Sta. Rosa Realty Development Corporation vs. Amante

Lands classified as agricultural at the time of the enactment of a zoning ordinance remain subject to the Comprehensive Agrarian Reform Program (CARP) despite subsequent zoning classifications as non-agricultural, where the ordinance does not provide for retroactive application and the land continues to be used for agricultural purposes; furthermore, a party who actively participates in proceedings before a quasi-judicial body by invoking its jurisdiction and presenting evidence is estopped from later impugning that body's jurisdiction.

The dispute centers on portions of the Canlubang Estate in Laguna, previously part of the vast landholdings of the Yulo family. The subject properties, covered by Transfer Certificates of Title Nos. 81949 and 84891 (254.766 hectares), were titled in the name of Sta. Rosa Realty Development Corporation (SRRDC). Since the early 1900s, the land had been occupied and cultivated by residents and farmers (including ancestors of the Amante group) who planted fruit-bearing trees and other crops. In 1985, conflicts arose when SRRDC fenced the area and attempted to evict the occupants, leading to parallel civil suits for injunction and ejectment, even as the Department of Agrarian Reform initiated compulsory acquisition proceedings in 1989.

• The subject properties consist of two parcels of land located in Barangay Casile, Cabuyao, Laguna, covered by TCT Nos. 81949 and 84891, with a total area of 254.766 hectares, registered in the name of Sta. Rosa Realty Development Corporation (SRRDC), a majority stockholder of which is C.J. Yulo and Sons, Inc.
• The properties were part of the Canlubang Sugar Estate and had been occupied and cultivated by residents and farmers (including predecessors-in-interest of Amante, et al.) since 1910, who built houses and planted fruit-bearing trees, coconut, coffee, and pineapple.
• In November 1979, the Municipality of Cabuyao enacted Municipal Ordinance No. 110-54 classifying Barangay Casile as a "municipal park," approved by the Housing and Land Use Regulatory Board (HLURB) in 1980.
• In August 1989, the Municipal Agrarian Reform Office issued a Notice of Coverage to SRRDC, scheduling the properties for compulsory acquisition under the Comprehensive Agrarian Reform Program (CARP).
• SRRDC filed a protest alleging that the land was not agricultural (being zoned as park and alleged to be part of a watershed), had slopes of 18% and above, and that occupants were squatters not qualified as beneficiaries.
• DARAB proceedings established through ocular inspections and certifications that the land had flat to undulating topography with 3-15% slopes, was suitable for agriculture, and was actually cultivated with diversified crops.
• On December 19, 1991, the DARAB dismissed SRRDC's protest and affirmed compulsory coverage.
• Parallel civil litigation occurred: (1) an injunction case filed by Amante, et al. in 1985 to stop SRRDC from fencing and demolishing structures, which the RTC dismissed on January 20, 1992, ordering plaintiffs to vacate; and (2) ejectment cases filed by SRRDC in 1986-1987, which the RTC dismissed on February 18, 1992 for lack of jurisdiction (agrarian nature), and the Court of Appeals subsequently dismissed on January 17, 1995 for lack of prior possession by SRRDC.
• SRRDC failed to present evidence supporting its claims of exemption during DARAB proceedings despite being granted continuances, and only raised such evidence (watershed certifications, slope assessments) during the petition for review before the Court of Appeals.

• SRRDC (in G.R. No. 112526): Contended that the Court of Appeals committed grave abuse of discretion in ruling that the properties are covered by CARP despite being classified as "park" since 1979 under the Cabuyao Zoning Ordinance and HLURB Resolution No. 38-2; argued that the properties form part of the Kabangaan-Casile watershed and are therefore exempt; claimed the properties have slopes of 18% and above exempting them under Section 10 of R.A. No. 6657; asserted that Amante, et al. are squatters and not qualified beneficiaries; questioned the constitutionality of Section 22 of R.A. No. 6657 for including "landless residents" as beneficiaries allegedly in violation of Article XIII, Section 4 of the Constitution; and challenged the DARAB's jurisdiction to determine whether the properties are subject to CARP coverage.
• Amante, et al. (in G.R. No. 118838): Argued that they cannot be lawfully evicted as they are already registered owners under the Torrens system by virtue of the CARP and the issuance of CLOAs on February 26, 1992; claimed entitlement to moral, exemplary damages and attorney's fees instead of mere nominal damages; and asserted that respondents cannot raise the issue of ownership in the injunction case as it must be ventilated in a separate action.

