THIRD DIVISION

August 31, 2016

G.R. No. 198160

VICTORIA P. CABRAL, Petitioner
vs.
GREGORIA ADOLFO, GREGORIO LAZARO AND HEIRS OF ELIAS POLICARPIO, Respondents

DECISION

REYES, J.:

This appeal by petition for review on  certiorari1  seeks to annul and set aside the Decision2  dated March 30, 2011 and
Resolution3  dated August 17, 2011 of the Court of Appeals (CA) in CA-G.R. SP No. 108274, which reversed the
Decision4 dated July 29, 2008 and Resolution5 dated March 11, 2009 of the Department of Agrarian Reform and Adjudication
Board (DARAB) in DARAB Case No. 13552. The DARAB judgment affirmed the Decision6  dated June 18, 2004 of the
Provincial Agrarian Reform Adjudicator (PARAD) of Bulacan cancelling the Emancipation Patents (EPs) and Transfer
Certificates of Title (TCTs) of Gregoria Adolfo (Adolfo), Gregorio Lazaro (Lazaro) and the Heirs of Elias Policarpio
(collectively, the respondents).

The Facts

The subject of this case is a parcel of land owned by petitioner Victoria P. Cabral (Cabral), known as Lot 4, situated at
Barangay Iba (formerly Pantok), Meycauayan, Bulacan, covered by Original Certificate of Title (OCT) No. 0-1670 [now OCT
No. 0-220(M)] of the Registry of Deeds (RD) of Bulacan, and which was placed under the Operation Land Transfer (OLT)
program under Presidential Decree (P.D.) No. 27. 7

Accordingly, on April 25, 1988, EPs were issued covering portions of Lot 4, and the corresponding TCTs were subsequently
issued in favor of the respondents. 8

To these issuances, Cabral initiated a petition for the cancellation of the said EPs and TCTs against the respondents before
the PARAD of Bulacan docketed as Case No. R-03-0242-03. 9 In her petition, Cabral argued that: (1) the EPs covered non-
agricultural lands which were outside the coverage of the OL T program; (2) the EPs were issued without due notice and
hearing; and (3) no Certificates of Land Transfer (CL Ts) were previously issued over Lot 4.

Respondents Adolfo and Lazaro moved to dismiss the petition on the grounds of lack of jurisdiction, lack of personality to
sue, and prescription; 10 however, it was denied. The respondents then filed a petition for certiorari and prohibition before the
CA but it was dismissed for their failure to exhaust administrative remedies.11

On June 18, 2004, the P ARAD rendered its Decision  12  cancelling the EPs of the respondents and ordering the RD of
Meycauayan, Bulacan, to revive Cabral's OCT No. 0-1670, to wit:

WHEREFORE, premises considered, judgment is hereby rendered, as follows:

1. Ordering the [RD] of Bulacan to cancel the EP Titles issued to the private respondents, as
follows: FLORENCIO ADOLFO-TCT No. EP-003, FLORENCIO ADOLFO-TCT No. EP-004,
GREGORIA ADOLFO-TCT No. EP-005, GREGORIA ADOLFO-TCT No. EP-006, GREGORIO
LAZARO-TCT No. EP- 007, GREGORIO LAZARO-TCT No. EP-008,' ELIAS POLICARPIO-TCT
 No. EP-010, ELIAS POLICARPIO-TCT No. EP-009;

2. Ordering the private respondents and all persons claiming rights and interest under them to
vacate the landholdings under their respective possessions and surrender the same to [Cabral];

3. Ordering the [RD] of Bulacan to [revive] OCT No. 0-220-(M) (Formerly OCT No. 0-1670)
registered under the name of [Cabral], insofar as Lot 4 thereof is concerned.

