i\epublic of tbe

q[:ourt
;manila
THIRD DIVISION
WELLER JOPSON,
Petitioner,
G.R. No. 191538
- versus -
FABIAN O. MENDEZ, JR. and
Present:
VELASCO, JR., J., Chairperson,
PERALTA,
ABAD,
MENDOZA, and
LEONEN,JJ.
DEVELOPMENT BANK OF Promulgated:
THE PHILIPPINES,

DECISION
PERALTA,J.:
Assailed in this Petition for Review on Certiorari under Rule 45 of
the Rules of Court are the Decision
1
dated July 9, 2009 and Resolution
2
dated February 12, 2010 of the Court of Appeals (CA) in CA-G.R. SP No.
70781.
The facts, as found by the CA, are as follows:
Spouses Laura S. Pascual (Laura) Jose H. Mendoza (Jose)
owned a parcel ofland situated at Naga City, Camarines Sur. The property
had an aggregate area of one hundred one thousand forty-five (101,045)
square meters and was covered by Transfer Certificate of Title (TCT) No.
687. On 26 December 1961, the said property was subdivided into sixty-
three (63) lots through a judicially approved subdivision and became part
of Laura Subdivision. Thus, TCT No. 687 was cancelled and, in its stead,
Penned by Associate Justice Priscilla J. Baltazar-Padilla, with Associate Justices Mariano C. Del
Castillo (now a member of this Court) and Monina Arevalo-Zenarosa, concurring; rollo, pp. 18-31.
' Rollo,pp.32-33. #

Decision - 2 - G.R. No. 191538



TCT No. 986 (covering 31 lots), TCT No. 987 (covering 31 lots) and TCT
No. 988 (covering 1 lot) were issued.

On 4 J anuary 1992, spouses Laura and J ose conveyed to
respondent Development Bank of the Philippines (respondent DBP), by
way of dacion en pago, the parcel of land covered by TCT No. 986
(subject landholding) which has an area of eight thousand nine hundred
forty-six (8,946) square meters. The transfer was evidenced by a Deed of
Conveyance of Real Estate Property in Payment of Debt. As a
consequence, the Registry of Deeds of Naga City cancelled TCT No. 986
and issued TCT No. 1149 in favor of respondent DBP.

Sometime in the year 1990, respondent DBP published an
Invitation to Bid for the conveyance of the subject landholding covered by
TCT No. 1149. On 28 December 1990, the said property was sold for
P1.2M to petitioner Fabian O. Mendez, J r. x x x as the highest bidder.
Thus, TCT No. 1149 was cancelled and, in lieu of it, TCT No. 21190 was
issued to [respondent Mendez].

Sometime in 1991, a Complaint was filed by x x x Weller J opson x
x x with the Provincial Agrarian Reform Adjudicator (PARAD) of
Camarines Sur. It was directed against respondent DBP, [respondent
Mendez] and Leonardo Tominio (Leonardo) for annulment of sale,
preemption/redemption and reinstatement with prayer for a writ of
preliminary injunction and/or restraining order with damages.

In essence, [petitioner] alleged that he is a bona fide tenant-farmer
of the parcel of land subject of the sale between respondent DBP and
[respondent Mendez]; his father Melchor J opson (Melchor), was the
original tenant of subject landholding appointed as such by the spouses
Laura and J ose in 1947; in 1967, he succeeded his father in cultivating the
subject landholding now covered by the present TCT No. 21190 when his
father became ill; from 1967 up to December 1990, he laboriously tilled
and cultivated the parcel of land and religiously shared the harvest with
respondent DBP through its representatives or employees; on 20
December 1990, a certain Leonardo, acting upon the instructions of
[respondent Mendez], unlawfully entered the subject landholding and
ejected him from the same; the sale of the subject landholding by
respondent DBP to petitioner is void because the latter is not qualified to
acquire the same under Republic Act (R.A.) No. 6657; the sale of the
parcel of land is also violative of Executive Order (E.O.) No. 360, series
of 1989, in relation to Section 1 of E.O. No. 407 dated 14 J une 1990; he
was deprived of his preferential right to buy the parcel of land he tenanted
under reasonable terms and conditions as provided for by Section 11, R.A.
No. 3844; in the alternative, he also has the right to redeem the parcel of
land from petitioner at a reasonable price pursuant to Section 12, R.A. No.
3844; the forcible entry by Leonardo upon the instructions of [respondent
Mendez] desecrated his right to security of tenure and deprivation of his
livelihood; he is entitled to the award of actual damages, moral damages,
exemplary damages, attorneys fees and litigation expenses; a writ of
preliminary injunction should be issued to prevent petitioner or his agents
from disposing of the parcel of land.

