SECOND DIVISION
G.R. Nos. 148404-05 April 11, 2002NELITA M. BACALING, represented by her attorney-in-fact JOSE JUAN TONG, and JOSE JUAN TONG, in his personal capacity, petitioners,
vs.
FELOMINO MUYA, CRISPIN AMOR, WILFREDO JEREZA, RODOLFO LAZARTE and NEMESIO TONOCANTE, respondents.
DE LEON, JR., J.:
Before us is a Petition for Review of the consolidated Decision1 dated January 31, 2001 of the Court of Appeals2 in CA-G.R. SP No. 54413,3 and in CA-G.R. SP No. 54414,4 and of its Resolution5 dated June 5, 2001 reversing the Decision6 dated May 22, 1998 and Resolution July 22, 1999 of the Office of the President.
The facts of the case are as follows:
Petitioner Nelita M. Bacaling and her spouse Ramon
Bacaling were the owners of three (3) parcels of land, with a total area
of 9.9631 hectares, located in Barangay Cubay, Jaro, Iloilo City, and
designated as Lot No. 2103-A (Psd-24069), Lot No. 2103-B-12 (Psd 26685)
and Lot No. 2295. These lots were duly covered by Transfer Certificates
of Title Nos. T-5801, T-5833 and T-5834, respectively. In 1955 the
landholding was subdivided into one hundred ten (110) sub-lots covered
by TCT Nos. T-10664 to T-10773, inclusive of the Registry of Deeds of
the City of Iloilo. On May 16, 1955, the landholding was processed and
approved as "residential" or "subdivision" by the National Urban
Planning Commission (NUPC).7
On May 24, 1955 the Bureau of Lands approved the corresponding
subdivision plan for purposes of developing the said property into a
low-cost residential community which the spouses referred to as the Bacaling-Moreno Subdivision.8
In 1957, a real estate loan of Six Hundred Thousand
Pesos (P600,000.00) was granted to the spouses Nelita and Ramon Bacaling
by the Government Service Insurance System (GSIS) for the development
of the subdivision.9
To secure the repayment of the loan, the Bacalings executed in favor of
the GSIS a real estate mortgage over their parcels of land including
the one hundred ten (110) sub-lots.10 Out of the approved loan of Six Hundred Thousand Pesos (P600,000.00), only Two Hundred Forty Thousand Pesos (P240,000.00) was released to them.11 The Bacalings failed to pay the amortizations on the loan and consequently the mortgage constituted on the one hundred ten (110) sub-lots was foreclosed by the GSIS.12 After a court case that reached all the way to this Court,13
Nelita Bacaling (by then a widow) in 1989 was eventually able to
restore to herself ownership of the one hundred ten (110) sub-lots.14
According to the findings of the Office of the
President, in 1972 and thereafter, respondents Felomino Muya, Crispin
Amor, Wilfredo Jereza, Rodolfo Lazarte and Nemesio Tonocante
clandestinely entered and occupied the entire one hundred ten (110)
sub-lots (formerly known as Lot No. 2103-A, Lot No. 2103-B-12 and Lot
No. 2295) and grabbed exclusively for themselves the said 9.9631 hectare
landholding.15
Apparently, respondents took advantage of the problematic peace and
order situation at the onset of martial law and the foreclosure of the
lots by GSIS.16
They sowed the lots as if the same were their own, and altered the
roads, drainage, boundaries and monuments established thereon.17
Respondents, on the other hand, claim that in 1964
they were legally instituted by Bacaling's administrator/overseer as
tenant-tillers of the subject parcels of land on sharing basis with two
and a half (2½) hectares each for respondents Muya, Amor, Tonocante and
Lazarte, and one and a half (1½) hectares for respondent Jereza. In
1974, their relationship with the landowner was changed to one of
leasehold. They religiously delivered their rental payments to Bacaling
as agricultural lessor. In 1980, they secured certificates of land
transfer in their names for the one hundred ten (110) sub-lots. They
have made various payments to the Land Bank of the Philippines as
amortizing owners-cultivators of their respective tillage.
In 1977, however, the City Council of Iloilo enacted
Zoning Ordinance No. 212 declaring the one hundred ten (110) sub-lots as
"residential" and "non-agricultural," which was consistent with the
conversion effected in 1955 by the NUPC and the Bureau of Lands. In
1978, Nelita Bacaling was able to register the subject property as the
Bacaling-Moreno Subdivision with the National Housing Authority and to
obtain therefrom a license to sell the subject one hundred ten (110)
sub-lots comprising the said subdivision to consummate the original and
abiding design to develop a low-cost residential community.
