SECOND DIVISION

[CA-G.R. SP No. 63180.  January 11, 2002.]

NOLITO D. SOLMAYOR, VICENTE LASTIMA, JUANITO B. SUAREZ, GERVACIO BATAUSA (dec.), Rep. by Antonio Batausa, VICTORIANO CANDIA, PRIMITIVO BORRES (dec.), Rep. by Rogelio Borres, TIBURCIO MANULAT, PATRICIO ASTACAAN, JUANITO AMIGABLE, OZITA MENDOZA, LUIS CANDOG (dec.), Rep. by JOVENCIA CANDOG and SABINO CELADES (dec.), Rep. by Sergia Estante, petitioners, vs. ANTONIO L. ARROYO, respondent.

D E C I S I O N

REYES, B., J p:

          Before Us is the petitioners Norlito D. Solmayor, et al.'s (collectively referred to as Solmayor) Petition for Review under Rule 43 of the Rules of Court, assailing the decision rendered and promulgated on 17 November 2000 by the Office of the President in O.P. Case No. 96-L-6682.

          The antecedent facts as aptly gathered by the Office of the President:

"xxx                    xxx                    xxx

          The landholding subject of this case, with an aggregate area of 9.8038 hectares and situated in Matina, Davao City, covers portions embraced by Transfer Certificate of Title (TCT) Nos. T. 2979 (now TCT Nos. T-131160 and T-131161), T-2980, T-2981 and T-2982 issued by the Register of Deeds for the City of Davao in the name of Mr. Arroyo. Appellees Norlito Solmayor, et al., occupy the land and claim to be de jure tenants of Mr. Arroyo.

          On November 23, 1978, Mr. Arroyo received a letter from Legal Officer Norberto N. Feria, Jr., of the then Ministry of Agrarian Reform (MAR, now DAR) informing him that his land was the subject of Operation Land Transfer (OLT) under Presidential Decree (PD) No. 27. He was likewise advised that he could apply for conversion of the land to residential or other urban purposes in accordance with the laws, rules and regulations then applicable. This was followed by a letter dated January 17, 1979 signed by Mr. Hilario Pulido, MAR Team Leader I, stating that based on the parcellary map sketching conducted by the Agrarian Reform and the Bureau of Lands, the subject property was covered by OLT program since the area thereof, which was tenanted at that time, was more than seven (7) hectares.

          On July 24, 1979, Mr. Arroyo applied for the conversion of the subject land to residential subdivision. Attached to the application were pertinent documents showing that the land has been classified as residential by different government agencies, such as the Human Settlements Regulatory Commission (precursor of the HLURB), the Bureau of Soils, and the City of Davao. Acting on the application, the DAR local officials conducted a series of conferences by and between Mr. Arroyo, through his representative, and the possessors and occupants of the land (herein appellees), purposely to reach a settlement for the latter's relocation, award of their respective homelots, and payment of disturbance compensation as a consequence of conversion. However, the parties reached no final agreement. This prompted the Agrarian Reform Technologist of Davao City, Elizabeth B. Caparo to recommend that the tenants on the land be accorded the benefits of PD 27 and/or that the matter (request/application for conversion) be referred to the Bureau of Agrarian Legal Assistance (BALA) for whatever action it may deem proper.

          In November 1984, the DAR, even without resolving Mr. Arroyo's request for conversion, issued the questioned CLTs in favor of the appellees. Upon discovery thereof, Mr. Arroyo filed on August 27, 1985, a petition for the cancellation of the CLTs on the ground that the subject property was, and still is, a residential property and therefore beyond the coverage of PD 27. There, he denied the existence of a tenancy relationship between him and the appellees.

          Some four (4) years hence, or on August 8, 1988 to be precise, Mr. Arroyo, through his Attorney-in-Fact, Mr. Eduardo E. Suatengco, Jr., made a voluntary offer to sell of his entire landholding, including the subject land, to the government pursuant to the provision of the Comprehensive Agrarian Reform Law (CARL) of 1988.

          In an order dated May 19, 1989, the DAR Regional Director of Region XI dismissed the petition for cancellation of CLTs, ratiocinating that with Mr. Arroyo's voluntary offer to sell, the issue of whether or not the subject land is within the OLT coverage becomes moot and academic.

          Meanwhile, the DAR in 1990, issued Emancipation Patents (EPs) to the appellees as the identified tenant-beneficiaries on the land.

          In time, Mr. Arroyo filed an appeal with the Office of the Secretary of Agrarian Reform, praying that the May 19, 1989 order be set aside and the CLTs cancelled.

          In an order dated July 19, 1994, then DAR Secretary Garilao dismissed the appeal and affirmed the validity of the EPs issued to the tenant-beneficiaries. In substance, Secretary Garilao held that notwithstanding the prior classification of the land, the actual use thereof remains agricultural and that appellees are Mr. Arroyo's de jure tenants.