SO ORDERED. 13

The PARAD ruled that: (1) Lot 4 is a residential lot and not an agricultural one, citing the 1983 zoning map of Meycauayan,
Bulacan and the certification14 dated February 24, 1983 of Meycauayan's zoning administrator; (2) as early as October 1,
1973, the DAR District Officer Fernando Ortega (Ortega) had already made a declaration that Lot 4 was not covered by the
OL T program;  15  thus, it could not have been transferred to the tenants through the issuance of CLTs; and (3) DAR's
declaration of non-coverage in the OL T program signified that Lot 4 was either untenanted or was not agricultural. 16

Aggrieved, the respondents appealed the aforesaid P ARAD decision to the DARAB Quezon City which was docketed as
DARAB Case No. 13552. 17

In its Decision18 dated July 29, 2008, the DARAB affirmed the PARAD's decision tha't Lot 4 was not covered by the OLT
program and no CLTs were issued over it. The heirs of Florencio Adolfo and the heirs of Elias Policarpio sought
reconsideration19 thereto but the same was denied. 20 Hence, the respondents filed a petition for review21 with the CA.

Ruling of the CA

On March 30, 2011, the CA Decision22 granted the petition, and reversed and set aside the rulings of the DARAB. The CA
defined the main issue in controversy as to whether Lot 4 does not fall within the coverage of the OLT program under P.D.
No. 27 so as to warrant the cancellation of the EPs and TCTs issued in favor of the respondents.

In reversing the DARAB, the CA pointed out that the records of the case are bereft of any evidence showing that an order of
conversion or a declaration from the DAR Secretary was issued which placed Lot 4 outside the coverage of the OLT
program.  23  The CA then ruled that the two certifications issued by the Office of the Zoning Administrator could not be
considered as ordinances issued by the Municipality of Meycauayan since the classification of the lands is merely based on
the official zoning map of the municipality and not on a municipal ordinance issued for that purpose. Moreso, the said
certifications are silent as to when the subject landholdings became parts of the residential/industrial zone. 24

The CA further said that the 2nd endorsement dated October 1, 1973 issued by Ortega cannot be construed as a declaration
from the DAR Secretary regarding the conversion of the subject landholding since the said letter only contained a
recommendation for the conversion of the subject landholding into residential, commercial, industrial or other urban
purposes. 25

Lastly, the CA gave credence to the letter26 dated June 21, 1983 of Deputy Minister Benjamin Labayen (Labayen) denying
Cabral's request for conversion stating that the subject landholding is covered by the OLT program with corresponding CL Ts
already generated and that the said land is fully tenanted.27

Cabral moved for reconsideration28 but it was denied.29 Hence, this petition.

The Issue

The crux of this case is whether or not grounds exist to warrant the cancellation of the EPs and TCTs issued to the
respondents. The determination of this issue in tum hinges on the question of whether or not the subject landholding is
covered by the OLT program under P.D. No. 27.

Ruling of the Court

The Court grants the petition.

To begin with, it must be said that the Court generally accords respect, if not finality, to the factual findings of quasi-judicial
bodies, such as the DARAB and the P ARAD, as these administrative bodies are deemed experts on matters within its
specific and specialized jurisdiction.30 However, since the findings of the PARAD and the DARAB conflict with those of the
CA, the Court is constrained to disregard the general rule and to re-examine the records of the case to address the issue on
hand.

Only landholdings under

Cabral has been untiring in her insistence that: (1) the respondents are not her tenants; (2) no CLTs have been issued to the
respondents; and (3) Lot 4 is non-agricultural land. The respondents, on the other hand, anchor their right to the subject
landholding upon their claim that they were actual tenants and rice farmers, and that a CL T is not a condition  sine qua
non to the generation and issuance of an EP.

Under P.D. No. 27, the DAR is mandated to issue CLTs for landholdings brought under the coverage of the OL T program.
Corollary to this, Section 10531 of P.D. No. 152932 enjoined the DAR to issue CLTs in duplicate for lands brought under the
government's OLT program and the original to be kept by the tenant while the duplicate is to be maintained in the RD. The
significance of the CL T is supported by the Court in  Heirs of Teresita Montoya, et al. v. National Housing Authority, et
al.,33 ruling that:

A CLT is a document that the govermnent issues to a tenant-farmer of an agricultural land primarily devoted to
rice and com production placed under the coverage of the government's OLT program pursuant to P.D. No. 27.
It serves as the tenant-farmer's (grantee of the certificate) proof of inchoate right over the land covered thereby.

