FIL-ESTATE PROPERTIES, INC.

, Petitioner – versus – PAULINO REYES, ET

AL, Respondents
The Department of Agrarian Reform is vested with primary jurisdiction to
determine and adjudicate agrarian reform matters and has exclusive original
jurisdiction over all matters involving the implementation of the Comprehensive
Agrarian Reform Law.
FACTS:
Hacienda Looc is an 8,650.7778-hectare property in Nasubu, Batangas
and registered in the name of the Development Bank of the Philippines.
Development Bank acquired the property from Magdalena Estate, Inc. and the
Philippine National Bank. In 1987, then President Corazon Aquino issued E.O.
No. 13, transferring Development Bank’s certain assets and liabilities to the
government, including Hacienda Looc. The government then entered into an
agreement with the Asset Privatization Trust, in which the latter was appointed
trustee of the property.
On June 28, 1990, Asset Privatization Trust, through a Memorandum of
Agreement, offered to sell portions of Hacienda Looc to the Department of
Agrarian Reform under the Voluntary Offer to Sell scheme of Republic Act No.
6657. Through this agreement, Asset Privatization Trust transferred the
Physical possession of Hacienda Looc to the Department of Agrarian Reform. In
effect, the Department of Agrarian Reform was allowed to: (1) identify and
segregate areas that were covered by the Comprehensive Agrarian Reform
Program; (2) purchase the segregated areas; and (3) return portions of the
property that were not covered. From 1991 to 1993, the Department of
Agrarian Reform distributed 25 Certificates of Land Ownership Award covering
3,981.2806 hectares of land. Meanwhile, on December 10, 1993, Asset
Privatization Trust offered to sell its rights and interests in Hacienda Looc
through public bidding. Bellevue Properties, Inc., which emerged as the
winning bidder, then assigned its right to purchase Hacienda Looc to the
Manila Southcoast Development Corporation.
By virtue of the assignment, Asset Privatization Trust executed a Deed of
Sale transferring all its rights, claims, and benefits over Hacienda Looc to
Manila Soutchoast. Manila Southcoast was able to register portions of
Hacienda Looc in its name.
On April 10, 1995, Manila Southcoast filed a Petition before the
Department of Agrarian Reform Adjudication Board Region IV. It sought,
among others, the cancellation of the 25 Certificates of Land Ownership Award,
the resurvey of Hacienda Looc, and the reconveyance of the excluded areas.
The case was elevated to the Regional Agrarian Reform Adjudication Board.
Instead of filing an answer, the farmer-beneficiaries moved for the Petition’s
dismissal. Manila Southcoast, in turn, opposed the motions. The parties
exchanged pleadings, but before the pending incidents could be resolved,
several of the farmer-beneficiaries entered into amicable settlements with
Manila Southcoast.
Between January and June 1996, Regional Adjudicator Arche-Manalang
rendered three (3) Partial Summary Judgments and an Order canceling 15
Certificates of Land Ownership Award based on the waivers allegedly executed
by the farmer-beneficiaries. On October 27, 1997, Agrarian Reform
Undersecretary Artemio A. Adasa issued an Order canceling 9 Certificates of
Land Ownership Awards from the coverage of the Comprehensive Agrarian
Reform Program. Aggrieved, the farmer-beneficiaries appealed the case.
However such appeal was denied by the DARAB in a Decision dated January
25, 2005.
Meanwhile, on October 17, 1995, while its Petition was still pending,
Manila Southcoast entered into a joint venture agreement with Fil-Estate
Properties, Inc. The agreement was made for the development of the 10 lots
with an area totaling 1,219.0133 hectares.
In view of this joint venture agreement, Fil-Estate filed a Petition on
October 8, 1996, praying that these 10 lots be excluded from the coverage of
the Comprehensive Agrarian Reform Program. It claimed that the lots had
slopes of more than 18%.
On December 26, 1996, Department of Agrarian Reform Regional
Director Remigio A. Tabones (Regional Director Tabones) issued an
Order granting Fil-Estate's Petition and ordering that the 10 lots be excluded
from the coverage of the Comprehensive Agrarian Reform Program.
Thus, the affected farmer-beneficiaries appealed before the Agrarian
Reform Secretary. In his March 25, 1998 Order, Agrarian Reform Secretary
Garilao, on the basis of Undersecretary Soliman's report and the report of three
(3) other task forces, declared 70 hectares of the 1,219.0133-hectare parcel of
land as covered land under the Comprehensive Agrarian Reform Program.
Following this Order, the farmer-beneficiaries moved for reconsideration
and sought the issuance of a clarificatory ruling. However, their Motion was
denied in Agrarian Reform Secretary Garilao's June 15, 1998 Order.
For its part, Fil-Estate filed before the Court of Appeals a Petition for
Partial Review. It argued that the 10 lots, which are located inside a tourist
zone, were excluded from the Comprehensive Agrarian Reform Law's coverage.
 As this Petition for Partial Review was pending, the farmer beneficiaries
appealed their case before the Office of the President. The Office of the
President dismissed the farmer-beneficiaries’ appeal. It upheld the Department
of Agrarian Reform’s findings that majority of the 1,219.0133-hectare parcel of
land had an average slope of 18% and were agriculturally underdeveloped.
The Famer-beneficiaries filed a Petition for Review before the Court of
Appeals, arguing that the Office of the President erred in limiting its scope of
review to the 1,219.0133-hetare property when it should have conducted the
review over the entire Hacienda Looc based on the community of interest
principle. They also argued that the Office of the President erred in
characterizing the property as undeveloped and in relying on the findings of the
Department of Agrarian Reform, especially since the proceedings for exemption
were done in secrecy.
In a November 23, 2000 Resolution, however, the Court of Appeals
dismissed the case on technical grounds. The farmer-beneficiaries moved for
reconsideration, but the Motion was likewise denied.
The Court of Appeals rendered a Decision on March 26, 2002 affirming
Agrarian Reform Secretary Garilao’s March 25, 1998 Order in toto.
The Court of Appeals upheld the factual findings of Agrarian Reform
Secretary Garilao regarding the lots' slope and level of development.
The Court of Appeals affirmed the factual findings of Agrarian Reform
Secretary Garilao on the nature of the 1,219.0133-hectare parcel of land,
adhering to the rule of according great respect to administrative agencies'
factual findings. It also ruled that the farmer-beneficiaries were not denied due
process because they were given the opportunity to appeal and seek
reconsideration.
On May 20, 2002, Fil-Estate filed a Petition for Review on
Certiorari assailing the Court of Appeals' March 26, 2002 Decision in CA-G.R.
SP No. 47497. To recall, the Court of Appeals affirmed Agrarian Reform
Secretary Garilao's March 25, 1998 Order declaring 70 hectares of the
1,219.0133-hectare parcel of land in Hacienda Looc as covered land under the
Comprehensive Agrarian Reform Program. Docketed as G.R. No. 152797, the
Petition was filed against farmer-beneficiaries headed by Paulino Reyes (Reyes,
et al.).
Fil-Estate essentially asserts that the 10 lots subject of Regional
Adjudicator Arche-Manalang's First Partial Summary Judgment are excluded
from the coverage of the Comprehensive Agrarian Reform Program. According
to Fil-Estate, Nasugbu, Batangas was classified as a tourism zone and under
the Philippine Tourism Authority's control pursuant to Proclamation No. 1520,
issued by then President Ferdinand Marcos (President Marcos) on November
20, 1975. The entire coastline of Batangas was also classified as a tourism
zone under Proclamation No. 1801, which was also issued by then President
Marcos on March 10, 1978.
The Philippine Tourism Authority even attested that Hacienda Looc has
been identified as one (1) of the four (4) major tourism development areas.
Therefore, the 10 lots are excluded from the coverage of the Comprehensive
Agrarian Reform Program, regardless of whether they have slopes of less than
18% or whether they are agriculturally developed.
ISSUE:
Whether the subject lots are excluded from the coverage of the
Comprehensive Agrarian Reform Program
RULING:
In the March 25, 1998 Order, Agrarian Reform Secretary Garilao found
several areas of Hacienda Looc suitable for agrarian reform. In questioning this
finding, Fil-Estate argues that Nasugbu, Batangas was classified as a tourism
zone prior to the enactment and effectivity of the Comprehensive Agrarian
Reform Law. Thus, Nasugbu, Batangas is excluded from the coverage of the
Comprehensive Agrarian Reform Program.
Proclamation No. 1520, on which Fil-Estate heavily relies, was issued on
November 28, 1975. The Proclamation indentifies the municipalities of
Maragondon and Ternate in Cavite and the municipality of Nasugbu in
Batangas as potential tourist zones.
The effect of Proclamation No. 1520 vis-à-vis the application of the
Comprehensive Agrarian Reform Law was tackled in Roxas & Company, Inc. v.
DAMBA-NSFW.
This Court rejected the argument and ruled that Proclamation No. 1520
merely identified areas that had potential tourism value.
According to Roxas, Proclamation No. 1520 neither reclassified nor
converted all lands in the Maragondon, Ternate, and Nasugbu from
agricultural to non-agricultural. Thus, these areas were deemed not to have
been automatically excluded from the coverage of the Comprehensive Agrarian
Reform Program.
This Court further held that the Department of Agrarian Reform has
primary jurisdiction over applications for conversion and, as an administrative
body with special competence, it has the power to determine whether a parcel
of land should be included in the coverage of the Comprehensive Agrarian
Reform Program.
A proclamation that merely recognizes the potential tourism value of
certain areas within the general area declared as tourist zone clearly does not
allocate, reserve, or intend the entirety of the land area of the zone for non-
agricultural purposes. Neither does said proclamation direct that otherwise
CARPable lands within the zone shall already be used for purposes other than
agricultural.
Thus, in this case, there is no merit in Fil-Estate's argument that, in
light of Proclamation No. 1520, the 10 lots are excluded from the coverage of
the Comprehensive Agrarian Reform Program.