          His motion for reconsideration having been denied in an order dated August 7, 1996, Mr. Arroyo has interposed this recourse."

          . . . . " (Rollo, pp. 31 to 32)

          In a twist of fate, after due consideration and evaluation of the respective positions of the parties hereto in the Office of the President, on 17 November 2000, the latter's office promulgated its decision, the decretal portion thereof reads:

          "WHEREFORE, foregoing premises considered, the assailed DAR orders dated July 19, 1994 and August 7, 1996 are hereby REVERSED and SET ASIDE and a new one entered declaring the 9.8-hectare land in question outside the Operation Land Transfer coverage of Presidential Decree No. 27.

          SO ORDERED." (Rollo, p. 36)

          Dissatisfied with the decision of the Office of the President, petitioners filed before Us the instant Petition for Review, by imputing the following assigned errors:

"I

          The Honorable Office of the President erred in finding that the subject properties have been classified as non-agricultural lands prior to the effectivity of Presidential Decree no. 27 (P.D. 27) on October 21, 1972;

II

          The Honorable Office of the President erred in finding that the subject properties were not primarily devoted to rice or corn crops;

III

          The Honorable Office of the President erred in finding that the farmer beneficiaries (respondent Appellees) are not tenants of the landowner-appellant, over the subject property;

IV

          The Honorable Office of the President erred in declaring the 9.8 hectares land in question outside the operation land transfer coverage of Presidential Decree no. 27, as it is tantamount to the CANCELLATION/NULLIFICATION of the Emancipation Patents (EPs) issued thereon, which is a collateral attack proscribed by the rules." (Rollo, pp. 11 to 12)

          The petition is bereft of merit.

          We join and conform to the Office of the President's evaluation and conclusion that the resolution of the instant case, including the above-enumerated assigned errors imputed by herein petitioners, is primarily anchored on the issue of whether or not the subject property is exempt under the Operation Land Transfer (OLT) coverage of Presidential Decree No. 27. Based on the resolution of the said primary and principal issue, the determination of whether or not the cancellation of the Certificates of Land Transfers (CLTs) and Emancipation Patents (EPs issued in favor of the petitioners would follow as a matter of course.

          For Us to determine whether the subject property is within the coverage of Presidential Decree No. 27, We are lifting the pertinent provision of paragraph 5 of P.D. 27 which states in no uncertain terms that:

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          This (P.D. 27) shall apply to tenant farmers of private agricultural lands primarily devoted to rice and corn under a system of share-crop or lease tenancy, whether classified as landed or not". (emphasis supplied)

          Thus, from the provision of the above-cited decree, as amended by R.A. 6657, land coverage thereof only applies when two (2) conditions concur, a) the agricultural land is planted with rice and corn; and (b) the existence of a tenancy relationship between the landowner and the tenant-farmer.

          As correctly argued by the respondent herein, and so ruled by the Office of the President, the subject property is not a private agricultural land as specifically required under the aforequoted provision of P.D. 27, as amended. Uncontroverted evidence shows that the subject property had already been classified as residential/commercial even prior to the effectivity of P.D. 27. Per Official Zoning Map of the City of Davao adopted under Resolution No. 711, Ordinance No. 281, Series of 1972 (p. 243, records), the land was classified as Commercial Zone and Residential Zone Class B. This classification confirmed the residential character of the subject land as appearing in Mr. Arroyo's tax declarations filed way back in 1968 (pp. 187-190, records). Furthermore, in support of its factual findings, the Office of the President rightfully considered several certifications issued by various government agencies, both local and national, which confirmed the residential character of the property in question, to wit:

1.         The Housing and Land use Regulatory Board (HLURB), Davao City, which issued a Zoning Certification to the effect that the subject land is within the Residential/Commercial Zone under the Zoning Ordinance of Davao City adopted through a Sangguniang Bayan Resolution and ratified by the HLURB, through Board Resolution No. 39-4, s. of 1980 dated July 31, 1980 (p. 208, Records)

2.         The Office of the Zoning Administrator, City of Davao, certifying to the effect that the subject land is within a Residential Zone Class "B" in the Zonification Ordinance of Davao City (p. 126, Records)

3.         The Bureau of Soils of then Ministry of Agriculture, Davao City, which submitted a Certification to the effect that the subject land is suitable for urban use/housing projects (p. 127, Records)

4.         The Office of the City Planning and Development Coordinator, Office of the Zoning Administrator, certifying to the effect that the subject land was classified as Major Commercial Zone (C-2) and High Density Residential Zone (R-2) in the City Ordinance No. 363, s. of 1982 or better known as Expanded Zoning Ordinance of Davao City (p. 160, Records)

5.         DAR Provincial Task Force on Illegal Conversion Report dated 02 June 2000, which unequivocably stated that the subject land is no longer agricultural, it being classified as commercial and residential zones. Consequently, said Task Force ruled out any act of illegal conversion.

