Union Bank of the Philippines vs. Regional Agrarian Reform Officer

The Department of Agrarian Reform Adjudication Board lacks jurisdiction over petitions for cancellation of Certificates of Land Ownership Award where no tenancy or tenurial relationship exists between the landowner and the agrarian reform beneficiaries. In such cases, jurisdiction rests with the Department of Agrarian Reform proper, under its original authority over the administrative implementation of agrarian reform. Furthermore, the factual findings of the Secretary of Agrarian Reform, when supported by substantial evidence and affirmed by the Court of Appeals, are binding and conclusive upon the Supreme Court in a petition for review on certiorari under Rule 45.

Union Bank of the Philippines was the registered owner of two parcels of agricultural land in Calamba, Laguna, with a combined area of approximately 134 hectares. The bank offered the properties to the government through the Voluntary Offer to Sell scheme of the Comprehensive Agrarian Reform Program. A disagreement on just compensation arose, and trust accounts were opened by the Land Bank of the Philippines. Meanwhile, the Department of Agrarian Reform distributed the land to numerous farmer-beneficiaries and issued Certificates of Land Ownership Award in their names. Union Bank subsequently sought to withdraw its voluntary offer and have the land declared exempt from agrarian reform coverage, asserting that the lots had a slope exceeding 18% and were undeveloped.

• Nature and Offer of the Properties: Union Bank was the registered owner of two parcels of land in Barangay Bunggo, Calamba, Laguna, covered by TCT Nos. T-137846 (1,083,250 sq m) and T-156610 (260,132 sq m). The bank voluntarily offered both parcels to the DAR under the CARP’s VOS scheme. After inspection, the DAR and Land Bank valued the properties, but Union Bank rejected the valuation. The DAR Regional Director then requested LBP to open trust accounts in the bank’s name.

• Issuance of CLOAs: Despite the valuation dispute, the DAR proceeded to identify agrarian reform beneficiaries and issued CLOAs for the land under TCT No. T-156610. In September 1993, a total of 189 CLOAs were transmitted to the Register of Deeds. The land under TCT No. T-137846 was transferred to the Republic on September 13, 1993.

• Withdrawal of VOS and Request for Exemption: On August 1, 1996, Union Bank formally requested the DAR to withdraw its VOS and exempt the properties from CARP coverage, invoking Section 10 of the Comprehensive Agrarian Reform Law. It claimed the land had a slope exceeding 18% and was undeveloped, submitting a slope map and land capability map that were not certified by the Department of Environment and Natural Resources.

• Denial by the DAR Secretary: In an Order dated July 21, 2008, DAR Secretary Nasser C. Pangandaman denied the request for lack of substantial evidence, specifically noting the absence of a DENR certification and finding that the maps submitted were insufficient to prove the properties were undeveloped. A motion for reconsideration was likewise denied.

• Petitions for Cancellation of CLOAs: Union Bank filed two sets of petitions for cancellation of CLOAs with the PARAD — the first in 1996 against 28 beneficiaries, and the second in 2004 against 141 beneficiaries. Both petitions alleged that the CLOAs were improperly issued because the land was exempt from CARP and the beneficiaries were unqualified. Neither petition alleged nor established that the respondents were Union Bank’s agricultural tenants or that any tenurial arrangement existed between them. The PARAD dismissed both petitions for prematurity, noting that the DAR Secretary had yet to rule on the exemption request. The DARAB sustained the dismissals on appeal.

• DAR-Initiated Case Report: The MARO’s case report recorded the presence of multiple crops — vegetables, rice, corn, and permanent industrial crops — on the land, contradicting Union Bank’s claim that the properties were undeveloped.

• Jurisdiction of the DARAB: Petitioner maintained that Executive Order No. 229 expressly vested the DARAB with quasi-judicial powers over agrarian reform matters, including the cancellation of CLOAs. It argued that the DAR Secretary had been “effectively ousted” from jurisdiction the moment CLOAs were issued, and that the DARAB could not share concurrent jurisdiction with the DAR Secretary on the validity of CLOA issuance.

• Exemption from CARP: Petitioner contended that the properties had a slope exceeding 18% and were not irrigated, relying on appraisal reports and a certification from the National Irrigation Administration. It asserted that the DAR Secretary erred in finding otherwise and that the factual findings should be reversed.

• Procedural and Substantive Defects in CLOA Issuance: Petitioner claimed, for the first time on appeal, that no just compensation had been paid and that the DAR failed to follow the correct procedure in issuing the CLOAs. It argued these defects justified cancellation.

• Primary Jurisdiction of the DAR Secretary: Respondents countered that the classification and identification of landholdings for CARP coverage, including petitions for exemption or lifting of coverage, are lodged with the DAR Secretary under the administrative implementation mandate of the CARL. The DARAB’s jurisdiction, they argued, is limited to agrarian disputes.

