Philcontrust Resources, Inc. vs. Santiago

The DARAB’s subject matter jurisdiction is determined by the material allegations of the complaint and the character of the reliefs prayed for, not by the landowner’s defense that the land is non-agricultural; and in administrative proceedings, a fair and reasonable opportunity to explain one’s side through pleadings satisfies procedural due process. A Rule 43 appeal filed beyond the 15-day extension allowed by Section 4, Rule 43 is properly dismissed, and a Rule 65 petition is not a substitute for the mandatory petition for review.

Respondents are members of Kapisanan ng mga Magsasaka sa Iruhin who claim agricultural tenancy over land in Barangay Iruhin West, Tagaytay City, while petitioner Philcontrust Resources, Inc. is the entity that the petition describes as holding title to the land. The dispute falls under the Comprehensive Agrarian Reform Program, with the DAR vested by R.A. No. 6657 and E.O. No. 229 with primary jurisdiction over agrarian reform matters and the DARAB created by E.O. No. 129-A to adjudicate agrarian disputes. Appeals from DARAB rulings to the CA are governed by Rule 43, which fixes the period and extensions for filing.

Respondents are members of Kapisanan ng mga Magsasaka sa Iruhin. On 20 February 2002, they filed a Complaint before the DARAB against petitioner, alleging that they and their predecessors had been agricultural tenants since 1935 over a 29-hectare land in Barangay Iruhin West, Tagaytay City, subdivided into 13 parcels and then owned by Marcela Macatangay. They cultivated the land with pineapple, coffee, banana, papaya, root crops, vegetables, and coconut, and paid lease rental at the rate of one-fifth of the net harvest through Macatangay’s administrator Melchor Senares and later through Mauricio Senares.

In 1994, petitioner, then known as Inter-Asia Development Corporation, informed respondents that it had acquired the land and ordered them to stop cultivating it. Petitioner promised disturbance compensation, but several meetings at the Office of the Punong Barangay to negotiate the terms proved futile. In August 2001, petitioner gave respondents notice to vacate and surrender their respective areas of tillage within 15 days. Respondents refused, saying that the land was covered by the Comprehensive Agrarian Reform Program and that they had been identified as potential farmer beneficiaries by the Municipal Agrarian Reform Officer of Tagaytay City. Their Complaint prayed that they be declared bona fide agricultural tenants, maintained in peaceful possession, that their lease rental with petitioner be fixed, and that petitioner be ordered to execute leasehold contracts with them.

Petitioner initially filed an Answer but later filed an Omnibus Motion that included a request for withdrawal of the Answer and for dismissal of the complaint on the grounds of forum shopping, lack of cause of action, and lack of jurisdiction. Petitioner claimed that the complaint was intended to offset the several ejectment cases it had filed against respondents before the MTCC, Tagaytay City, and that respondents were squatters whose occupation was merely tolerated. It also claimed that the complaint lacked the necessary certification from the Barangay Agrarian Reform Committee under Section 53 of R.A. No. 6657, and that the land had always been residential in nature, with some parcels located in conservation areas. Petitioner presented certifications from a former MARO, the National Irrigation Administration, the HLURB, and the Planning and Development Office of Tagaytay City.

On 7 October 2002, the Regional Agrarian Reform Adjudicator dismissed the complaint on the first and third grounds of the Omnibus Motion. Respondents moved for reconsideration, explaining that Honorio Borbon, who signed the complaint’s verification and certification against forum shopping, was the president of their organization and that their failure to attach their written authority for him to sign was due to mere inadvertence. They also pointed out that the authority to approve conversions of agricultural lands to non-agricultural belonged to the Secretary of the DAR. The motion was denied.

On respondents’ Notice of Appeal dated 1 October 2003, docketed as DARAB Case No. R-0402-003-2002, the DARAB reversed and set aside the adjudicator’s ruling. In its Decision dated 25 April 2005, the DARAB found that respondents had incurred vested rights over the subject land as a consequence of their tenancy relations with its previous owner, recognized them as agricultural tenants of petitioner’s property, and ordered that they be maintained in peaceful possession and cultivation thereof. The DARAB denied petitioner’s motion for reconsideration on 3 February 2006.