Q: Manila Southcoast entered into a joint venture agreement with Fil-Estate

Properties, Inc. for the development of 10 lots with an area totaling 1,219.0133
hectare. In view of this joint venture agreement, Fil-Estate filed a Petition on
October 8, 1996, praying that these 10 lots be excluded from the coverage of
the Comprehensive Agrarian Reform Program. It claimed that the lots had
slopes of more than 18%. Fil-Estate further argued that the 10 lots, located
inside a tourist zone, were excluded from the Comprehensive Agrarian Reform
Law’s coverage.
Are the subject lots excluded from the coverage of the Comprehensive
Agrarian Reform Program?
A: NO. Proclamation No. 1520, on which Fil-Estate heavily relies, was
issued on November 28, 1975. The Proclamation indentifies the municipalities
of Maragondon and Ternate in Cavite and the municipality of Nasugbu in
Batangas as potential tourist zones.
The effect of Proclamation No. 1520 vis-à-vis the application of the
Comprehensive Agrarian Reform Law was tackled in Roxas & Company, Inc. v.
DAMBA-NSFW.
This Court rejected the argument and ruled that Proclamation No. 1520
merely identified areas that had potential tourism value.
According to Roxas, Proclamation No. 1520 neither reclassified nor
converted all lands in the Maragondon, Ternate, and Nasugbu from
agricultural to non-agricultural. Thus, these areas were deemed not to have
been automatically excluded from the coverage of the Comprehensive Agrarian
Reform Program.