In August 21, 1990, petitioner Jose Juan Tong,
together with Vicente Juan and Victoria Siady, bought from Nelita
Bacaling the subject one hundred ten (110) sub-lots for One Million
Seven Hundred Thousand Pesos (P1,700,000.00).18
The said sale was effected after Bacaling has repurchased the subject
property from the Government Service Insurance System. To secure
performance of the contract of absolute sale and facilitate the transfer
of title of the lots to Jose Juan Tong, Bacaling appointed him in 1992
as her attorney-in-fact, under an irrevocable special power of attorney
with the following mandate-
1. To file, defend and prosecute any case/cases
involving lots nos. 1 to 110 covered by TCT Nos. T-10664 to T-10773 of
the Register of Deeds of the City of Iloilo;
2. To assume full control, prosecute, terminate and
enter into an amicable settlement and compromise agreement of all cases
now pending before the DARAB, Region VI, Iloilo City, which involved
portion of Lots 1 to 110, covered by TCT Nos. T-10664 to T-10773 of the
Register of Deeds of Iloilo City, which were purchased by Jose Juan
Tong, Vicente Juan Tong and Victoria Siady;
3. To hire a lawyer/counsel which he may deem fit and
necessary to effect and attain the foregoing acts and deeds; handle and
prosecute the aforesaid cases;
4. To negotiate, cause and effect a settlement of occupation and tenants on the aforesaid lots;
5. To cause and effect the transfer of the aforesaid lots in the name of the VENDEES;
6. To execute and deliver document/s or instrument of whatever nature necessary to accomplish the foregoing acts and deeds.19
It is significant to note that ten (10) years after
the perfection and execution of the sale, or on April 26, 2000, Bacaling
filed a complaint to nullify the contract of sale. The suit was,
however, dismissed with prejudice and the dismissal has long become
final and executory.20
Following the sale of the one hundred ten (110)
sub-lots and using the irrevocable special power of attorney executed in
his favor, petitioner Tong (together with Bacaling) filed a petition
for cancellation of the certificates of land transfer against
respondents and a certain Jaime Ruel with the Department of Agrarian
Reform (DAR) Region VI Office in Iloilo City.21
The DAR, however, dismissed the petition on the ground that there had
been no legitimate conversion of the classification of the 110 sub-lots
from agricultural to residential prior to October 21, 1972 when
Operation Land Transfer under P.D. No. 72 took effect.22 Bacaling and Tong appealed to the DAR Central Office but their appeal was similarly rejected.23 The motion for reconsideration failed to overturn the ruling of the Central Office Order.24
On September 19, 1997, Bacaling and Tong appealed the
adverse DAR Orders to the Office of the President which reversed them
in toto in a Decision25 dated May 22, 1998 (OP Decision, for brevity), the dispositive portion of which reads:
WHEREFORE, premises [considered], the assailed order
of the Regional Director, DAR Region VI, dated April 3, 1996, as well
as the orders of the DAR Secretary dated December 12, 1996 and September
4, 1997, are hereby REVERSED AND SET ASIDE and subject landholdings
declared exempt from coverage of the CARL. The Certificates of Land
Transfer (CLTs) issued to the appellees are hereby cancelled and the
Department of Agrarian Reform directed to implement the voluntary offer
made by appellant with respect to the payment of disturbance
compensation and relocation of the affected parties. 1âwphi1.nêt
SO ORDERED.26
The OP Decision found that the one hundred ten (110)
parcels of land had been completely converted from agricultural to
residential lots as a result of the declarations of the NUPC and the
Bureau of Lands and the factual circumstances, i.e., the GSIS loan with
real estate mortgage, the division of the original three (3) parcels of
land into one hundred ten (110) sub-lots under individual certificates
of title, and the establishment of residential communities adjacent to
the subject property, which indubitably proved the intention of Nelita
and Ramon Bacaling to develop a residential subdivision thereon. The OP Decision also
categorically acknowledged the competence of the NUPC and the Bureau of
Lands to classify the one hundred ten (110) sub-lots into residential
areas. On July 22, 1999, separate motions for reconsideration thereof
were denied.27
Respondents elevated the OP Decision to the Court of
Appeals on a petition for review under Rule 43 of the Rules of Civil
Procedure.28
Before the petition was resolved, or on December 2, 1999, Nelita
Bacaling manifested to the appellate court that she was revoking the
irrevocable power of attorney in favor of Jose Juan Tong and that she
was admitting the status of respondents as her tenants of the one
hundred ten (110) sub-lots which allegedly were agricultural in
character. The manifestation was however characterized by an obvious
streak of ambivalence when her prayer therein urged the Court of Appeals
to decide the case, curiously, "on the basis of the clear intent of
Private Respondent" and "in accordance with the perception of this
Honorable Court."29
On January 31, 2001 the Court of Appeals reversed the OP Decision and
validated the certificates of land transfers in favor of respondents
without however promulgating a ruling on petitioner Tong's supposedly
ensuing lack of material interest in the controversy as a result of the
manifestation.30 The dispositive portion of the decision reads:
WHEREFORE, premises considered, petition is GRANTED;
and the May 22, 1998 Decision of the Office of the President is hereby
REVERSED and SET ASIDE. The April 3, 1996 Order of the Regional
Director, DARAB, Region VI, is REINSTATED.31
The appellate court refused to recognize the 1955
NUPC and Bureau of Lands classification of the subject lots as
residential subdivision. Tong moved for reconsideration of the CA Decision which
Bacaling did not oppose despite her manifestation. On June 5, 2001,
again without a single reference to Bacaling's alleged repudiation of
Tong's actions, the Court of Appeals denied reconsideration of its
decision,32 Hence, this petition for review on certiorari based on the following assignment of errors:
I
SUBJECT LANDHOLDINGS ARE EXEMPT FROM THE COVERAGE OF
P.D. 27 AND OPERATION LAND TRANSFER (1972, AS WELL (sic) THE
COMPREHENSIVE AGRARIAN REFORM LAW (1988) AS THEY WERE CLASSIFIED AS
RESIDENTIAL WAY BACK IN 1955 BY THE THEN NATIONAL PLANNING COMMISSION
AND THE SUBDIVSION PLAN WAS APPROVED BY THE BUREAU OF LANDS. AS A
CONSEQUENCE, THE CLTs ISSUED TO PRIVATE RESPONENTS IN OCTOBER, 1980 ARE
INVALID AS HAVING BEEN ISSUED WITHOUT JURISDICTION.