• Absence of Tenancy: Respondents argued that the petitions for cancellation did not involve an agrarian dispute because the farmer-beneficiaries were never tenants of Union Bank. Consequently, the PARAD and DARAB never acquired jurisdiction over the subject matter.

• Prematurity: Respondents maintained that the cancellation petitions were correctly dismissed as premature, since a prior determination by the DAR Secretary that the land is exempt from CARP is a condition precedent to any judicial or quasi-judicial cancellation of CLOAs.

• Conclusiveness of Administrative Findings: Respondents asserted that the DAR Secretary’s factual findings were supported by substantial evidence and affirmed by the Court of Appeals, and thus should be accorded finality.

• Jurisdiction of the DARAB: Whether the Department of Agrarian Reform Adjudication Board has jurisdiction over petitions for the cancellation of Certificates of Land Ownership Award where no tenancy relationship exists between the landowner and the agrarian reform beneficiaries.

• Review of Factual Findings: Whether the factual findings of the Secretary of Agrarian Reform — particularly the determination that the properties were not exempt from CARP coverage — may be reviewed and reversed in a petition for review on certiorari under Rule 45.

• Propriety of Raising New Issues on Appeal: Whether Union Bank may raise for the first time before the Supreme Court the issues of non-payment of just compensation and procedural irregularities in the issuance of the CLOAs.

• Jurisdiction of the DARAB: The PARAD and DARAB never acquired jurisdiction over the cancellation petitions. Under Section 50 of the CARL and Section 17 of Executive Order No. 229, original jurisdiction over agrarian reform implementation — including the classification and exemption of land — was vested directly in the DAR, not the DARAB. Executive Order No. 129-A later bifurcated these functions, delegating adjudication of agrarian disputes to the DARAB and leaving administrative implementation with the DAR regional offices. A cancellation proceeding falls within the DARAB’s competence only if it involves an “agrarian dispute,” which the CARL defines as a controversy relating to tenurial arrangements. The essential requisites of a tenancy relationship — landowner and tenant, agricultural land, consent, agricultural production, personal cultivation, and sharing of harvests — are jurisdictional allegations. Union Bank’s petitions made no prima facie showing of any tenancy arrangement; the bank merely alleged that the respondents were CLOA beneficiaries. Since no agrarian dispute existed, jurisdiction rested exclusively with the DAR Secretary, and the dismissal of the petitions was correct. The ruling in Valcurza v. Tamparong, Jr. squarely controls: cancellation of CLOAs involving parties who are not agricultural tenants is an administrative implementation matter belonging to the DAR, not the DARAB.

• Review of Factual Findings: The DAR Secretary’s determination that the land was not exempt from CARP was conclusive. Section 10 of the CARL requires two concurring conditions for exemption based on slope: a gradation of at least 18% and the land must be undeveloped. While Union Bank presented an uncontroverted slope map, it failed to prove the land was undeveloped; on the contrary, the MARO case report documented active agricultural cultivation. The weighing of conflicting evidence on land development is a factual function within the sound discretion of the DAR Secretary. Factual findings of administrative agencies with expertise in their specific subject matter are accorded respect and finality, particularly when affirmed by the Court of Appeals. A Rule 45 petition is limited to questions of law; the Supreme Court is not a trier of facts and will not re-examine evidence absent a clear showing of grave abuse of discretion, which was not present.

• Propriety of Raising New Issues on Appeal: The contentions regarding non-payment of just compensation and defective CLOA issuance procedures were raised for the first time before the Supreme Court. These issues were not alleged in the complaints before the PARAD, litigated in the lower tribunals, or passed upon by the Court of Appeals. Under the fundamental rules of fair play and due process, issues not raised below cannot be entertained for the first time on appeal. Union Bank was, however, not precluded from raising them in an appropriate separate proceeding before a competent tribunal.

• Definition of “Agrarian Dispute” and its Jurisdictional Significance — Under Section 3(d) of the CARL, an “agrarian dispute” is a controversy relating to tenurial arrangements, whether leasehold, tenancy, stewardship, or otherwise, over agricultural land. For the PARAD and DARAB to acquire jurisdiction, a complaint must contain a prima facie allegation of a tenancy relationship, the essential requisites of which are: (1) the parties are the landowner and the tenant; (2) the subject is agricultural land; (3) there is consent; (4) the purpose is agricultural production; (5) there is personal cultivation; and (6) there is sharing of harvests. Absent these allegations, the case is not an agrarian dispute, and the DARAB has no jurisdiction.