xxxx

As a preliminary step, therefore, the issuance of a CLT merely evinces that the grantee thereof is qualified to
avail of the statutory mechanism for the acquisition of ownership of the land tilled by him, as provided under
P.D. No. 27. The CLT is not a muniment of title that vests in the tenant-farmer absolute ownership of his tillage.
It is only after compliance with the conditions which entitle the tenant-farmer to an EP that the tenant-farmer
acquires the vested right of absolute ownership in the landholding. Stated otherwise, the tenant-farmer does not
acquire full ownership of the covered landholding simply by the issuance of a CLT. The tenant-fanner must first
comply with the prescribed conditions and procedures for acquiring full ownership but until then, the title
remains with the landowner. 34 (Citations omitted)

Clearly, a CL T signifies that the government has determined that the land is comprehended by P.D. No. 27 and that the
claimant is its actual tiller-beneficiary.   Consequently, without a CLT, a claimant has no inchoate right of ownership and
1âwphi1

cannot be issued an EP.

Findings of facts of quasi-judicial

Generally, the "factual findings of administrative bodies charged with their specific field of expertise, are afforded great
weight by the courts, and in the absence of substantial showing that such findings were made from an erroneous estimation
of the evidence presented, they are conclusive, and in the interest of stability of the governmental structure, should not be
disturbed."35  The PARAD and the DARAB, by reason of their official mandate and functions have acquired expertise in
specific matters within their jurisdiction, and their findings deserve full respect. Without justifiable reason, their factual
findings ought not to be altered, modified, or reversed. 36

On the question of whether the subject landholding was agricultural and/or tenanted, the PARAD correctly said:

Verily indeed, if the subject lands were already tenanted during the effectivity of [P.D. No.] 27 on October 21,
1972 or carries the character of an agricultural land as of that date, the District Officer of the DAR should have
not made a declaration in 1973 stating that the parcels of land are not covered by [OL T]. The said District
Officer's declaration only adds . veracity to [Cabral's] contention that the parcels of land covered by the subject
EP titles, at the outset, have been classified as residential and only supports this Board's conclusion that the
same are not tenanted. 37
According to the PARAD and the DARAB, the DAR had already made a declaration excluding Lot 4 from the coverage of the
OL T program. 38 Therefore, the EPs issued to the respondents in April 1988 were a violation of Cabral's right to due process
and to just compensation. The P ARAD further noted that the non-inclusion of the landholding covered by the assailed EPs
under the OL T program is bolstered by the fact that there were no CL Ts covering the subject lots issued to the
respondents. Therefore, no award of the subject lots should have been made in favor of the respondents.39

The Court also agrees with the P ARAD' s declaration that a zoning reclassification made subsequent to P.D. No. 27 does
not create a presumption that the land used to be primarily devoted to rice or com, could well have been already non-
agricultural even back in 1972.40  In fact, in October 1973, DAR had already made a determination that the subject
landholding was exempt from the OLT program.41

The respondents failed to show how

P.D. No. 27, or the "Tenant's Emancipation Decree," placed the entire Philippine archipelago on October 21, 1972 under
land reform, decreeing the emancipation of all rice and corn tenant-farmers from the bondage of the soil. Pursuant to Letter
of Instructions No. 47442 and related issuances, the DAR then undertook to place under the OL T program all tenanted rice
and com lands with size of seven hectares or less. The farmer-beneficiaries were required to organize themselves into a
farmers' cooperative or Samahang Nayon and to apply for CLTs.43

There are several steps to be undertaken before an EP can be issued. In Reyes v. Barrios,44 the Court cited the Primer on
Agrarian Reform45 which enumerated the steps in transferring the land to a tenant-tiller under P.D. No. 27, to wit:

a. First step: the identification of tenants, landowners, and the land covered by OLT.

b. Second step: land survey and sketching of the actual cultivation of the tenant to determine parcel size,
boundaries, and possible land use;

c. Third step: the issuance of the [CLT]. To ensure accuracy and safeguard against falsification, these
certificates are processed at the National Computer Center (NCC) at Camp Aguinaldo;

d. Fourth step: valuation of the land covered for amortization computation;

e. Fifth step: amortization payments of tenant-tillers over fifteen (15)[-]year period; and

f. Sixth step: the issuance of the [EP].46 (Citation omitted)