II
PRIVATE RESPONDENTS ARE NOT BONA FIDE TENANTS OF THE
LANDS INVOLVED. PUBLIC REPSONDENT'S RULING THAT THE LATTER ARE SUCH IS
CONTRARY TO LAW AS IT IGNORED THE FACT THAT THE LANDHOLDINGS ARE
RESIDENTIAL AND NO COMPETENT PROOF OF CONSENT OF THE OWNER WAS EVER
PRESENTED BY PRIVATE RESPONDENTS.
III
APPROVAL OF THE SECRETARY OF AGRARIAN REFORM IS NOT
NECESSARY FOR THE VALID CLASSIFICATION OF THE LANDS INVOLVED INTO
RESIDENTIAL BECAUSE THE CARL, AS ALSO THE RELATED AGRARIAN LAWS, HAVE NO
RETROACTIVE APPLICATION.33
Long after issues were joined in the instant
proceedings, or on October 8, 2001, petitioner Nelita Bacaling
resurrected her manifestation with the Court of Appeals and moved to
withdraw/dismiss the present petition on the ground that the irrevocable
power of attorney in favor of petitioner Jose Juan Tong had been
nullified by her and that Tong consequently lacked the authority to
appear before this Court.34 She also manifested that, contrary to the arguments of petitioner Tong, respondents were bona fide tenants of the one hundred ten (110) sub-lots which were allegedly agricultural and not residential pieces of realty.35 Accordingly, petitioner Tong was left all alone to pursue the instant case.
The issues in this case can be summarized as follows:
(1) Does petitioner Tong have the requisite interest to litigate this
petition for review on certiorari?; (2) Are the respondents agricultural
lessees?; and (3) Are the one hundred ten (110) sub-lots admittedly
classified for residential use by the National Urban Planning Commission
and the Bureau of Lands prior to October 21, 197236 covered by the Operation Land Transfer under P.D. No. 72?
We hold that petitioner Jose Juan Tong possesses
adequate and legitimate interest to file the instant petition. Under
our rules of procedure, interest means material interest, that is, an interest in issue and to be affected by the judgment,37
while a real party in interest is the party who would be benefited or
injured by the judgment or the party entitled to the avails of the suit.38
There should be no doubt that as transferee of the one hundred ten
(110) sub-lots through a contract of sale and as the attorney-in-fact of
Nelita Bacaling, former owner of the subject lots, under an irrevocable
special power of attorney, petitioner Tong stands to be benefited or
injured by the judgment in the instant case as well as the orders and
decisions in the proceedings a quo. The deed of sale
categorically states that petitioner Tong and his co-sellers have fully
paid for the subject parcels of land. The said payment has been duly
received by Bacaling. Hence, it stands to reason that he has adequate
and material interest to pursue the present petition to finality.
Respondents put too much weight on the motion to
dismiss/withdraw filed by Nelita Bacaling. Under the facts obtaining in
this case, the motion should be treated cautiously, and more properly,
even skeptically. It is a matter of law that when a party adopts a
certain theory in the court below, he will not be permitted to change
his theory on appeal, for to permit him to do so would not only be
unfair to the other party but it would also be offensive to the basic
rules of fair play, justice and due process.39
Bacaling's motion to dismiss the instant petition comes at the heels of
her admission that she had immensely benefited from selling the said
one hundred ten (110) sub-lots to petitioner Tong and of the dismissal
with prejudice of the civil case which she had earlier filed to nullify
the sale.40
It appears that the motion to dismiss is a crude and belated attempt
long after the dismissal of the civil case to divest Tong of his
indubitable right of ownership over the one hundred ten (110) sub-lots
through the pretext of revoking the irrevocable special power of
attorney which Bacaling had executed in his favor hoping that in the
process that her act would cause the assailed orders of the DAR to
become final and executory.
