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G.R. No. 164846. June 18, 2008.* STA. MONICA INDUSTRIAL AND DEVELOPMENT CORPORATION, petitioner, vs.

THE DEPARTMENT OF AGRARIAN REFORM REGIONAL DIRECTOR FOR REGION III, PROVINCIAL AGRARIAN REFORM OFFICER OF BULACAN, MUNICIPAL AGRARIAN REFORM OFFICER OF CALUMPIT, BULACAN, and BASILIO DE GUZMAN, respondents. Agrarian Reform; Comprehensive Agrarian Reform Law; Notices; Notice is part of the constitutional right to due process of law.The crux of the petition lies in the requirement of notice of coverage under the CARP law. The statute requires a notice of coverage to be furnished and sent to the landowner. Notice is part of the constitutional right to due process of law. It informs the landowner of the States intention to acquire a private land upon payment of just compensation and gives him the opportunity to present evidence that his landholding is not covered or is otherwise excused from the agrarian law. There is no dispute that a notice of coverage was duly sent to Trinidad. Records show that she participated in the DAR proceedings. As to her, the constitutional requirement of due process was met and satisfied. Same; Same; P.D. No. 27, as amended, forbids the transfer or alienation of covered agricultural lands after October 21, 1972 except to tenant-beneficiary.The sale to Sta. Monica is prohibited. P.D. No. 27, as amended, forbids the transfer or alienation of covered agricultural lands after October 21, 1972 except to the tenant-beneficiary. The agricultural land awarded to De Guzman is covered by P.D. No. 27. He was awarded a certificate of land transfer in July 22, 1981. The sale to Sta. Monica in 1986 is void for being contrary to law. Trinidad remained the owner of the agricultural land. Same; Notice of Coverage; Considering that Trinidad remained to be the true and legal owner of the agricultural land, there is no need for another notice of coverage to be sent or furnished to Sta. Monica. Considering that Trinidad remained to be the true and Sta. Monica Industrial and Development Corporation vs. Department of Agrarian Reform Regional Director for Region III legal owner of the agricultural land, there is no need for another notice of coverage to be sent or furnished to Sta. Monica. At the very least, the notice to her is already notice to Sta. Monica because the corporation acted as a mere conduit of Trinidad. The CA correctly dismissed the petition of Sta. Monica to annul the orders of the Regional Director placing the agricultural land of Trinidad under the agrarian reform law. Same; Same; Piercing the Veil of Corporate Fiction; The use of corporate fiction as a means to evade legal liability is not new. This scheme or device has long been perceived to be used in other fields of law, notably taxation to minimize payment of tax with varying degrees of success and acceptability.The use of corporate fiction as a means to evade legal liability is not new. This scheme or device has long been perceived to be used in other fields of law, notably taxation to minimize payment of tax with varying degrees of success and acceptability. But the continued employment of the scheme in agrarian cases is not only deplorable; it is alarming. It is time to put a lid on the cap. [Sta. Monica Industrial and Development Corporation vs. Department of Agrarian Reform Regional Director for Region III, 555 SCRA 97(2008)] DECISION REYES, R.T., J.: ANG Malawak na Batas sa Repormang Pangsakahan ay binuo upang makalaya ang mga magsasaka mula sa tali ng kahirapan at paghahari ng may-ari ng lupa. Kapag ang kathang-isip na korporasyon ay ginamit na tabing sa katulad na pyudal na pang-aalipin, ang matayog na hangarin ng batas pambukid ay nabibigo at ang mismong suliranin na nais lunasan nito ay nananatili.