Petitioner sought relief from the CA. On 21 March 2006, it filed a Motion for Time in CA-G.R. SP No. 93735, stating that it had until 21 March 2006 to file an appeal under Rule 43 because it received notice of the ruling on its motion for reconsideration on 6 March 2006. It asked for an additional 30 days, or until 20 April 2006, due to the heavy workload of its counsel and because it was securing certified true copies of pertinent documents from the DARAB. The CA granted the request but only for 15 days in a Resolution dated 10 April 2006. Petitioner filed its appeal on 20 April 2006, the very last day of the extension it had prayed for, and on the same date received a copy of the CA’s 10 April 2006 Resolution. In the Resolution dated 19 June 2006, the CA dismissed the appeal for being filed beyond the extended period and noted other defects: the DARAB Decision and Resolution were in plain photocopy, contrary to Section 6(c), Rule 43, and there were no certified copies of the material portions of the record and other supporting papers. Petitioner’s motion for reconsideration was denied on 12 September 2006. The DARAB’s finding that respondents had incurred vested rights as agricultural tenants was the factual basis for its order maintaining them in possession and cultivation; the CA did not reach the merits and dismissed the appeal on technical grounds.

• Subject Matter Jurisdiction / Void Judgment: Petitioner argued that the DARAB Decision was void for having been rendered without subject matter jurisdiction because the land was not agricultural; it maintained that void judgments do not become executory and may be assailed at any time, and that the CA erred in relying on technical rules of procedure in dismissing the appeal.
• Due Process: Petitioner argued that the DARAB violated its right to due process because no formal hearing on the merits was conducted; the DARAB should have remanded the case to the adjudicator, since review of a dismissal order is limited to the propriety of the dismissal; it claimed it was denied the opportunity to file an answer, to have first and second preliminary conferences, and to file appeal and reply memoranda.
• Evidentiary Basis: Petitioner argued that there was no evidentiary basis for the DARAB’s conclusion that respondents were tenants, because no Answer and no further proceedings to receive evidence took place before the adjudicator or the DARAB.
• Appeal Period / Liberal Application: Petitioner argued that its appeal should be considered timely if reckoned within the 60-day period for a Rule 65 petition, since it alleged grave abuse of discretion and lack of jurisdiction; it also argued that the substantive merits should override technical rules and that the SC may suspend technical rules, including jurisdictional periods, to promote substantial justice.

• Technical Rules / Due Process: Respondents countered that the DARAB and its adjudicators are not bound by technical rules of procedure and evidence under Section 3, Rule I, 1994 DARAB Rules of Procedure, so petitioner’s complaints about foregone preliminary conferences and memoranda were misplaced.

• Appeal Period and Mode of Appeal: Whether the CA committed reversible error in dismissing petitioner’s Rule 43 petition for being filed beyond the extended period and in refusing to treat it as a Rule 65 petition.
• Subject Matter Jurisdiction: Whether the DARAB had subject matter jurisdiction over respondents’ complaint despite petitioner’s claim that the land was non-agricultural.
• Due Process: Whether the DARAB violated petitioner’s right to due process by deciding the case without a formal hearing and without the procedural incidents petitioner claimed.

• Appeal Period and Mode of Appeal: No. The CA correctly dismissed the Rule 43 petition filed beyond the extended period; Section 4, Rule 43 allows only an additional 15 days, and a Rule 65 petition is not a substitute for the mandatory petition for review.
• Subject Matter Jurisdiction: Yes. The DARAB had jurisdiction because the complaint’s material allegations and prayers asserted an agrarian tenancy dispute, regardless of petitioner’s defense that the land was non-agricultural.
• Due Process: No. Petitioner was not denied due process; administrative due process requires only a fair and reasonable opportunity to explain one’s side, which may be through pleadings, and petitioner had such opportunities.