The records also bear out the fact that Bacaling's
design to dispossess petitioner Tong of material interest in the subject
matter of the instant petition appears to be subtly coordinated with
respondents' legal maneuvers when it began as a side pleading (a mere Manifestation)
in the proceedings before the Court of Appeals (CA-G.R. SP No. 54413
and CA-G.R. SP No. 54414) but which was never pursued to its ultimate
conclusion until it again surfaced before this Court long after
respondents' voluminous comment to the instant petition had been filed.
Under these circumstances, we certainly cannot place our trust upon
such an unsolicited motion having dubious roots, character and purpose.
Substantively, we rule that Bacaling cannot revoke at
her whim and pleasure the irrevocable special power of attorney which
she had duly executed in favor of petitioner Jose Juan Tong and duly
acknowledged before a notary public. The agency, to stress, is one
coupled with interest which is explicitly irrevocable since the deed of
agency was prepared and signed and/or accepted by petitioner Tong and
Bacaling with a view to completing the performance of the contract of
sale of the one hundred ten (110) sub-lots. It is for this reason that
the mandate of the agency constituted Tong as the real party in interest
to remove all clouds on the title of Bacaling and that, after all these
cases are resolved, to use the irrevocable special power of attorney to
ultimately "cause and effect the transfer of the aforesaid lots in the
name of the vendees [Tong with two (2) other buyers] and execute and
deliver document/s or instrument of whatever nature necessary to
accomplish the foregoing acts and deeds."41
The fiduciary relationship inherent in ordinary contracts of agency is
replaced by material consideration which in the type of agency herein
established bars the removal or dismissal of petitioner Tong as
Bacaling's attorney-in-fact on the ground of alleged loss of trust and
confidence.
While Bacaling alleges fraud in the performance of
the contract of agency to justify its revocation, it is significant to
note that allegations are not proof, and that proof requires the
intervention of the courts where both petitioners Tong and Bacaling are
heard. Stated otherwise, Bacaling cannot vest in herself just like in
ordinary contracts the unilateral authority of determining the existence
and gravity of grounds to justify the rescission of the irrevocable
special power of attorney. In Sevilla v. Court of Appeals42 we thus held-
But unlike simple grants of a power of attorney, the
agency that we hereby declare to be compatible with the intent of the
parties, cannot be revoked at will. The reason is that it is one
coupled with an interest, the agency having been created for the mutual
interest of the agent and the principal xxx [Petitioner's] interest,
obviously, is not limited to the commissions she earned as a result of
her business transactions, but one that extends to the very subject
matter of the power of management delegated to her. It is an agency
that, as we said, cannot be revoked at the pleasure of the principal.
Accordingly, the revocation complained of should entitle the petitioner x
x x to damages.
The requirement of a judicial process all the more assumes significance in light of the dismissal with prejudice, hence, res judicata,
of Bacaling's complaint to annul the contract of sale which in turn
gave rise to the irrevocable special power of attorney. It is clear
that prima facie there are more than sufficient reasons to deny
the revocation of the said special power of attorney which is coupled
with interest. Inasmuch as no judgment has set aside the agency
relationship between Bacaling and Tong, we rule that petitioner Tong
maintains material interest to prosecute the instant petition with or
without the desired cooperation of Bacaling.
On the issue of whether the private respondents are
agricultural tenants and entitled to the benefits accorded by our
agrarian laws, we rule in the negative. The requisites in order to have
a valid agricultural leasehold relationship are: (1) The parties are
the landowner and the tenant or agricultural lessee; (2) The subject
matter of the relationship is agricultural land; (3) There is consent
between the parties to the relationship; (4) the purpose of the
relationship is to bring about agricultural production; (5) There is
personal cultivation on the part of the tenant or agricultural lessee;
and (6) The harvest is shared between the landowner and the tenant or
agricultural lessee.
We find that the first, third and sixth requisites
are lacking in the case at bar. One legal conclusion adduced from the
facts in Government Service Insurance System v. Court of Appeals43
provides that GSIS, not Bacaling, was the owner of the subject
properties from 1961 up to 1989 as a result of the foreclosure and
confirmation of the sale of the subject properties. Although the
confirmation only came in 1975, the ownership is deemed to have been
vested to GSIS way back in 1961, the year of the sale of the foreclosed
properties. This is due to the fact that the date of confirmation by
the trial court of the foreclosure sale retroacts to the date of the
actual sale itself.44
Thus, the respondents cannot validly claim that they
are legitimate and recognized tenants of the subject parcels of land for
the reason that their agreement to till the land was not with GSIS, the
real landowner. There is no showing that GSIS consented to such
tenancy relationship nor is there proof that GSIS received a share in
the harvest of the tenants. Consequently, the respondents cannot claim
security of tenure and other rights accorded by our agrarian laws
considering that they have not been validly instituted as agricultural
lessees of the subject parcels of land. And from the time Bacaling
recovered the subject properties from GSIS up to the time the former
changed her legal position in the instant case, Bacaling has
consistently disclaimed respondents as her alleged tenants. Bacaling's
current legal posture cannot also overturn our finding since, as earlier
mentioned, the said change of mind of Bacaling has little or no
evidentiary weight under the circumstances.
