The Supreme Court held that a separate opinion or handwritten note from a member of the Department of Agrarian Reform Adjudication Board (DARAB) does not form part of the official decision and cannot be subject to appeal. This ruling emphasizes the importance of adhering to procedural rules in agrarian disputes, clarifying that only the dispositive portion of a DARAB decision is binding and appealable. It also underscores the principle that new issues cannot be raised for the first time on appeal, ensuring fairness and due process in legal proceedings.

Clash of Interests: Can Tourism Zones Override Agrarian Reform?

This case revolves around a land dispute in Cebu City, where Paulino Franco owned a parcel of land. The Department of Agrarian Reform (DAR) sought to place this land under the Comprehensive Agrarian Reform Program (CARP), potentially redistributing it to tenant farmers. Franco objected, arguing that Presidential Proclamation No. 2052, issued in 1981, had already declared the area as a tourist zone, thus exempting it from agrarian reform. The core legal question is whether a prior declaration of land as a tourist zone automatically overrides the subsequent implementation of agrarian reform laws. The case highlights the conflict between promoting tourism and protecting the rights of tenant farmers.

The legal battle began when Municipal Agrarian Reform Officer Patrocinia G. Mercado (MARO Mercado) notified Franco of a conference to discuss placing his land under the agricultural leasehold system. Franco’s non-attendance and objection led MARO Mercado to prepare documentation for Provisional Lease Rentals in favor of several individuals, claiming they were bona fide tenants. Franco challenged these orders before the DARAB, asserting that Proclamation No. 2052 and Letter of Instruction No. 1256 (LOI No. 1256) had classified the land as non-agricultural. He also argued that the alleged tenants had not shared any produce with him, meaning the land could not be placed under the leasehold system.

The Agrarian Reform Adjudicator sided with Franco, declaring the orders null and void, citing the prior classification of the land as a tourist zone. This decision was initially affirmed by the DARAB, which emphasized that Franco’s land was not agricultural land at the time the orders were issued. However, a handwritten note by DARAB member Lorenzo R. Reyes complicated the matter. Reyes stated that Franco would still have to apply for conversion, and if granted, the appellants would be entitled to disturbance compensation. Franco then filed a Motion for Reconsideration on the issue of disturbance compensation, which was denied.

Franco then appealed to the Court of Appeals, but the private petitioners (the alleged tenants) did not. The Court of Appeals affirmed the DARAB decision but modified it by deleting the disturbance compensation, stating that the private petitioners failed to prove they were tenants or bona fide occupants of the land. The case reached the Supreme Court because the issues stemmed from the handwritten note and not the core decision of the DARAB.

The Supreme Court emphasized the distinction between a judgment and an opinion, quoting the case of Republic of the Philippines v. Nolasco:

“A judgment must be distinguished from an opinion. The latter is the informal expression of the views of the court and cannot prevail against its final order or decision. While the two may be combined in one instrument, the opinion forms no part of the judgment.”

The Court stressed that the handwritten note was merely a personal view of a DARAB member and not part of the DARAB decision. It also reiterated the principle that courts cannot decide questions not properly raised as an issue. In this case, the entitlement to disturbance compensation was premature since the original issue was the nullity of the Provisional Lease Rental Orders. The determination of legitimate tenants entitled to disturbance compensation is best left to the DAR.

The Supreme Court also highlighted an important order issued by then DAR Secretary Garilao, which set aside his previous order and clarified the extent of the land covered by Proclamation No. 2052:

“In other words, the specific intent of Proclamation No. 2052 is the identification of the areas for tourism with the implication that the other areas within the proclamation but no longer necessary for tourism development as determined by the PTA, in this case, could be transferred for agrarian reform purposes to the DAR.”

This order directed the DAR Regional Office VII, in coordination with the Philippine Tourism Authority, to determine precisely which areas were for tourism development and excluded from Operation Land Transfer and the Comprehensive Agrarian Reform Program. The Court also reiterated that lands already classified as non-agricultural before the enactment of RA 6657 on June 15, 1988, do not need any conversion clearance.

The petitioners raised new issues on appeal regarding the coverage of Proclamation No. 2052 and the non-tenancy findings. The Supreme Court pointed out that the petitioners never appealed the DARAB decision to the Court of Appeals. The Court cited Sta. Rosa Realty Development Corporation v. Amante, where it held that the appellate court did not have jurisdiction to consider evidence outside those submitted before the DARAB.

The Supreme Court referenced Salafranca v. Philamlife (Pamplona) Village Homeowners Association, Inc., emphasizing that matters not brought out in the proceedings below will ordinarily not be considered by a reviewing court. Therefore, the Supreme Court did not address the new issues raised by the petitioners, stating they should have been raised during the DARAB proceedings.

In summary, the Supreme Court set aside the Court of Appeals’ decision and reinstated the DARAB’s decision, affirming the Adjudicator’s ruling. This case clarifies the procedural aspects of appealing DARAB decisions and reinforces the importance of raising issues at the appropriate stage of the proceedings. The case also reiterated that lands classified as non-agricultural prior to RA 6657 do not require conversion clearance, while also stressing the need for coordination between the DAR and the Philippine Tourism Authority to determine the specific areas covered by tourism development.

FAQs

What was the central issue in this case?	The central issue was whether a handwritten note by a DARAB member could be the subject of an appeal and whether the Court of Appeals erred in ruling on issues beyond the DARAB’s decision.
Did the Supreme Court address whether Franco’s land should be covered by agrarian reform?	The Supreme Court did not directly address this issue. Instead, it focused on the procedural errors in the appeal process and the impropriety of considering the DARAB member’s handwritten note.
What is the significance of Proclamation No. 2052 in this case?	Proclamation No. 2052 declared certain areas in Cebu as tourist zones, which Franco argued exempted his land from agrarian reform. However, its implementation required coordination between the DAR and the Philippine Tourism Authority.
What is the difference between a judgment and an opinion, according to the Supreme Court?	The Supreme Court stated that a judgment is the final order of the court, while an opinion is an informal expression of the court’s views that does not form part of the judgment. Only the judgment is binding.
Can new issues be raised for the first time on appeal?	No, the Supreme Court emphasized that matters, theories, or arguments not brought out in the proceedings below will not be considered by a reviewing court. Parties cannot change their theory of the case on appeal.
What was the effect of DAR Secretary Garilao’s order on this case?	DAR Secretary Garilao’s order clarified that only specific areas identified for tourism development would be excluded from agrarian reform, requiring coordination between the DAR and the Philippine Tourism Authority.
What is disturbance compensation, and who is entitled to it?	Disturbance compensation is a payment made to tenants or farmworkers who are displaced due to land conversion or other changes in land use. The DAR determines who is eligible for this compensation.
What did the Court say regarding conversion clearance?	The Court reiterated that lands classified as non-agricultural before June 15, 1988, the enactment date of RA 6657, do not need any conversion clearance.

This case serves as a reminder of the importance of following proper legal procedures in agrarian disputes. The Supreme Court’s decision reinforces the principle that only the official judgment of the DARAB is binding, and new issues cannot be raised for the first time on appeal. The ruling also highlights the complexities of balancing tourism development with agrarian reform, requiring careful coordination between government agencies.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: DEPARTMENT OF AGRARIAN REFORM VS. PAULINO FRANCO, G.R. NO. 147479, September 26, 2005