          Time and again, We have upheld without fail the consistent posture of the judicial branch of Our Republican government of yielding to the findings of facts of executive agencies which are concededly technically equipped to determine the technical complexities involved in disputes over which they exercise jurisdiction, and called upon to resolve. It is in fact a potent tool that the regular courts may profitably use towards the more competent disposition of cases involving highly technical and specialized issues. Thus, "well settled is the rule that the findings or conclusions of administrative bodies are generally respected and even given finality". (Ting vs. Court of Appeals, 237 SCRA 797). While We are not totally oblivious of the evidence presented by, and the arguments of, the petitioners, We find, in this case, no plausible or cogent reason to depart from these hornbook rules.

          Petitioners, for instance, had capitalized so much on the DAR personnel's memorandum dated 17 May 1993, which effectively showed that the actual use of the subject property is still agricultural being primarily devoted to rice and corn crops (petitioner's memorandum, p. 3). However, to Our mind, such Investigation Report, is at best of dubious validity having been purportedly concluded sometime in 1993 which is so far removed, in point of time, from the date P.D. 27 was enacted and took effect on 21 October 1972. Assuming "ex gratis argumenti" that the said Investigation Report being invoked by the petitioners was true and valid, the same cannot, nonetheless, be considered as sufficient basis to support their theory that the subject property is embraced within the operation of PD 27. It must be overly stressed that the report being invoked by the petitioners merely certifies as to the actual use of the subject property and not its actual land classification. Simply stated, the report in question does not state that the subject property is, indeed, classified as agricultural land as of the time PD 27 took effect. The findings and conclusion of the Office of the President along this issue is worthy of reiterating:

          ". . . the records show that the land in dispute was never intended for agricultural production. For one, no agricultural improvements were introduced upon the land since its acquisition by Mr. Arroyo in 1951. In fact, for more than a decade since 1972, the disputed land was subject of numerous business proposals (attached to Appeal Memorandum) from various land developers for purposes of developing it into a residential and commercial area. For another, the subject property is situated in a commercial and residential area. As the records show, it is adjacent to the Government Service and Insurance System (GSIS) subdivision and other residential or commercial establishments, and surrounded by GSIS Heights, Villa Josefina Subdivision, Flores Village, Central Park Subdivision, Poly Subdivision, San Miguel Village, New Matina Golf Club, Davao Memorial Park, Shrine of the Infant Jesus, Matina Public Market and Venees Hotel.

          The fact that appellees may perhaps have planted rice or corn on the said land, situated in the middle of what appears to be a fast growing residential and business are in the heart of a metropolitan area, is of little moment. Such agricultural activity cannot, by any strained interpretation of law, amount to converting the land in question into agricultural land and subject it to the agrarian reform program of the government. The Supreme Court in Hilario vs. Intermediate Appellate Court [supra] held that:

          ". . . . But even if the claim of the private respondent that some corn was planted on the lots is true, this does not convert residential land into agricultural land.

          The presumption assumed by the appellate court, that a parcel of land which is located in a poblacion is not necessarily devoted to residential purposes, is wrong. It should be the other way around. A lot inside the poblacion should be presumed residential, or commercial or non-agricultural unless there is clearly respondent evidence to show that it is agricultural." (emphasis supplied) (Rollo, p. 35)

          Petitioners likewise claimed that respondent was guilty of estoppel. They invoke that when herein respondent, in his letter dated 08 August 1988 voluntarily offered to sell to the DAR the subject property and expressed therein that the same was productive and suitable to agricultural production, he had in fact, admitted the character and nature of the subject property to be agricultural. One can only surmise as to what prompted the respondent into voluntarily offering the subject properties to DAR. One could even speculate, including the herein petitioners, that the respondent did in fact believe in good faith that the subject property is, indeed, agricultural in nature and, therefore, comes within the purview of the provisions of P.D. 27. But suffice it to state, that these are all within the realm of the possibilities unsupported by evidence. What is clear though, is that the subject property is, and has always been classified as residential/commercial, as could be evidenced by the documentary evidences which were substantially established by herein respondent. No amount of admission, even on the part of its owner (respondent) himself, could even change such classification as the same is not dependent on the will of its owner but, rather conferred by law.