The respondents argue that GSIS cannot be considered
as the owner of the said properties from 1961 up to 1989 inasmuch as the
foreclosure proceedings that started in 1957 only attained finality
during its promulgation by this Court in 1989. Respondents contend that
GSIS was the owner of the said parcels of land only from 1989.
We disagree. The pendency of the GSIS case cannot be construed as a maintenance of status quo with
Bacaling as the owner from 1957 up to 1989 for the reason that what was
appealed to this Court was only the issue of redemption, and not the
validity of the foreclosure proceedings including the public auction
sale, the confirmation of the public auction sale and the confirmation
and transfer of ownership of the foreclosed parcels of land to GSIS.
The ownership of GSIS over the subject parcels of land was not disputed.
It was the existence of the right to redeem in a judicial foreclosure
that was the subject of the controversy. We ruled that there was no
longer any right of redemption in a judicial foreclosure proceeding
after the confirmation of the public auction. Only foreclosures of
mortgages in favor of banking institutions and those made
extrajudicially are subject to legal redemption. Since GSIS is not a
banking institution and the procedure of the foreclosure is not
extrajudicial in nature, no right of redemption exists after the
judicial confirmation of the public auction sale of the said lots.
With respect to the third issue, we find that the one hundred ten (110) sub-lots are indeed residential. In Tiongson v. Court of Appeals45
we held that if the lot in question is not an agricultural land then
the rules on agrarian reform do not apply since the "key factor in
ascertaining whether there is a landowner-tenant relationship xxx is the
nature of the disputed property."46 We reiterated this rule in Natalia Realty, Inc. v. Department of Agrarian Reform47
where we excluded lands not devoted to agricultural activity, i.e.,
lands previously converted to non-agricultural or residential uses prior
to the effectivity of the 1988 agrarian reform law (R.A. No. 6657) by
agencies other than the DAR, from the coverage of agrarian reform. The
statement of the rule is buttressed by P.D. No. 27 which by its terms
applies only to "tenant-farmers of private agricultural lands primarily
devoted to rice and corn under a system of shared-crop or lease tenancy,
whether classified as landed estate or not."48
In the case at bar, the indubitable conclusion from
established facts is that the one hundred ten (110) sub-lots, originally
three (3) parcels of land, have been officially classified as
residential since 1955. The classification began when the NUPC and the
Bureau of Lands approved the subdivision of the original three (3)
parcels of land into one hundred ten (110) sub-lots each covered with
transfer certificates of title. To build the subdivision project,
Nelita Bacaling then obtained a real estate mortgage loan from the GSIS
which she used to fund the project but he was unfortunately unable to
complete it due to the immensity of the project cost. Bacaling
undertook to complete the sale of the subdivision when in 1978 she
obtained the registration thereof with the National Housing Authority as
well as a license to sell individually the one hundred ten (110)
sub-lots. Earlier, in 1977, the City Council of Iloilo also recognized
the residential classification of the same one hundred ten (110)
sub-lots when it passed the Land Use Plan and Zoning Ordinance. In
1990, Bacaling sold the same parcels of land to petitioner Tong who
obviously wanted to pursue the development of the subdivision project.
It is clear that Tong bought the property for residential and not
agricultural purposes upon the strong assurance of Bacaling that the one
hundred ten (110) sub-lots were legally available for such prospect.
To be sure, the subject lots were valuable in the buyer's market only
for residential use as shown by the example of adjacent lots which had
long been utilized for building subdivisions and the implausibility of
believing that Tong would buy the lands only to lose them at a bargain
to agrarian reform.49
Clearly, both intention and overt actions show the
classification of the one hundred ten (110) sub-lots for residential
use. There can be no other conclusion from the facts obtaining in the
instant case. Indeed, one cannot imagine Nelita Bacaling borrowing the
substantial amount of Six Hundred Thousand Pesos (P600,000.00) from the
GSIS and spending Two Hundred Fifty Thousand Pesos (P250,000.00) for the
purpose of developing and subdividing the original three (3) parcels of
land into one hundred ten (110) homelots, with individual transfer
certificates of title ready and available for sale, if her purported
desire were to keep the landholding for agricultural purposes. It also
makes no sense that petitioner Tong would invest so much money, time and
effort in these sub-lots for planting and cultivating agricultural
crops when all the mechanisms are already in place for building a
residential community. One cannot likewise deny the consistent official
government action which decreed the said one hundred ten (110) sub-lots
as most appropriate for human settlements considering that for several
times beginning in 1955 and in accordance with relevant laws and
regulations, the said landholding was categorically reserved as a
residential subdivision.