Ang belo ng kathang-isip na korporasyon ay pupunitin kapag ito ay ginamit sa maling hangarin at ditapat na layunin. The Comprehensive Agrarian Reform Law[1] was designed precisely to liberate peasant-farmers from the clutches of landlordism and poverty. When corporate fiction is used as a mere smokescreen to the same form of feudal servitude, the lofty aim of the agrarian law is thwarted and the very problem which the law seeks to solve is perpetrated. The veil of corporate fiction will be pierced when used for improper purposes and unfair objectives . Before Us is a petition for review on certiorari of the Decision[2] of the Court of Appeals (CA) dismissing the petition of Sta. Monica Industrial and Development Corporation (Sta. Monica) to annul the Order [3] of the Regional Director, Region III, Department of Agrarian Reform (DAR) placing the landholdings of Asuncion Trinidad under the Comprehensive Agrarian Reform Program (CARP).[4] The Facts Trinidad is the owner of five parcels of land with a total area of 4.69 hectares in Iba Este, Calumpit, Bulacan. Private respondent Basilio De Guzman is the agricultural leasehold tenant of Trinidad. On April 29, 1976, a leasehold contract denominated as Kasunduan ng Buwisan sa Sakahan was executed between Trinidad and De Guzman.[5] As an agricultural leasehold tenant, De Guzman was issued Certificates of Land Transfer on July 22, 1981.[6] Desiring to have an emancipation patent over the land under his tillage, De Guzman filed a petition for the issuance of patent in his name with the Office of the Regional Director of the DAR.[7] The Legal Services Division of the DAR duly sent notices to Trinidad requiring her to comment. Instead of complying, Trinidad filed a motion for bill of particulars.[8] After due proceedings, the Regional Director issued the Order[9] granting the petition of De Guzman, with the following disposition: WHEREFORE, in light of the foregoing analysis and the reasons indicated thereon, an ORDER is hereby issued as follows: 1. PLACING under the coverage of Operation Land Transfer (OLT) pursuant to PD 27/Executive Order No. 228 the landholdings of Asuncion Trinidad with an area of 10.6800 hectares, more or less, located at Iba Este, Calumpit, Bulacan, without prejudice to the exercise of her retention rights if qualified under the law. 2. DIRECTING the MARO of Calumpit, Bulacan and the PARO of Baliuag, Bulacan to cause the generation and issuance of Emancipation Patent in favor of the petitioner and other qualified farmer-beneficiaries over the said landholding in accordance with the actual area of tillages.[10] Trinidad filed a motion for reconsideration but her motion was denied.[11] A year later, petitioner Sta. Monica filed a petition for certiorari and prohibition with the CA assailing the order of the Regional Director. In its petition, Sta. Monica claimed that while it is true that Asuncion Trinidad was the former registered owner of a parcel of land with an area of 83,689 square meters, the said landholding was sold on January 27, 1986.[12] Petitioner was able to acquire 39,547 square meters of the Trinidad property. After the sale, petitioner sought the registration of the portion pertaining to it before the Register of Deeds of the Province of Bulacan. Consequently, a corresponding Transfer Certificate of Title, with No. 301408 (now TCT No. RT 70512) was issued in favor of petitioner.[13]

It was asserted that there was a denial of due process of law because it was not furnished a notice of coverage under the CARP law.[14] In his comment on the petition, De Guzman argued that the alleged sale of the landholding is illegal due to the lack of requisite clearance from the DAR. The said clearance is required under P.D. No. 27,[15] the Tenant Emancipation Decree, which prohibits transfer of covered lands except to tenant-beneficiaries. According to De Guzman, since no clearance was sought from, and granted by, the DAR, the sale in favor of petitioner by Trinidad is inexistent and void. Hence, Trinidad remained the owner of the disputed property. CA Disposition

respect and adherence to this principle must always be maintained by those who wield the power of adjudication. Any act which violates such principle must immediately be struck down. The rule on finality of decisions, orders or resolutions of a judicial, quasi-judicial, or administrative body is not a question of technicality but of substance and merit, the underlying consideration therefore being the protection of the substantive rights of the winning party. Just as a losing party has the right to file an appeal within the prescribed period, the winning party also has the correlative right to enjoy the finality of the resolution of his/her case.[20] Sta. Monica sought reconsideration but it was denied. Hence, the present recourse.[21]