• Appeal Period and Mode of Appeal: Section 4, Rule 43 requires an appeal to be taken within 15 days from notice of the award, judgment, final order, or resolution, and allows the CA, upon proper motion and payment of the full docket fee before the expiration of the reglementary period, to grant an additional period of 15 days only. No further extension shall be granted except for the most compelling reasons and in no case to exceed 15 days. The SC held that strict compliance with the Rules is indispensable for the orderly and speedy disposition of justice, and that petitioner’s 30-day request was incompatible with the prescribed period. Petitioner invoked liberality, but the SC held that a liberal and flexible application of technical rules must be bestowed not only for substantial justice but also for meritorious reasons. Under Asia United Bank vs. Goodland Company, Inc., the bench and bar are reminded of the primordial judicial policy of zealous compliance with the Rules; under Cu-Unjieng vs. CA, the mere invocation of substantial justice is not a magical incantation that will automatically compel suspension of procedural rules; and under Redena vs. CA, what constitutes good and sufficient cause for suspension is discretionary upon the courts. Petitioner’s reason—that it was securing certified true copies of documents from the DARAB and had no control over the speed of the DARAB staff—was found not compelling. The requested copies included petitioner’s own submissions and documents copy-furnished to it in the normal course of proceedings, which it should already have had. Petitioner did not explain why it needed certified copies of the adjudicator’s orders. Under Section 11, Rule VIII of the 1994 DARAB Rules of Procedure and the similar provision in the 2003 DARAB Rules, decisions become final after 15 days from receipt of a copy; petitioner did not allege or prove that it did not receive copies of the orders, so it was deemed duly furnished following the presumption of regularity in the performance of official duty. The SC saw no error in the CA’s finding that no compelling reason existed for the failure to seasonably file the appeal. On the Rule 65 argument, Villaran vs. DARAB held that Section 60 of R.A. No. 6657, read with R.A. No. 7902 and SC Circular No. 1-95, requires that judicial review of DARAB decisions be by petition for review under Rule 43, regardless of the nature of the question raised; under SC Circular No. 2-90, an appeal taken by a wrong or inappropriate mode warrants dismissal. The exceptions to the rule—public welfare, broader interest of justice, writs issued are null and void, or oppressive exercise of judicial authority—did not obtain. Spouses Bergonia vs. CA also held that the right to appeal is a statutory privilege that must be exercised in accordance with the Rules, and failure to comply loses the right. Thus, the CA’s dismissal was proper.