It is also grave error to gloss over the NUPC action
since its declarations have long been recognized in similar cases as the
present one as clear and convincing evidence of residential
classification. In Magno-Adamos v. Bagasao50
we found the endorsements of the NUPC approving albeit tentatively a
subdivision plan to be a very strong evidence of conversion of the
disputed parcels of land into a residential subdivision which would
contradict the alleged tenancy relationship. We found nothing
objectionable in the trial court's ruling in Santos v. de Guzman51
ejecting an alleged tenant from the landholding "because the same was
included in a homesite subdivision duly approved by the National
Planning Commission."52 In Republic v. Castellvi53
we gave great weight to the certification of the NUPC that the subject
parcels of land were classified as residential areas and ordered their
appraisal as residential and not agricultural lands -
The lower court found, and declared, that the lands
of Castellvi and Toledo-Gozun are residential lands. The finding of the
lower court is in consonance with the unanimous opinion of the three
commissioners who, in their report to the court, declared that the lands
are residential lands. The Republic assails the finding that the lands
are residential, contending that the plans of the appellees to convert
the lands into subdivision for residential purposes were only on paper,
there being no overt acts on the part of the appellees which indicated
that the subdivision project had been commenced xxx. We find evidence
showing that the lands in question had ceased to be devoted to the
production of agricultural crops, that they had become adaptable for
residential purposes, and that the appellees had actually taken steps to
convert their lands into residential subdivisions xxx. The evidence
shows that Castellvi broached the idea of subdividing her land into
residential lots as early as July 11, 1956 in her letter to the Chief of
Staff of the Armed Forces of the Philippines xxx. As a matter of fact,
the layout of the subdivision plan was tentatively approved by the
National Planning Commission on September 7, 1956 xxx. The land of
Castellvi had not been devoted to agriculture since 1947 when it was
leased to the Philippine Army. In 1957 said land was classified as
residential, and taxes based on its classification as residential had
been paid since then xxx. The location of the Castellvi land justifies
its suitability for a residential subdivision.
The NUPC was created under EO 98, s. of 194654
to "prepare general plans, zoning ordinances, and subdivision
regulations, to guide and accomplish a coordinated, adjusted, harmonious
reconstruction and future development of urban areas which will in
accordance with present and future needs, best promote health, safety,
morals, order, convenience, prosperity, and general welfare, as well as
efficiency and economy in the process of development; including among
other things adequate provisions for traffic, the promotion of safety
from fire and other dangers, adequate provision for light and air, the
promotion of healthful and convenient distribution of populations xxx."55
Under the express terms of its mandate, the NUPC was therefore
duty-bound to act only upon realty projects which would be used for
human settlements and not for agricultural purposes. It is in this
light that we must take stock of the 1955 NUPC conversion of the one
hundred ten (110) sub-lots from agricultural to residential
classification.
To bolster the exclusive role of the NUPC over
developmental projects for residential and industrial purposes, the term
"subdivision" (which NUPC was mandated to review and if properly
executed to approve) was defined in EO 98 as "the division of a
tract or parcel of land into two (2) or more lots, sites or other
divisions for the purpose, whether immediate or future, of sale or
building development, and includes resubdivision, and when appropriate
to the context, relates to the process of subdividing or to the land or
area subdivided."56 The Subdivision Regulations57 (which the NUPC adopted pursuant to EO 98)
decreed as mandatory the NUPC approval of all subdivisions of land in
the Philippines intended for residential, commercial and industrial
purposes, before lots comprising the subdivision could be legally sold
or building development therein could validly commence -
Any owner of land wishing to subdivide land shall
submit to the Director of Planning [who was the head of NUPC] a plat of
the subdivision which shall conform to the requirements set forth in
these Regulations. No subdivider shall proceed with the sale of lots
of a subdivision and no plat of a subdivision shall be filed with the
Director of Lands for approval or recorded in the Office of the Register
of Deeds until such plat shall have been approved by the Director of
Planning. Applications for plat approval submitted to the District
or City Engineer of a town or city in the Philippines shall be forwarded
to the Director of Planning together with the District or City
Engineer's recommendations (underscoring supplied).
We are convinced that the 1955 approval by the NUPC
of the subdivision of the subject three (3) parcels of land owned by
Nelita Bacaling and her spouse into one hundred ten (110) sub-lots
caused the conversion, if not outright classification, of the entire
landholding into a residential community for sale to interested buyers.
