant." — This passage, from Solmayor vs. Arroyo, states the rule that all six requisites of tenancy must concur, and the absence of any one negates the existence of a tenancy relationship.
• "rules of procedure ought not to be applied in a very rigid, technical sense, for they are adopted to help secure, not override, substantial justice." — This passage states the SC's rule on relaxing procedural rules, applied to consider the HLURB certification belatedly submitted.

• Pasong Bayabas Farmers Asso., Inc. vs. Court of Appeals, 473 Phil. 64 (2004) — Controlling precedent; held that the power of local government units to reclassify or convert lands to non-agricultural uses is not subject to the approval of the DAR, and that reclassification and conversion prior to R.A. No. 6657 was a coordinated effort of several government agencies.
• Junio vs. Secretary Garilao, 503 Phil. 154 (2005) — Controlling precedent; clarified that with respect to areas classified and identified as zonal areas not for agricultural uses, like those approved by the HSRC before the effectivity of R.A. No. 6657 on June 15, 1988, the DAR's clearance is no longer necessary for conversion.
• Agrarian Reform Beneficiaries Association (ARBA) vs. Nicolas, G.R. No. 168394, October 6, 2008, 567 SCRA 540 — Followed; arrived at a similar ruling citing Pasong Bayabas and Junio.
• Solmayor vs. Arroyo, 520 Phil. 854 (2006) — Controlling precedent; outlined the essential requisites of a tenancy relationship, all of which must concur.
• Del Castillo vs. Orciga, 532 Phil. 204 (2006) — Controlling precedent; explained that land transfer under P.D. No. 27 is effected in two stages: issuance of the CLT and issuance of the EP.
• Heirs of Dr. Jose Deleste vs. Land Bank of the Philippines, G.R. No. 169913, June 8, 2011, 651 SCRA 352 — Cited; discussed the power of local government units to reclassify lands and the preconditions for acquisition of full ownership under P.D. No. 27.
• Dela Cruz vs. Quiazon, G.R. No. 171961, November 28, 2008, 572 SCRA 681 — Cited; discussed the perfection of title under P.D. No. 27.
• Esquivel vs. Atty. Reyes, 457 Phil. 509 (2003) — Cited; discussed the requisites of tenancy relationship and the consequences of not being a de jure tenant.

• Section 3, R.A. No. 2264 (Local Government Code of 1959) — Empowered municipal and/or city officials to "adopt zoning and subdivision ordinances or regulations in consultation with the National Planning Commission"; applied to uphold the authority of the Davao City Council to adopt Ordinance No. 363, series of 1982.
• Section 3(c), R.A. No. 6657 (Comprehensive Agrarian Reform Law of 1988) — Defines agricultural lands as lands devoted to agricultural activity and not otherwise classified as mineral, forest, residential, commercial, or industrial land; applied to hold that the reclassified property is outside the coverage of the CARL.
• Section 4, R.A. No. 6657 — Provides that the CARL covers only public or private lands devoted or suitable for agriculture; applied to exclude the reclassified property.
• Section 7, R.A. No. 3844 (Agricultural Land Reform Code) — Provides that once the leasehold relation is established, the agricultural lessee is entitled to security of tenure and acquires the right to continue working on the landholding; the right ceases when the leasehold relation is extinguished or when the lessee is lawfully ejected.
• Section 8, R.A. No. 3844 — Enumerates the causes that extinguish the agricultural leasehold relation: abandonment, voluntary surrender, and absence of persons to succeed to the lessee.
• Section 10, R.A. No. 3844 — Provides that the mere expiration of the term or period in a leasehold contract, or the sale, alienation or transfer of the legal possession of the landholding, shall not extinguish the leasehold relation; in case of sale or transfer, the purchaser or transferee is subrogated to the rights and obligations of the landowner/lessor.
• Section 36(1), R.A. No. 3844, as amended by Section 7, R.A. No. 6389 — Provides that declaration by the department head, upon recommendation of the National Planning Commission, to be suited for residential, commercial, industrial or some other urban purposes, terminates the right of the agricultural lessee to continue in its possession and enjoyment.
• Section 3, Rule I, 1994 DARAB New Rules of Procedure — Provides that the DARAB shall not be bound by technical rules of procedure and evidence provided under the Rules of Court, and shall employ all reasonable means to ascertain the facts of every case; applied to relax the rules and consider the belatedly submitted HLURB certification.
• P.D. No. 27 — Deemed tenant-farmers of rice and corn agricultural lands owners of the land they till as of October 21, 1972; applied to hold that no vested rights accrued to the respondents absent CLTs and given that the property was not primarily devoted to rice and corn.
• DAR Administrative Order No. 1, series of 1990 — Defines "agricultural lands" as those devoted to agricultural activity and not classified in town plans and zoning ordinances as approved by the HLURB and its preceding competent authorities prior to 15 June 1988 for residential, commercial or industrial use; applied to exclude the reclassified property.
• DAR Administrative Order No. 5, series of 1994 — Cited by the DARAB as basis for holding that the alleged reclassification did not divest the respondents of their rights as "deemed owners" under P.D. No. 27; the SC rejected the DARAB's reliance on it.