• Subject Matter Jurisdiction: The SC held that the subject matter jurisdiction of a quasi-judicial body such as the DARAB is determined by the material allegations of the complaint before it and the character of the reliefs prayed for, irrespective of whether the complainant is entitled to any or all such reliefs. Subject matter jurisdiction is conferred upon the quasi-judicial body by the Constitution and law, and not by the consent or waiver of the parties where the body otherwise would have no jurisdiction over the nature or subject matter of the action. The complaint alleged that respondents were tenants and cultivators of petitioner’s property since 1935; that the land was agricultural; that respondents and their predecessors had been paying lease rental to the previous owner at one-fifth of the net harvest; that petitioner, the new owner, had ordered them to stop cultivating the land and surrender its possession and offered disturbance compensation; and that respondents refused because the property was covered by the agrarian reform program and they were potential beneficiaries. As reliefs, the complaint prayed that respondents be declared petitioner’s agricultural tenants and that the amounts respondents were to pay petitioner as lease rental be fixed. These allegations and prayers clearly indicated an agrarian dispute, a subject matter within the competence of the DARAB and its adjudicators. Section 50 of R.A. No. 6657 and Section 17 of E.O. No. 229 confer upon the DAR the primary and exclusive jurisdiction, both original and appellate, to determine and adjudicate all matters involving the implementation of agrarian reform. Through E.O. No. 129-A, the DARAB was created to assume the powers and functions of the DAR pertaining to the adjudication of agrarian reform cases. The 1994 DARAB Rules of Procedure, prevailing at the time the complaint was filed, provided that the Board shall have primary and exclusive jurisdiction, both original and appellate, to determine and adjudicate all agrarian disputes involving the implementation of the Comprehensive Agrarian Reform Program, including the rights and obligations of persons engaged in the management, cultivation, and use of all agricultural lands covered by the CARP and other agrarian laws, and the fixing and collection of lease rentals and disturbance compensation. The SC also held that jurisdiction cannot be made to depend on the answer of the defendant or the agreement or waiver of the parties. In Laynesa vs. Uy, the SC had ruled that the DARAB retains jurisdiction over disputes arising from agrarian reform matters even though the landowner or defendant interposes the defense that the land involved has been reclassified from agricultural to non-agricultural use. Petitioner’s claim that the DARAB had declared the subject land non-agricultural was rejected: the passage petitioner cited was subjunctive and hypothetical, not declarative, and the DARAB itself expressly stated that it was not within its competence to determine whether a piece of land was agricultural or not, as that determination was with the DAR Secretary. Even if the DARAB had actually made such a declaration, it would have been acting outside its jurisdiction. Petitioner’s certifications from a former MARO, the Department of Agriculture, HLURB Region IV, and the City Planning and Development Office of Tagaytay City were insufficient because what was fatally missing was a zoning ordinance duly issued by the local government and approved by the HLURB on the reclassification of the subject land as residential; even if such an ordinance had been secured and presented, it would not operate to oust the DARAB of jurisdiction under Laynesa vs. Uy. Also missing was an exemption clearance issued by the DAR Secretary, without which petitioner would not be allowed to change the land’s use from agricultural to non-agricultural even if it had already been reclassified by the local government via a zoning ordinance. As to the ejectment cases, the SC noted that the consolidated decision’s docket numbers differed from those petitioner cited in its Omnibus Motion, the sets of respondents were not exactly the same, and the petition’s vague description of the subject land made it impossible to ascertain whether it was the same land involved in the ejectment cases; thus, those cases had no significant bearing on the case at bar. The DARAB therefore obtained a foothold to take cognizance of the complaint, and its decision was not void for lack of subject matter jurisdiction.

• Due Process: Petitioner’s claim that the DARAB violated due process rested chiefly on the fact that no formal hearing on the merits was conducted. Petitioner acknowledged that it was due to its own motion that the adjudicator had dismissed the complaint, thereby obviating a formal hearing at that stage, but contended that the DARAB should have remanded the case to the adjudicator for a formal hearing. The SC held that the burden of proving that respondents had tenancy rights rested on respondents, the party that had alleged it; if such evidence were lacking, the blame should fall on respondents’ complaint, not on petitioner’s Answer or alleged lack thereof. It was not true that petitioner was denied the opportunity to file an Answer, because petitioner had in fact filed an Answer with the adjudicator but later requested its withdrawal via an Omnibus Motion; petitioner should not be heard to say that it was deprived of the chance to file an Answer. It was also not true that there was no evidence on record of respondents’ tenancy rights, because the sworn affidavits of respondents and their witness, attached as annexes “A” and “B” of the complaint, were submitted precisely in support of that factual allegation. As the case was a Rule 45 review, the SC generally could not calibrate the evidence presented below, but it was satisfied that evidence of respondents’ tenancy rights was present in the DARAB records. In Villaran vs. DARAB, the SC held that in administrative proceedings, a fair and reasonable opportunity to explain one’s side suffices to meet the requirements of due process; the essence of procedural due process is notice and a real opportunity to be heard, and in administrative proceedings this simply means the opportunity to explain one’s side or the opportunity to seek a reconsideration of the action or ruling complained of. “To be heard” does not mean only verbal arguments in court; one may be heard also through pleadings. Petitioner certainly availed of the ample opportunities it had been given to present its side: it had filed an Answer and an Omnibus Motion with the adjudicator, and a motion for reconsideration with the DARAB. Thus, it should not be said that it was deprived of due process. Moreover, the DARAB and its adjudicators are not bound by technical rules of procedure and evidence under Section 3, Rule I of the 1994 DARAB Rules of Procedure, a precautionary measure retained by the 2003 DARAB Rules of Procedure. Given that the DARAB is mandated by its own rules to resolve cases expeditiously, unhampered by technical rules, petitioner’s lamentations involving foregone preliminary conferences and foregone submissions of reply and/or appeal memoranda were woefully out of place. The case cited by petitioner, Paranaque Kings Enterprises, Incorporated vs. CA, was not availing because the tribunal involved there was a trial court which, by its very nature, must cleave to procedural laws; the Rules of Court does not provide that courts are not bound by the technical rules of procedure and evidence that it contains. All told, petitioner had not been denied due process in the DARAB proceedings.