This is an official classification of the sub-lots as residential units
and constitutes the only objective and effectual means of obtaining in
1955 the classification and reservation of private land for
non-agricultural use, i.e. residential, industrial or commercial, since
neither P.D. No. 27 nor R.A. No. 665758
(together with the specified formal mechanisms stipulated therein for
converting a piece of agricultural land into a residential lot) were
then binding and effective. The assignment or conversion of the one
hundred ten (110) sub-lots for residential purposes was not abrogated by
P.D. No. 27 under which respondents invalidly secured their
certificates of land transfer since the decree was only prospectively
effective59 and its coverage was limited only to agricultural lands which clearly do not include the residential sub-lots in question.60
By virtue of the official classification made by NUPC
and the other circumstances convincingly proved herein, the only fair
and legally acceptable decision in the instant case would be to declare,
as we now indeed rule, that the one hundred ten (110) sub-lots are
truly residential in character as well as in purpose and are thus
excluded from the coverage of P.D. No. 27.
Verily, the Certificates of Land Transfer (CLT)
issued in respondents' names are not valid and do not change our ruling.
The respondents cannot rely on said CLTS as proof of security of
tenure. It is well settled that the certificates of land transfer are
not absolute evidence of ownership of the subject lots61
and consequently do not bar the finding that their issuance is void
from inception since they cover residential lands contrary to the
mandate of P.D. No. 27. It follows from the fact of nullity of the
certificates of land transfer in respondents' names that the respondents
are not entitled to occupy and possess the one hundred ten (110)
sub-lots or portions thereof without the consent of the owner, herein
petitioner Tong.1âwphi1.nêt
While not raised as issues in the instant petition, we nevertheless rule now (conformably with Gayos v. Gayos62
that it is a cherished rule of procedure that a court should always
strive to settle the entire controversy in a single proceeding leaving
no root or branch to bear the seeds of future litigation) that
respondents cannot claim disturbance compensation for the reason that
the sub-lots are not and have never been available for agrarian reform.
In the same vein, respondents also have no right to be reimbursed by
petitioner Jose Juan Tong for the value of or expenses for improvements
which they might have introduced on the one hundred ten (110) sub-lots
since they did not allege nor prove the existence of such improvements
and their right to compensation thereto, if any.63
WHEREFORE, the Petition for Review is GRANTED. It is further ordered and adjudged that:
1. The certificates of land transfer over the one
hundred ten (110) sub-lots located in Barangay Cubay, Jaro, Iloilo City,
in the name of respondents and/or their successors in interest are
hereby DECLARED VOID AB INITIO. The said one hundred ten
(110) sub-lots, covered by TCT Nos. T-10664 to T-10773 of the Registry
of Deeds of the City of Iloilo, are declared outside the coverage and
operation of P.D. No. 27 and other land reform laws.
2. The consolidated Decision of the Court of Appeals in CA-G.R. SP No. 54413 ("Felomino
Muya and Crispin Amor v. Nelita Bacaling, represented by her
attorney-in-fact, Jose Juan Tong, and the Executive Secretary, Office of
the President") and in CA-G.R. SP No. 54414, ("Wilfredo Jereza, Rodolfo Lazarte and Nemesio Tonocante v. Hon. Executive Secretary, Office of the President and Nelita Bacaling") and its Resolution dated June 5, 2001 denying petitioners' Motion for Reconsideration are REVERSED AND SET ASIDE.
3. The Decision dated May 22, 1998 and the Resolution dated July 22, 1999 of the Office of the President in OP Case No. 98-K-8180 are REINSTATED with the modification in that the respondents are not entitled to disturbance compensation; and
4. Respondents Felomino Muya, Crispin Amor, Wilfredo
Jereza, Rodolfo Lazarte and Nemesio Tonocante together with their
assigns and successors in interest are ordered to vacate and surrender
peacefully the possession of the one hundred ten (110) sub-lots, covered
by TCT Nos. T-10664 to T-10773-Iloilo City, to petitioner Jose Juan
Tong within thirty (30) days from notice of this Decision.
No pronouncement as to costs.
SO ORDERED.
Bellosillo, Mendoza, and Quisumbing, JJ., concur.
Footnotes
1
Penned by Associate Justice Andres Reyes, Jr. and concurred in by
Associate Justices B.A. Adefuin-de la Cruz, and Rebecca de
Guia-Salvador; Rollo, pp. 36-45.
2 Sixteenth Division.
3 The case is entitled "Felomino
Muya and Crispin Amor v. Nelita Bacaling, represented by her
attorney-in-fact, Jose Juan Tong, and the Executive Secretary, Office of
the President".
4 The case is entitled "Wilfredo Jereza, Rodolfo Lazarte and Nemesio Tonocante v. Hon. Executive Secretary, Office of the President, and Nelita Bacaling."