• Amante, et al. (in G.R. No. 112526): Argued that compelling reasons existed to grant the second motion for reconsideration, including that the October 12, 2001 Decision improperly reviewed findings of fact without falling under recognized exceptions, remanded the case to DARAB despite prior definitive findings that the land was CARPable, and renewed a temporary restraining order allegedly barred by Section 55 of R.A. No. 6657.
• DAR/DARAB (through the Office of the Solicitor General): Did not object to the second motion for reconsideration and maintained that if the property is indeed a watershed, the Department of Environment and Natural Resources should exercise control, but noted that the property had been found agricultural and distributed to beneficiaries.
• SRRDC (in G.R. No. 118838): Insisted that there were no compelling reasons to grant the second motion for reconsideration and maintained its position that the property was exempt from CARP coverage as a watershed and municipal park.

• Procedural Issues:
  • Whether the Supreme Court properly granted the second motion for reconsideration and reviewed factual findings in a petition for certiorari under recognized exceptions.
  • Whether SRRDC is estopped from questioning the DARAB's jurisdiction after actively participating in the proceedings and invoking the same.
• Substantive Issues:
  • Whether the subject properties are agricultural lands covered by CARP despite being zoned as a municipal park.
  • Whether the properties are exempt from CARP coverage as part of a watershed area.
  • Whether the properties are exempt from CARP coverage due to having slopes of 18% and above.
  • Whether the DARAB had jurisdiction to determine the issue of CARP coverage.
  • Whether Section 22 of R.A. No. 6657 is unconstitutional for including "landless residents" as beneficiaries.
  • Whether the CLOAs issued to Amante, et al. are valid and entitle them to peaceful possession.
  • Whether the trust account opened for just compensation should be converted to a deposit account with interest.

• Procedural:
  • The Court held that it may review factual findings in a petition for certiorari when the factual inferences of the appellate court are manifestly mistaken, the judgment is based on a misapprehension of facts, or the appellate court manifestly overlooked certain relevant and undisputed facts that, if properly considered, would justify a different legal conclusion.
  • The Court ruled that SRRDC is estopped from questioning the DARAB's jurisdiction because it expressly invoked such jurisdiction by filing a petition dated March 18, 1991 asking the DARAB to take cognizance of the issue of CARP coverage, and actively participated in the hearings by submitting evidence and having its counsel testify, thereby recognizing the body's jurisdiction and willingness to abide by its resolution.
• Substantive:
  • Nature of Land: The properties remain agricultural and covered by CARP. Municipal Ordinance No. 110-54 (1979) classifying Barangay Casile as a municipal park does not retroactively convert existing agricultural lands, especially where the land was already agricultural (sugar land) at the time of the ordinance and continues to be used for agriculture. The zoning ordinance should be given prospective operation only.
  • Watershed Exemption: The properties are not exempt as watersheds. Under DAR Administrative Order No. 13, to be exempt, land must be "actually, directly and exclusively used and found to be necessary" for watershed purposes. At the time of coverage, the properties were not officially classified or proclaimed as watersheds (the DENR certified that the only declared watershed in Laguna is the Caliraya-Lumot Rivers) and were long used for agricultural purposes.
  • Slope Exemption: Even assuming the properties have slopes of 18% and above, they are not exempt because under DAR Administrative Order No. 13, lands with 18% slope and over but already developed for agricultural purposes as of June 15, 1988, may be allocated to qualified occupants. The evidence showed the land has 5-10% slopes and is planted with diversified crops.
  • Jurisdiction: While the DAR Secretary has exclusive jurisdiction over classification and identification of landholdings for CARP coverage, SRRDC invoked the DARAB's jurisdiction by filing a petition asking it to resolve the issue of coverage, and is therefore estopped from questioning it. The issue was raised by SRRDC only before the Court of Appeals, not at the earliest opportunity before the DARAB.
  • Constitutionality: The Court declined to rule on the constitutional challenge to Section 22 of R.A. No. 6657 because SRRDC raised it only before the Supreme Court and not at the earliest opportunity (before the DAR Secretary), and the constitutional question is not the lis mota of the case.
  • Validity of CLOAs: The CLOAs issued to Amante, et al. are valid. The DAR Secretary had already determined the properties were subject to CARP and identified the beneficiaries. The transfer certificates of title in the name of the Republic and the CLOAs in the names of Amante, et al. must be upheld, and SRRDC is enjoined from disturbing their peaceful possession.
  • Just Compensation: Following Land Bank of the Philippines v. Wycoco, the trust account opened by Land Bank should be converted to a deposit account retroactively, earning 12% interest per annum from the time the trust account was opened until actual conversion into cash and LBP bonds deposit accounts.