• Subject matter jurisdiction determined by the complaint — For a quasi-judicial body like the DARAB, jurisdiction is determined by the material allegations of the complaint and the character of the reliefs prayed for, irrespective of whether the complainant is entitled to them; it is conferred by law and cannot be conferred by consent or waiver. The SC applied this by looking at respondents’ allegations of tenancy and prayers for tenancy-related reliefs, not petitioner’s non-agricultural defense.
• DARAB jurisdiction over agrarian disputes despite reclassification defense — Under Laynesa vs. Uy, the DARAB retains jurisdiction over a complaint whose averments pertain to an agrarian dispute even if the landowner or defendant claims the land has been reclassified as non-agricultural. The SC applied this to reject petitioner’s claim that the land’s residential character ousted DARAB jurisdiction.
• Administrative due process — In administrative proceedings, procedural due process means a fair and reasonable opportunity to explain one’s side or to seek reconsideration; “to be heard” includes submission of pleadings, not only oral argument. The SC applied this because petitioner filed an Answer, an Omnibus Motion, and a motion for reconsideration.
• DARAB not bound by technical rules — The DARAB and its adjudicators are not bound by technical rules of procedure and evidence and must decide agrarian cases expeditiously. The SC applied this to reject petitioner’s due process complaints about the lack of preliminary conferences and appeal/reply memoranda.
• Strict compliance with Rule 43; limited extension — An appeal from a quasi-judicial agency to the CA under Rule 43 must be filed within 15 days from notice; the CA may grant only an additional 15 days upon proper motion and payment of docket fees, and no further extension except for the most compelling reasons and never exceeding 15 days. The SC applied this to hold that petitioner’s 30-day request was incompatible with the rule and its appeal was late.
• Liberal application requires substantial justice and meritorious reasons — The mere invocation of substantial justice does not automatically compel suspension of procedural rules; the party must plead both substantial justice and meritorious reasons. The SC applied this to reject petitioner’s plea for liberality because its reason for extension was not compelling.
• Right to appeal is statutory — The right to appeal is not a natural right or part of due process but a statutory privilege that must be exercised in accordance with the Rules; failure to comply loses the right. The SC applied this to affirm the dismissal.
• Wrong mode of appeal — A petition for certiorari under Rule 65 is not a substitute for the mandatory petition for review under Rule 43 from DARAB decisions; an appeal by wrong mode warrants dismissal. The SC applied this to reject petitioner’s Rule 65 argument.

• "It is axiomatic that the subject matter jurisdiction of a quasi-judicial body such as the DARAB is determined by the material allegations of the complaint before it and the character of the reliefs prayed for, irrespective of whether the complainant is entitled to any or all such reliefs." — The SC uses this to uphold DARAB jurisdiction based on the complaint’s tenancy allegations rather than petitioner’s defense.
• "Section 4 of Rule 43 limits the extension the appellate court may grant for the filing of an appeal. Clearly, the thirty-day extension that petitioner requested of the CA is incompatible with the prescribed period." — The SC uses this to reject the 30-day extension and affirm the CA’s dismissal.
• "The essence of procedural due process is embodied in the basic requirement of notice and a real opportunity to be heard. In administrative proceedings, such as in the case at bar, procedural due process simply means the opportunity to explain one's side or the opportunity to seek a reconsideration of the action or ruling complained of. \"To be heard\" does not mean only verbal arguments in court; one may be heard also thru pleadings. Where opportunity to be heard, either through oral arguments or pleadings, is accorded, there is no denial of procedural due process." — The SC adopts this from Villaran vs. DARAB to hold that petitioner’s due process claim fails.
• "Under Supreme Court Circular No. 2-90, moreover, an appeal taken to the Supreme Court or the Court of Appeals by a wrong or inappropriate mode warrants a dismissal." — The SC quotes Villaran vs. DARAB to reject petitioner’s attempt to treat its Rule 43 appeal as a Rule 65 petition.