5 Rollo, pp. 47-48.
6 Rollo, pp. 49-55.
7 Rollo, p. 50.
8 Rollo, p. 50.
9 Rollo, p. 50.
10 Rollo, p. 50.
11 Government Service Insurance System v. Court of First Instance of Iloilo, Branch III, 175 SCRA 19, 21 (1989).
12 Ibid.
13 The case referred to is Government Service Insurance System v. Court of First Instance of Iloilo, Branch III; Ibid.
14 Rollo, p. 50.
15 Rollo, p. 50.
16 Rollo, p. 52.
17 Rollo, p. 50.
18 Annex "A" of Comment/Opposition (on Petitioner Nelita M. Bacaling's Motion to Withdraw/Dismiss Petition); Rollo, p. 319-321.
19 Rollo, pp. 58-60.
20
See Note 18, i.e., Deed of Absolute Sale; Annex "E" of
Comment/Opposition (on Petitioner Nelita M. Bacaling's Motion to
Withdraw/Dismiss Petition); Rollo, p. 330.
21 Docketed as ADM. Case No. 01-21-93-3090.
22 Order dated April 3, 1996; Rollo, pp. 61-66.
23 Docketed as ADM. Case No. A-0400-0010-92; Order dated December 12, 1996; Rollo, pp. 67-72.
24 Order dated September 4, 1997; Rollo, pp. 73-77.
25
Docketed as OP Case No. 98-K-8180; Decision dated May 22, 1998 penned
by Executive Secretary Alexander P. Aguirre; Rollo, pp. 49-55.
26 Rollo, p. 55.
27 Resolution dated July 22, 1999 penned by Executive Secretary Ronaldo B. Zamora; Rollo, pp. 56-57.
28 Docketed as CA-G.R. SP Nos. 54413 and 54414; Rollo, pp. 35-48.
29 Rollo, pp. 118-124.
30 Rollo, pp. 35-45.
31 Rollo, p. 45.
32 Rollo, pp. 47-48.
33 Rollo, pp. 17-18.
34 Rollo, pp. 260-261.
35 Rollo, p. 260.
36
This is the date of effectivity of P.D. No. 72, the land reform law
under which respondents obtained the certificates of land transfer in
their names.
37 I V.J. Francisco, The Revised Rules of Court in the Philippines (1973), p. 209.
38 Sec. 2, Rule 3, Revised Rules of Civil Procedure.
39
Cruz v. Court of Appeals, 233 SCRA 301, 309 (1994), citing BA Finance
Corporation v. Court of Appeals, 201 SCRA 157; Galicia v. Palo, 179 SCRA
375; Ramos v. Intermediate Appellate Court, 175 SCRA 70; Ganzon v.
Court of Appeals, 161 SCRA 641; Dulos Realty and Development Corporation
v. Court of Appeals, 157 SCRA 425; Dihiansan, et.al. v. Court of
Appeals, 153 SCRA 712; Dela Santa v. Court of Appeals, 140 SCRA 44;
Soriano v. Philippine National Railways, 84 SCRA 722; Mejorada v.
Municipal Counsil of Dipolog, 52 SCRA 451.
40 See Note 20.
41 Rollo, pp. 58-60.
42 G.R. Nos. L-41182-3, 160 SCRA 171 (1988).
43 See Note 11.
44
Government Service Insurance System v. Court of Appeals, 175 SCRA 19,
24 (1989); Binalbagan Estate, Inc. v. Gatuslao, et. al. 74 Phil 128
(1943).
45 G.R. No. L-62626, 130 SCRA 482 (1984).
46 Id., p. 489.
47 G.R. No. 103302, 225 SCRA 282 (1983).
48 Par. 5.
49 For a listing of the subdivisions, see Rollo, p. 52.
50 G.R. No. L-63671, 162 SCRA 747 (1988).
51 111 Phil. 671 (1961).
52
The National Planning Commission was the successor agency of the
National Urban Planning Commission under EO 367, s. 1950; 46 O.G., No.
11, pp. 5301-5307 (11 November 1950).
53 58 SCRA 336, 356 (1974).
54 The EO is entitled "Creating a National Urban Planning Commission and Defining Its Powers and Duties."
55 42 O.G. No. 3, p. 425 (March 11, 1946).
56 Ibid.
57 45 O.G. No. 6, p. 2417 (June 1949); Underscoring supplied.
58 This law is entitled "Comprehensive Agrarian Reform Law of 1988."
59 Castro v. Court of Appeals, No. L-44727, 99 SCRA 722 (1980).
60 See note 46.
61 R.P. Barte, The Law on Agrarian Reform (1991), p. 64.
62 G.R. No. L-27812, 67 SCRA 146 (1975).
63
Baclayon v. Court of Appeals, G.R. No. 89132, 182 SCRA 761, 769-770
(1990); International School, Inc. Minister of Labor and Employment,
G.R. No. 54243, 175 SCRA 507 (1989).
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