On May 26, 2004, the CA rendered a decision dismissing the petition of Sta. Monica, disposing as follows: Issue WHEREFORE, premises considered, the instant petition is hereby DENIED for lack of merit. SO ORDERED.[16] The CA held that Sta. Monica is not a real party-in-interest because it cannot be considered as an owner of the land it bought from Trinidad, thus:[17] It appears from the records of this case that the sale between Trinidad and the petitioner is enjoined by Department Memorandum Circular No. 2-A, implementing the provisions of Presidential Decree (P.D.) No. 27, which prohibits the transfer of ownership of landholdings covered by P.D. No. 27 after 21 October 1972 without the requisite clearance from the DARexcept to the tenant-beneficiary. Thus, the title to the subject landholding remained with the previous owner, Asuncion Trinidad. This effectively deprives the petitioner of interest to question the orders of the Regional Director of the DAR relative to the latters directive placing the subject landholding under the coverage of Operation Land Transfer and the subsequent issuance of an Emancipation Patent in favor of private respondent De Guzman. One having no right or interest to protect cannot invoke the jurisdiction of the court as a party plaintiff (in this case petitioner) in an action. A real party in interest is the party who stands to be benefited or injured by the judgment in the suit, or the party entitled to the avails of the suit.[18] (Citations omitted) The CA added that even assuming that Sta. Monica is a real party-in-interest, it was not denied due process because it had constructive notice of the proceeding which involved its property: Even assuming, without admitting, that petitioner is the real party in interest by reason of the sale of the subject landholding in its favor, it cannot be said that petitioner was denied due process because of lack of notice of the proceedings before the DAR. It is significant to note that Asuncion Trinidad is the treasurer of petitioner, based on the corporations General Information Sheet. While it cannot be said that there was proper notice to the corporation, being a corporate officer of the petitioner, there was at least constructive notice of the fact that there was a proceeding which involved the property of the corporation of which it may be deprived should an adverse decision be rendered by the DAR. [19] The CA also ruled that the assailed orders of the Regional Director have already attained finality because it was not appealed to the DAR Secretary. Furthermore, the assailed orders have long become final and executory, there being no appeal undertaken to the Secretary of the Department of Agrarian Reform. Citing Fortich vs.Corona, et al., the Supreme Court aptly ruled in this wise: The orderly administration of justice requires that the judgments/resolutions of a court or quasi-judicial body must reach a point of finality set by law, rules and regulations. The noble purpose is to write finis to disputes once and for all. This is a fundamental principle in our justice system, without which there would be no end to litigations. Utmost The petition is bereft of merit. Trinidad is still deemed the owner of the agricultural land sold to Sta. Monica; no need for separate notice of coverage under the CARP law. The crux of the petition lies in the requirement of notice of coverage under the CARP law. The statute requires a notice of coverage to be furnished and sent to the landowner. [23] Notice is part of the constitutional right to due process of law. It informs the landowner of the States intention to acquire a private land upon payment of just compensation and gives him the opportunity to present evidence that his landholding is not covered or is otherwise excused from the agrarian law. There is no dispute that a notice of coverage was duly sent to Trinidad. Records show that she participated in the DAR proceedings. As to her, the constitutional requirement of due process was met and satisfied. Petitioner Sta. Monica, however, claims that it is the owner of the agricultural land awarded to De Guzman. It acquired the land from Trinidad by sale in 1986 and it was issued a transfer certificate of title. Sta. Monica claims denial of due process of law because it was not furnished the required notice of coverage under the CARP law. Respondent De Guzman, on the other hand, contends that the sale between Trinidad and Sta. Monica is null and void because it is a prohibited transaction under Presidential Decree No. 27 (P.D. No. 27), as amended.[24] De Guzman also claims that Trinidad is a corporate officer of Sta. Monica. It was her duty to inform Sta. Monica of the pending proceeding with the DAR.