In his Answer dated 5 November 1991, [respondent Mendez]
denied [petitioner]s allegations and asseverated that the latter has no

Decision - 3 - G.R. No. 191538



cause of action against him; [petitioner] is guilty of laches (or estoppel) for
not having questioned the auction sale of the parcel of land; the PARAD
had no jurisdiction over the case because the parcel of land subject of the
sale is no longer classified as agricultural and it is not located in an
agricultural zone; as compulsory counterclaim, he is entitled to the award
of moral damages, exemplary damages, attorneys fees and litigation
expenses; as cross-claim against respondent DBP, he prayed that in the
event judgment is rendered in [petitioner]s favor, respondent DBP should
shoulder all the monetary awards that will be granted to [petitioner], return
to him the purchase price with interest, reimburse him all the expenses that
he incurred relative to the purchase of the parcel of land and the
improvements thereon, compensate him for lost business opportunities and
pay him for the reliefs in his counterclaim.

Leonardo, in his Answer dated 24 J anuary 1992, denied
[petitioner]s allegations and averred that he was already in possession of
the parcel of land even before 20 December 1990, long before he knew
[respondent Mendez]; it was [petitioner], claiming to be respondent DBPs
caretaker, who placed him in the subject landholding; as counterclaim, he
should be awarded moral damages, attorneys fees and litigation expenses.

In its Amended Answer dated 15 J une 1992, respondent DBP
alleged that [respondent Mendez] accepted the sale will full knowledge of
the extent and nature of the right, title and interest of the former, thus, he
should be the one to assume the risk of any liability, or the extent thereof,
when he purchased the subject landholding.

On 8 October 1993, [respondent Mendez] filed a Motion to
Maintain Status Quo Ante Litem and to Cite Complainant in Contempt as
[petitioner] forcibly entered the parcel of land in the company of armed
men. The motion was resolved by granting [respondent Mendezs] request
and ordering [petitioner] to vacate the parcel of land. [Respondent
Mendez] was, however, ordered to post a cash bond in the amount of
P10,000.00 to answer for any damage [petitioner] may incur upon the
issuance of the order to vacate.
3


In a Decision
4
dated August 25, 1995, the PARAD declared the sale
of the subject property between respondents as a nullity and ordered
respondent DBP to execute the necessary Deed of Transfer of the parcel of
land in favor of the Republic of the Philippines. It held that while the subject
landholding is situated within a district classified as secondary commercial
zone and its subdivision was judicially approved, the same was not duly
converted to non-agricultural use as prescribed by law. Resultantly, the
Register of Deeds of Naga City was ordered to cancel TCT No. 21190. The
dispositive portion of the decision reads:



3
Id. at 19-21. (Citations omitted)
4
Id. at 88-99.


Decision - 4 - G.R. No. 191538



WHEREFORE, judgment is hereby rendered:

1. Declaring the Deed of Absolute Sale executed by respondent
Development Bank of the Philippines (DBP) in favor of co-
respondent Fabian Mendez contrary to law and therefore a
nullity;

2. Ordering DBP to execute the necessary Deed of Transfer in
favor of the Republic of the Philippines represented by the
Department of Agrarian Reform and surrender to the latter
possession of subject landholding for coverage under E.O. No.
947;

3. Ordering DBP to return the purchase price of P1,200,000.00 to
co-respondent Fabian Mendez;

4. Denying the claim for redemption and reinstatement by
petitioner;

5. Ordering the Clerk of the Board, DARAB, Naga City to return
to Fabian Mendez the cash bond of P10,000.00;

6. Dismissing all other claims for lack of merit.

7. Ordering the Register of Deeds, Naga City to cancel TCT No.
21190.

SO ORDERED.
5


Respondents moved for reconsideration of the aforesaid decision and
argued that the parcel of land is no longer agricultural per Zoning Ordinance
No. 603 adopted on December 20, 1978.

In a Resolution
6
dated February 26, 1996, the PARAD reversed its
earlier ruling and declared that the parcel of land in question is duly
classified and zonified as non-agricultural land in accordance with pertinent
laws and guidelines.

Petitioner, thereafter, filed a Notice of Appeal with the DARAB.

In a Decision
7
dated J anuary 25, 2000, the DARAB reversed the
PARADs ruling and held that there is a tenancy relationship between
respondent DBP and petitioner as evidenced by the sharing of harvest
between them. Thus, petitioner is not a mere caretaker but a bona fide
tenant. It, however, did not sustain petitioners claim for redemption of the
5
Id. at 98-99.
6
Id. at 116-118.
7
Id. at 119-131.