The Court explained, in  Del Castillo v. Orciga,47  that land transfer under P.D. No. 27 is effected in two stages: first, the
issuance of a CLT; and second, the issuance of an EP. The first stage serves as the government's recognition of the tenant-
farmers' inchoate right as "deemed owners" of the land that they till. The second stage perfects the title of the tenant-farmers
and vests in them absolute ownership upon full compliance with the prescribed requirements. As a preliminary step, then,
the CL T immediately serves as the tangible evidence of the government's recognition of the tenant-farmers' inchoate right
and of the subjection of the particular landholding to the government's OLT program. 48

Nonetheless, the records of the case are bereft of evidence indicating that the abovementioned procedure has been followed
by the respondents. Moreover, there are significant gaps in the following series of events that led to the issuance of the
assailed EPs which bolster Cabral' s claim that the CL Ts for the subject landholding do not exist and the EPs issued to the
respondents are invalid, to wit:

a) In July 1973, Cabral sought to convert 13 hectares of her landholdings situated in two municipalities in
Bulacan for non-agricultural purposes;49

b) In his second endorsement dated October 1, 1973, Ortega recommended the approval of the conversion
after noting that Lot 4 had been excluded from the OLT program; 50

c) Cabral insists that she was not informed that Lot 4. was being placed under the OLT program.51  The
respondents are completely silent as to what transpired from October 1, 1973 to July 22, 1982, when CLT Nos.
0056649, 056491, 001236 and 02056474 were allegedly issued over Lot 4;
 d) On June 21, 1983, Labayen wrote to inform Cabral that her application for conversion had been
disapproved, 52 but Cabral denied receiving the said letter; 53

e) On October 20, 1987, Ortega, apparently unaware of the said letter of Labayen, issued a third endorsement
for the conversion of Cabral' s landholding; 54

f) DAR's Team No. 03-II-098 conducted a new investigation, and on November 10, 1987, it issued a
report55 recommending the denial of the conversion and alleging that Lot 4 is covered by OL T and CL Ts were
already generated. The report also explained that although Lot 4 is situated in an industrial zone, it remains
suitable to rice or com production;

g) On April 25, 1988, EPs were issued over Lot 4; 56

h) In October and November 1989, the TCTs were issued cancelling Cabral's OCT No. 0-220 (M) over Lot 4;
and

i) The' respondents have not shown that they have paid for the lots awarded to them.

Both DAR and the respondents have the burden to show that: (1) Lot 4 was properly brought under the OL T program and
the corresponding CL Ts were issued; (2) Cabral was duly notified thereof and was paid just compensation; and (3) the
respondents had fully paid the amortizations for the just value of the land awarded to them; hence, the issuance of their EPs.
Unfortunately, the above chronology is full of significant silences which only raise more questions than answers.

Cabral's right to due process was

Cabral also contends that she was never notified that Lot 4 would be placed under the coverage of the OL T program;
hence, her constitutional right to due process of law was violated.

In Heirs of Dr. Deleste v. Land Bank of the Philippines, et al.,57 the Court ruled that there must be an actual notice to subject
a property under the agrarian reform program, that lack of notice violates the essential requirements of administrative due
process of law, and that the enactment of P.D. No. 27 is not a statutory notice to all owners of agricultural lands devoted to
rice or com production as to dispense with actual notice to the landowner. 58

The Court further held that the importance of an actual notice in subjecting a property under the agrarian reform program
cannot be underrated, as non-compliance with it trods roughshod with the essential requirements of administrative due
process of law. 59

Here, a perusal of the records showed that, indeed, Cabral' s right to due process was violated since she never knew about
the coverage of Lot 4 under the OLT program. The Court already noted that the respondents failed to establish their
entitlement to the EPs, thereby casting doubt on its validity, as well as on the TCTs that were issued to them. The
respondents have likewise adduced no proof of any amortization payments on the subject landholding, and even claim that
Cabral' s charge of lack of just compensation is immaterial to the petition. Conversely, the mere fact that no compensation
was paid itself voids their EPs, which means that the respondents cannot avoid the duty to prove that their subject lots have
been paid for.