• Prospective Application of Zoning Ordinances — Zoning ordinances converting land classifications should be given prospective application only and should not change the nature of existing agricultural lands in the area or the legal relationships existing over such lands. An ordinance does not retroactively affect the agricultural nature of land already devoted to such purpose at the time of enactment.
• Active Participation as Estoppel — Active participation of a party in proceedings before a court or quasi-judicial body, including invoking its jurisdiction and presenting evidence, is tantamount to recognition of that body's jurisdiction and will bar said party from later impugning such jurisdiction.
• Exhaustion of Administrative Remedies/Constitutional Challenge — Constitutional questions must be raised at the earliest opportunity in the pleadings before a competent court that can resolve the same; they cannot be raised for the first time on appeal. The Court will not entertain constitutional challenges to statutes where the issue was not specifically raised, insisted upon, and adequately argued in the administrative proceedings below.
• Judicial Review of Factual Findings — While the Supreme Court is not a trier of facts, it may review factual findings when the inferences of the appellate court are manifestly mistaken, the judgment is based on a misapprehension of facts, or relevant and undisputed facts were overlooked that would justify a different conclusion.

• "A sensu contrario, the landholdings subject herein are not [watersheds]."
• "It is elementary that the active participation of a party in a case pending against him before a court or a quasi-judicial body, is tantamount to a recognition of that court’s or body’s jurisdiction and a willingness to abide by the resolution of the case and will bar said party from later on impugning the court’s or body’s jurisdiction."
• "This simply means that, if we apply the general rule, as we must, the ordinance should be given prospective operation only. The further implication is that it should not change the nature of existing agricultural lands in the area or the legal relationships existing over such lands."
• "If SRRDC sincerely wants to preserve the property for ecological considerations, it can be done regardless of who owns it. After all, we are all stewards of this earth, and it rests on all of us to tend to it."

• Natalia Realty, Inc. v. Department of Agrarian Reform — Distinguished; held that lands not devoted to agricultural activity and not classified as mineral or forest prior to R.A. No. 6657 are outside CARP coverage. The Court found this inapplicable because the subject properties were already agricultural when the zoning ordinance was enacted.
• Co v. Intermediate Appellate Court — Cited for the rule that zoning ordinances should be given prospective application only and should not change the nature of existing agricultural lands.
• Central Mindanao University v. Department of Agrarian Reform Adjudication Board — Distinguished; held that CMU was in the best position to determine what property is necessary for its educational use. The Court found this inapplicable because the subject properties were not reserved for watershed purposes from the beginning and were not actually and exclusively used for such purpose.
• Land Bank of the Philippines v. Wycoco — Followed; held that DAR Administrative Circular No. 9 providing for trust accounts is void, and trust accounts should be converted to deposit accounts with 12% interest.
• Lapanday Agricultural & Development Corp. v. Estita and Centeno v. Centeno — Cited for the doctrine that active participation in proceedings estops a party from questioning jurisdiction.
• Lercana v. Jalandoni — Cited for the rule that identification and selection of CARP beneficiaries are matters involving strictly the administrative implementation of CARP, exclusively cognizable by the Secretary of the DAR.

• Section 3(b) and (c), R.A. No. 6657 (Comprehensive Agrarian Reform Law) — Definitions of "agricultural activity" and "agricultural land."
• Section 10, R.A. No. 6657 — Exemption of lands with 18% slope and over from CARP coverage, except those already developed for agricultural purposes as of June 15, 1988.
• Section 15, R.A. No. 6657 — Registration of beneficiaries, vesting exclusive authority in the DAR Secretary to identify and select beneficiaries.
• Section 22, R.A. No. 6657 — Definition of qualified beneficiaries; constitutional challenge to this provision was rejected for being raised too late.
• Section 50, R.A. No. 6657 — Quasi-judicial powers of the DAR and exclusive original jurisdiction over agrarian reform matters.
• DAR Administrative Order No. 13, Series of 1990 — Rules governing exemption of lands from CARP coverage under Section 10; provides that lands with 18% slope and over but already developed for agricultural purposes as of June 15, 1988, may be allocated to qualified occupants.
• DAR Administrative Order No. 06-00 — Rules of Procedure for Agrarian Law Implementation (ALI) Cases; vests exclusive jurisdiction in the DAR Secretary over classification and identification of landholdings for CARP coverage.
• Section 20, R.A. No. 7160 (Local Government Code) — Basis for local government power to reclassify lands.