          We must stress, assuming it to be true that the respondent believed that the subject property is classified as agricultural, and based upon such belief he proceeded to offer the same under the provisions of R.A. 6657 on voluntary offer(s) to sell, respondent's mistake could not be ripen into a vested right in favor of the petitioners. Parenthetically, the DAR itself recognizes the fact that oftentimes, certain lands brought into its agrarian reform program were later found to be non-agricultural. Cognizant of such fact, it has evolved a scheme whereby these erroneously covered properties are returned to their rightful owners. Thus, the Department of Agrarian Reform's Administrative Order No. 03, Series of 1996, entitled "RECONVEYANCE OF PROPERTIES TURNED-OVER TO DAR PURSUANT TO E.O. No. 407/448 and LANDS VOLUNTARILY OFFERED UNDER SECTION 19 of R.A. No. 6657 BUT FOUND TO BE OUTSIDE THE COVERAGE OF CARP", was enacted and promulgated. The pertinent portion thereof provides:

"II.       POLICY STATEMENT

1.         All lands turned-over by government instrumentalities and landowner, offerors, pursuant to E.O. No. 407, as amended by E.O. No. 448 and Section 19, of R.A. 6657, where certain portions thereof are later found to be outside the coverage of CARP shall be reconveyed to the original transferors. Non-coverage of landholdings shall be determined on the basis of either of the following:

a.         The land, or portions thereof, are found to be no longer suitable for agriculture and, therefore, could not be given appropriate valuation by the Land Bank of the Philippines (LBP);

b.         A Conversion Order has already been issued by the DAR allowing the use of the landholding other than for agricultural purposes in accordance with Section 65 of R.A. No. 6657 and Administrative Order No. 12, Series of 1994;

c.         The property has been determined to be exempted from CARP coverage pursuant to Department of Justice Opinion Nos. 44 and 181; or

d.         A Presidential Proclamation has been issued declaring the subject property for certain uses other than agricultural."

          In this manner, it is very explicit from the aforequoted provisions of Administrative Order No. 03, Series of 1996, that it contemplates situations where lands turned-over to DAR pursuant to existing agrarian reform laws, including those made under the voluntary offer to sell scheme, were subsequently determined and found to be non-agricultural lands. Consequently, by specific provision thereof, lands erroneously turned-over to the DAR shall be returned or reconveyed to their respective owners. Consistent with such Administrative Order, We hold that absent any showing that the voluntary offer to sell made by the respondent had already been officially accepted and acted upon by the DAR, the same may still be withdrawn. Even on the assumption that the said voluntary offer to sell was accepted by the DAR, consistent with Our previous dissertation, the same did not ipso facto convert the land use classification of the subject property from residential/commercial to agricultural.

          We are now poised to resolve the issue of whether or not there exists a tenancy relationship between the parties hereto.

          Along this issue, We likewise sustain the findings of the Office of the President that the petitioners are not de jure tenants of the respondent.

          The requirements of a tenancy relationship under P.D. No. 27 was expounded upon by the Supreme Court in the case of Isidro vs. Court of Appeals, 228 SCRA 503, where it ruled that:

          "The essential requisites of a tenancy relationship are: 1) the parties are the landowner and the tenant; 2) the subject matter is agricultural lands, 3) there is consent; 4) the purpose is agricultural production; 5) there is a personal cultivation by a tenant; 6) there is a sharing of harvests between the parties. All these requisites must concur in order to create a tenancy relationship between the parties. The absence of one does not make an occupant of a parcel of land, or a cultivator thereof, or a planter thereon, a de-jure tenant, he is not entitled to a security of tenure nor is covered by the Land Reform Program of the government under existing tenancy laws".

          As We have already exhaustively discussed above, and in the light of Our findings sustaining the stance of the Office of the President, that the subject property is not classified as an agricultural land, such fact alone is sufficient justification that the petitioners are not de-jure tenants. Apropos thereto, the petitioners are not entitled to the Emancipation Patents issued in their favor. It must perforce be nullified and cancelled.

          At this juncture, We have no doubts, whatsoever in Our minds, that the decision of the Office of the President now under review is abundantly supported by substantial evidence. In agrarian cases, all that is required is a mere substantial evidence, as consistently held by the Supreme Court in a long line of decisions. Said ruling was later incorporated in Presidential Decree 946, which took effect on 17 June 1986, and which has been expressly made applicable to agrarian cases. (Heirs of E. B. Roxas, Inc. vs. Tolentino, et al., 167 SCRA 334; Sintos vs. Court of Appeals, 246 SCRA 229). In the case of Rodriguez vs. ECC, 178 SCRA 30, substantial evidence is defined as "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion". Thus, given the disquisitions embodied in the ruling of the Office of the President under review, this Court cannot but concur, the same findings being supported by substantial evidence.

          All told, We are fully convinced that the findings of fact and laws, orders and circulars applied by the Office of the President in reversing the decision of the Department of Agrarian Reform, are fully supported by substantial evidence to justify its conclusion.

          WHEREFORE, in view of the foregoing, the instant petition is DENIED. Accordingly, the decision of the Office of the President dated 17 November 2000 in OP Case No. 96-L-6682 is hereby AFFIRMED.

          SO ORDERED.

          Garcia and Barrios, JJ., concur.