• Bifurcated Jurisdiction under Agrarian Reform Laws — Section 50 of the CARL and Section 17 of EO No. 229 originally vested two distinct jurisdictions in the DAR: primary jurisdiction over the adjudication of agrarian reforms, and original jurisdiction over the administrative implementation of agrarian reform. EO No. 129-A separated these functions, transferring the power to adjudicate agrarian disputes to the newly created DARAB and leaving administrative implementation — including the classification, identification, and exemption of land from CARP coverage — with the DAR Secretary and the DAR regional offices. The DARAB’s jurisdiction is thus limited to agrarian disputes, while the DAR Secretary retains exclusive authority over agrarian reform implementation.

• Doctrine of Finality of Administrative Factual Findings — Factual findings of administrative agencies that have acquired expertise in specific matters within their jurisdiction are accorded respect and even finality by the courts, provided they are supported by substantial evidence. The Supreme Court will not substitute its judgment for that of the administrative tribunal unless there is a clear showing of grave abuse of discretion. This doctrine is reinforced when, as in this case, the Court of Appeals has affirmed the administrative findings.

• “Thus, the DARAB has jurisdiction over cases involving the cancellation of registered CLOAs relating to an agrarian dispute between landowners and tenants. However, in cases concerning the cancellation of CLOAs that involve parties who are not agricultural tenants or lessees — cases related to the administrative implementation of agrarian reform laws, rules and regulations – the jurisdiction is with the DAR, and not the DARAB.” (citing Valcurza v. Tamparong, Jr.) — This excerpt articulates the precise jurisdictional demarcation between the DARAB and the DAR Secretary.

• “Given the technical legal meaning of the term ‘agrarian dispute,’ it follows that not all cases involving agricultural lands automatically fall within the jurisdiction of the PARAD and DARAB.” — This passage underscores that jurisdiction is determined by the nature of the parties’ relationship, not merely the agricultural character of the land.

• “We cannot emphasize to litigants enough that the Supreme Court is not a trier of facts. It is not our function to analyze or weigh the evidence all over again.” — A frequently cited reminder delimiting the Court’s review power under Rule 45.

• Valcurza v. Tamparong, Jr., 705 SCRA 128 (2013) — Followed as controlling precedent. This case established the rule that cancellation of CLOAs involving parties without a tenancy relationship falls under the DAR’s administrative implementation jurisdiction, not the DARAB’s adjudicatory authority.

• Heirs of Candido Del Rosario v. Del Rosario, 674 SCRA 180 (2012) — Applied to define “agrarian dispute” and to clarify that the DARAB’s jurisdiction is limited to cases involving tenurial arrangements.

• Sebastian v. Morales, 397 SCRA 549 (2003) — Cited for the doctrine that factual findings of the Secretary of Agrarian Reform, when supported by substantial evidence and affirmed by the Court of Appeals, are binding and beyond the Supreme Court’s review in a Rule 45 petition.

• Agrarian Reform Beneficiaries Association v. Fil-Estate Properties, Inc., 766 SCRA 313 (2015) — Relied upon for the enumeration of the essential requisites of a tenancy relationship, which must be alleged to vest jurisdiction in the DARAB.

• Section 10, Republic Act No. 6657 (Comprehensive Agrarian Reform Law) — Exempts from CARP coverage all lands with a slope of 18% and over, except those already developed. Applied to require proof of both a qualifying slope and undeveloped status; the absence of a DENR-certified map and the presence of agricultural activity defeated the exemption claim.

• Section 50, Republic Act No. 6657 — Vests in the DAR primary jurisdiction to determine and adjudicate agrarian reform matters and exclusive original jurisdiction over all matters involving the implementation of agrarian reform. Interpreted to distinguish between adjudication of agrarian disputes (later transferred to the DARAB) and administrative implementation (retained by the DAR Secretary).

• Section 17, Executive Order No. 229 — Originally conferred upon the DAR quasi-judicial powers and exclusive original jurisdiction over agrarian reform implementation. The Court clarified that this provision did not grant jurisdiction to the DARAB, which did not yet exist at the time of enactment.

• Executive Order No. 129-A — The Reorganization Act that created the DARAB and delegated to it the adjudication of agrarian disputes while retaining administrative implementation functions in the DAR regional offices.

• 1994 DARAB Rules of Procedure, Rule II, Sections 1 and 2 — Delineated the scope of cases falling within the DARAB’s jurisdiction, limited to agrarian disputes and related matters.

Presbitero J. Velasco, Jr. (Chairperson), Lucas P. Bersamin, Alfredo Benjamin S. Caguioja. Chief Justice Maria Lourdes P.A. Sereno was on official business but concurred. Acting Chief Justice Antonio T. Carpio certified the decision.

N/A — The decision was unanimous among the participating Justices of the Third Division.