• Villaran vs. DARAB, 683 Phil. 536 (2012) — Controlling precedent: Rule 43 is the proper mode of review from DARAB decisions; wrong mode warrants dismissal; administrative due process is satisfied by an opportunity to explain through pleadings.
• Laynesa vs. Uy, 570 Phil. 516 (2008) — Controlling precedent: DARAB retains jurisdiction over agrarian disputes despite the defense that the land has been reclassified as non-agricultural.
• Asia United Bank vs. Goodland Company, Inc., 650 Phil. 174 (2010) — Cited for the rule that liberal application of the Rules requires both substantial justice and meritorious reasons, alongside zealous compliance.
• Cu-Unjieng vs. CA, 515 Phil. 568 (2006) — Cited for the rule that mere invocation of substantial justice does not automatically compel suspension of procedural rules.
• Redena vs. CA, 543 Phil. 358 (2007) — Cited for the rule that what constitutes good and sufficient cause for suspending procedural rules is discretionary upon the courts.
• Spouses Bergonia vs. CA, 680 Phil. 334 (2012) — Cited for the rule that the right to appeal is a statutory privilege that must be exercised in accordance with the Rules; noncompliance loses the right.
• Paranaque Kings Enterprises, Incorporated vs. CA, 335 Phil. 1184 (1997) — Distinguished: its rule that review of a dismissal is limited to the propriety of the dismissal applied to a trial court bound by procedural rules, not to the DARAB.
• Vda. De Herrera vs. Bernardo, 665 Phil. 234 (2011) — Cited for the rule that subject matter jurisdiction is determined by the material allegations of the complaint and the character of the reliefs prayed for.

• Section 4, Rule 43, Rules of Court — Fixes the 15-day appeal period from notice and allows the CA to grant only an additional 15 days upon proper motion and payment of docket fees, with no further extension except for the most compelling reasons and never exceeding 15 days; applied to reject petitioner’s 30-day request and affirm the dismissal.
• Section 50, R.A. No. 6657 — Vests the DAR with primary jurisdiction to determine and adjudicate agrarian reform matters and exclusive original jurisdiction over implementation matters; applied to hold that the DARAB had jurisdiction over respondents’ agrarian dispute.
• Section 17, E.O. No. 229 — Confers on the DAR primary and exclusive jurisdiction over agrarian reform matters; cited with Section 50, R.A. No. 6657 to support DARAB jurisdiction.
• E.O. No. 129-A — Created the DARAB to assume the DAR’s powers and functions over adjudication of agrarian reform cases; applied to explain the DARAB’s authority.
• Section 3(d), R.A. No. 6657 — Defines an agrarian dispute as a controversy relating to tenurial arrangements over agricultural lands, including leasehold and tenancy; applied because respondents’ complaint alleged tenancy and lease rental issues.
• Section 3, Rule I, 1994 DARAB Rules of Procedure — Provides that the DARAB and its adjudicators are not bound by technical rules of procedure and evidence; applied to reject petitioner’s due process complaints about the lack of preliminary conferences and memoranda.
• Section 11, Rule VIII, 1994 DARAB Rules of Procedure; Section 11, Rule X, 2003 DARAB Rules of Procedure — Provide that decisions, orders, or rulings disposing of the case on the merits become final after 15 days from receipt of a copy; applied to presume petitioner received the adjudicator’s orders and to reject its claimed need for certified copies.
• Section 60, R.A. No. 6657; R.A. No. 7902; SC Circular No. 1-95; SC Circular No. 2-90 — Cited through Villaran vs. DARAB to establish that judicial review of DARAB decisions is by Rule 43 petition for review and that a wrong mode of appeal warrants dismissal.