Decision - 5 - G.R. No. 191538



subject landholding since he failed to consign with the PARAD a reasonable
amount to cover the price of the land. It held as follows:

WHEREFORE, on the basis of the foregoing, the assailed Order
is hereby REVERSED and a new one entered:

1. Declaring petitioner-appellant entitled to reinstatement to the
subject landholding; and

2. Directing Fabian Mendez and all other persons in his behalf or
under his authority to maintain petitioner-appellant in peaceful
possession and cultivation of the subject-landholding as
agricultural lessee thereof.

SO ORDERED.
8


Respondent Mendez filed a motion for reconsideration against said
decision, while petitioner filed a Petition for Review with the CA advancing
the argument that the PARAD and the DARAB erred and gravely abused
their discretion in denying his right of redemption of the parcel of land. In a
Decision dated November 29, 2001, the CA denied petitioners petition.

In a Resolution
9
dated April 26, 2002, the DARAB denied respondent
Mendezs motion for reconsideration. Accordingly, respondent Mendez filed
an appeal with the CA.

In a Decision dated J uly 9, 2009, the CA nullified and set aside the
decision and resolution of the DARAB. The fallo reads:

WHEREFORE, the foregoing premises considered, the petition is
hereby GRANTED. Accordingly, the challenged Decision and Resolution
of the DARAB, dated 25 J anuary 2000 and 26 April 2002, respectively,
are NULLIFIED and SET ASIDE. The complaint of respondent J opson
before the PARAD is DISMISSED.

SO ORDERED.
10


Unfazed, petitioner filed a Motion for Reconsideration. However, the
same was denied in a Resolution dated February 12, 2010.

Thus, the present petition wherein petitioner raises the following
issues for our resolution:

8
Id. at 131. (Emphasis in the original)
9
Id. at 141-142.
10
Id. at 30. (Emphasis in the original)


Decision - 6 - G.R. No. 191538



1. THE HONORABLE COURT OF APPEALS COMMITTED
REVERSIBLE ERROR OF LAW WHEN IT DISREGARDED THE
SUBSTANTIAL EVIDENCE RULE BY OVERTURNING THE
FINDINGS OF FACT OF THE DARAB THAT PETITIONER IS A
BONAFIDE AGRICULTURAL TENANT OF THE SUBJ ECT
PROPERTY.

2. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN
FINDING THAT THE PARAD AND THE DARAB HAVE NO
J URISDICTION OVER THE CASE.
11


In essence, the issues are: (1) whether petitioner is a bona fide tenant
of the subject property, and (2) whether the PARAD and DARAB have
jurisdiction over the present case.

At the outset, it must be emphasized that in order for a tenancy
agreement to arise, it is essential to establish all its indispensable elements,
viz.: (1) the parties are the landowner and the tenant or agricultural lessee;
(2) the subject matter of the relationship is an agricultural land; (3) there is
consent between the parties to the relationship; (4) the purpose of the
relationship is to bring about agricultural production; (5) there is personal
cultivation on the part of the tenant or agricultural lessee; and (6) the harvest
is shared between the landowner and the tenant or agricultural lessee. All
these requisites are necessary to create a tenancy relationship, and the
absence of one or more requisites will not make the alleged tenant a de facto
tenant.
12


In this case, however, the facts substantiating a de jure tenancy are
missing.

First, besides petitioners bare assertion that a tenancy relationship
exists between him and respondent DBP, no other concrete proof was
presented by petitioner to demonstrate the relationship of petitioner and
respondent DBP as tenant and landowner. In fact, respondent DBP
resolutely argued that petitioner is not a tenant but a mere caretaker of the
subject landholding.

Second, the subject matter of the relationship is not an agricultural
land but a commercial land. Section 3 (c) of Republic Act (R.A.) No. 6657,
13

otherwise known as the Comprehensive Agrarian Reform Law (CARL),
states that an agricultural land refers to land devoted to agricultural activity
11
Id. at 9-10.
12
Masaquel v. Orial, 562 Phil. 645, 653 (2007).
13
An Act Instituting a Comprehensive Agrarian Reform Program to Promote Social Justice and
Industrialization, Providing the Mechanism for its Implementation, and For Other Purposes.


Decision - 7 - G.R. No. 191538



as defined therein and not classified as mineral, forest, residential,
commercial or industrial land.

As per Certification by the Office of the Zoning Administrator of
Naga City, the subject landholding covered by TCT No. 21190 is classified
as secondary commercial zone based on Zoning Ordinance No. 603 adopted
on December 20, 1978 by the City Council and approved by the National
Coordinating Council for Town Planning and Zoning, Human Settlements
Commission on September 24, 1980. Thus, the reclassification of the
subject landholding from agricultural to commercial removes it from the
ambit of agricultural land over which petitioner claims a tenancy
relationship is founded.