There was no explanation why only

The Court observed that TCT Nos. EP-005(M), EP-006(M), EP-009(M) and EP-OlO(M) were not derived from any CLT and
that the CA avoided mentioning that the four EPs were issued even without corresponding CLTs. The CA overlooked the fact
that CLT Nos. 0056649, 056491, 001236 and 02056474 were dated July 22, 1982, or 10 years after Lot 4 had supposedly
been brought under the OL T program, notwithstanding that in October 1973, a determination had already been made by
DAR that the subject landholding was not covered by the OLT program.60 It is incomprehensible to understand why Labayen
would deny Cabral' s application for conversion only in June 1983, which is 10 years after Cabral first applied for conversion.
Indeed, as late as October 1987, or four years after Labayen's supposed letter, Ortega even issued a third endorsement of
Cabral' s application for conversion. Even more interesting is the fact that a new DAR investigatioµ on the suitability of the
land for OL T program had to be conducted, albeit Labay en's letter61 in June 1983 declaring that the subject land is covered
by the OLT program pursuant to P.D. No. 27 with corresponding CL Ts that were already generated.

The Court is inclined to agree with the findings of the P ARAD and the DARAB as these circumstances support their findings
that no CL Ts were issued for the subject landholding. Credence must also be given to Cabral's claim that she was never
informed nor involved in the steps and processes taken by the DAR to transfer her subject landholding to the respondents.
Worse, Cabral was never paid any compensation for her property. While P.D. No. 27 expressly ordered the emancipation of
tenant-farmer, full payment of the just compensation had to be made first, conformably to the constitutional requirement. 62

Incidentally, the Court cannot likewise discount the significance of the zoning reclassification of the subject landholding by
the Municipality of Meycauayan from agricultural to residential, industrial or other urban uses. In the case of  Pasong
Bayabas Farmers Association, Inc. v. CA,63  the Court held that the power of the local government units to reclassify or
convert lands to non-agricultural uses is not subject to the approval of the DAR.64 In Heirs of Luis A. Luna, et al. v. Afable, et
al.,65 the Court likewise held that "[t]he regulation by local legislatures of land use in their respective territorial jurisdiction
through zoning and reclassification is an exercise of police power."66

Lastly, the Court had already ruled that the mere issuance of an EP does not put the ownership of the agrarian reform
beneficiary beyond attack and scrutiny.  EPs may be cancelled for violations of agrarian laws, rules and regulations. Section
1âwphi1

1, Rule II of the DAR New Rules of Procedure, vested the DARAB with exclusive original jurisdiction over cases involving the
issuance, correction and cancellation of Certificates of Land Ownership Award (CLOA) ahd EPs which are registered with
the Land Registration Authority (now the RD). 67 "For sure, the jurisdiction of the DARAB cannot be deemed to disappear the
moment a certificate of title is issued, for, such certificates are not modes of transfer of property but merely evidence of such
transfer, and there can be no valid transfer of title should the CLOA, on which it was grounded, be void. The same holds true
in the case of a certificate of title issued by virtue of a void [EP]."68

Among the grounds for cancellation of registered EPs as summarized by DAR Memorandum Order No. 02, Series of 1994,
includes land which is found to be exempt/excluded from P.D. No. 27. Since the subject landholding which is Lot 4 had
already been reclassified to non-agricultural uses and was, therefore, already outside the coverage of the OL T program
under P.D. No. 27, the EPs and CL Ts issued to the respondents are void and should accordingly be cancelled.

WHEREFORE, in view of these considerations, the petition is  GRANTED. The Decision dated March 30, 2011 and the
Resolution dated August 17, 2011 of the Court of Appeals in CA-G.R. SP No. 108274 are hereby REVERSED  and  SET
ASIDE. The Decision dated July 29, 2008 and the Resolution dated March 11, 2009 of the Department of Agrarian Reform
and Adjudication Board in DARAB Case No. 13552, are REINSTATED.

SO ORDERED.