As extensively discussed by the CA

Indeed, the subject landholding is no longer an agricultural land
despite its being planted with palay. It had long been reclassified as a
commercial land and it even forms part of Laura Subdivision. Whatever
the landowner does to the subject landholding, like plant it with palay,
does not convert it to an agricultural land nor divest it of its actual
classification. x x x

x x x x

The reclassification of the subject landholding from agricultural to
non-agricultural by the City Council of Naga City through a zoning
ordinance is undoubtedly binding to remove it from the coverage of the
CARL. In Natalia Realty, Inc. v. Department of Agrarian Reform, it was
held that lands not devoted to agricultural activity are outside the coverage
of CARL including lands previously converted to non-agricultural uses
prior to the effectivity of CARL by government agencies other than DAR.
This rule has been reiterated in a number of subsequent cases. Despite
claims that the areas have been devoted for agricultural production, the
Court has upheld the non-agricultural classification made by the NHA
over housing and resettlement projects, zoning ordinances passed by local
government units classifying residential areas, and certifications over
watershed areas issued by the Department of Environment and Natural
Resources (DENR). In addition, the power of the City Council of Naga
City to adopt zoning ordinances is validly recognized under the law. x x x

x x x x

Furthermore, the reclassification of the subject landholding does
not need a conversion clearance from the DAR for it to be legal since such
reclassification occurred prior to 15 J une 1988, the effectivity of R.A. No.
6657. As it is, only land classifications or reclassifications which occur
from 15 J une 1988 onwards require conversion clearance from the DAR.
x x x
14

14
Rollo, pp. 26-27. (Citations omitted)


Decision - 8 - G.R. No. 191538



Third, the essential element of consent is absent. In the present case,
no proof was presented that respondent DBP recognized or hired petitioner
as its legitimate tenant. Besides petitioners self-serving assertions that he
succeeded his father in tilling the subject landholding, no other concrete
evidence was presented to prove consent of the landowner.

Anent the second issue, we rule that the PARAD and the DARAB
have no jurisdiction over petitioners claim.

Specifically, the PARAD and the DARAB have primary and
exclusive jurisdiction, both original and appellate, to determine and
adjudicate all agrarian disputes involving the implementation of the CARL
under R.A. No. 6657. Thus, the jurisdiction of the PARAD and the DARAB
is only limited to cases involving agrarian disputes, including incidents
arising from the implementation of agrarian laws.
15
Section 3 (d) of R.A.
No. 6657 defines an agrarian dispute in this wise:

x x x x

(d) Agrarian dispute refers to any controversy relating to tenurial
arrangements, whether leasehold, tenancy, stewardship or otherwise, over
lands devoted to agriculture, including disputes concerning farmworkers
associations or representation of persons in negotiating, fixing,
maintaining, changing or seeking to arrange terms or conditions of such
tenurial arrangements. It includes any controversy relating to
compensation of lands acquired under R.A. 6657 and other terms and
conditions of transfer of ownership from landowners to farmworkers,
tenants and other agrarian reform beneficiaries, whether the disputants
stand in the proximate relation of farm operator and beneficiary,
landowner and tenant, or lessor and lessee.

From the foregoing, it is clear that no agrarian dispute exists in the
instant case, since what is involved is not an agricultural land and no tenancy
relationship exists between petitioner and respondent DBP.

As aptly held by the CA, for the DARAB to have jurisdiction over a
case, there must be a tenancy relationship between the parties. Perforce, the
ruling of the PARAD, as well as the decision and resolution of the DARAB
which were rendered without jurisdiction, are without force and effect.

WHEREFORE, premises considered, the instant petition is
DENIED. The Decision dated J uly 9, 2009 and Resolution dated February
15
Heirs of Candido del Rosario v. Del Rosario, G.R. No. 181548, June 20, 2012, 674 SCRA 180,
190-191.

Decision - 9 - G.R. No. 191538
12, 2010 of the Court of Appeals, in CA-G.R. SP No. 70781, are hereby
AFFIRMED.
SO ORDERED.
WE CONCUR:
PRESBITER J. VELASCO, JR.
JOSE

ROBERTO A. ABAD
Associate Justice
MARVIC MARIO VICTOR F. LEONE
Associate Justice
ATTESTATION
I attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Court's Division.
I
PRESBITER J. VELASCO, JR.
As ciate Justice
Chairpe on, Third Division
Decision - 10 - G.R. No. 191538
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution and the
Division Chairperson's Attestation, I certify that the conclusions in the
above Decision had been reached in consultation before the case was
assigned to the writer of the opinion of the Court's Division.
MARIA LOURDES P.A. SERENO
Chief Justice