[25] He maintains that Sta. Monica was not denied due process because there was constructive notice. Sta. Monica was sufficiently informed of the pending DAR proceedings.[26] Records disclose that there was indeed a deed of sale between Trinidad and Sta. Monica over the agricultural land awarded to De Guzman. Sta. Monica was also issued a new transfer certificate of title over the land. If We rely solely on the sale, it is a foregone conclusion that Sta. Monica was denied due process of law. As the owner on record of the agricultural land, it should have been given a notice of coverage. However, there is much to be said of the attendant circumstances that lead Us to conclude that notice of coverage to Trinidad is also sufficient notice to Sta. Monica. Moreover, We find that the sale between Trinidad and Sta. Monica was a mere ruse to frustrate the implementation of the agrarian law. First, the sale to Sta. Monica is prohibited. P.D. No. 27, as amended, forbids the transfer or alienation of covered agricultural lands after October 21, 1972except to the tenant-beneficiary. The agricultural land awarded to De Guzman is covered by P.D. No. 27. He was awarded a certificate of land transfer in July 22, 1981. The sale to Sta. Monica in 1986 is void for being contrary to law.[27] Trinidad remained the owner of the agricultural land. Sta. Monica seeks reversal of the CA decision on the lone ground that THE ASSAILED DECISION AND RESOLUTION OF THE COURT OF APPEALSARE CONTRARY TO EXISTING LAWS, RELEVANT JURISPRUDENCE ON THE MATTER AND THE FACTUAL CIRCUMSTANCES.[22] Our Ruling

In Heirs of Batongbacal v. Court of Appeals,[28] involving the similar issue of sale of a covered agricultural land under P.D. No. 27, this Court held: Clearly, therefore, Philbanking committed breach of obligation as an agricultural lessor. As the records show, private respondent was not informed about the sale between Philbanking and petitioner, and neither was he privy to the transfer of ownership from Juana Luciano to Philbanking. As an agricultural lessee, the law gives him the right to be informed about matters affecting the land he tills, without need for him to inquire about it. xxxx In other words, transfer of ownership over tenanted rice and/or corn lands after October 21, 1972 is allowed only in favor of the actual tenant-tillers thereon. Hence, the sale executed by Philbanking on January 11, 1985 in favor of petitioner was in violation of the aforequoted provision of P.D. 27 and its implementing guidelines, and must thus be declared null and void.[29] (Underscoring supplied) Second, buyer Sta. Monica is owned and controlled by Trinidad and her family. Records show that Trinidad, her husband and two sons own more than 98%[30] of the outstanding capital stock of Sta. Monica. They are all officers of the corporation.[31] There are only two non-related incorporators who own less than one percent of the outstanding capital stock of Sta. Monica and who are not officers of the corporation. To be sure, Trinidad and her family exercise absolute control of the corporate affairs of Sta. Monica. As owners of 98% of the outstanding capital stock, they are the beneficial owners of all the assets of the company, including the agricultural land sold by Trinidad to Sta. Monica. Third, Trinidad and her counsel failed to notify the DAR of the prior sale to Sta. Monica during the administrative proceedings. Worse, Trinidad feigned ignorance of the sale by filing a motion for bill of particulars seeking specifics from De Guzman of her alleged landholdings which are subject of his petition with theDAR. It is highly unusual and unbelievable for her not to know, or at least be aware, of the sale to Sta. Monica. She herself signed the deed of sale as seller. She is also a stockholder and officer of Sta. Monica. More importantly, she cannot feign ignorance of De Guzmans claim because he was her agricultural tenant since the 1970s. She knows, or at least ought to know, that the subject matter of the petition with the DAR was her own landholding, which she sold to Sta. Monica in direct violation of P.D. No. 27. The apparent lack of candor is heightened by the fact that both Trinidad and Sta. Monica are represented by the same counsel, Atty. Ramon Gutierrez. We cannot stretch Our credulity on how Trinidad filed a motion for bill of particulars with the DAR seeking specifics on the sale to Sta. Monica when she herself signed for the vendor as a party to the transaction. It is the duty of Atty. Gutierrez to inform the DAR, at the very first opportunity, of the sale to Sta. Monica. He was utterly remiss of this duty. Instead of informing the DAR, Trinidad and her counsel engaged in wild goose chase and stonewalling, feigning ignorance when they ought to have informed the DAR of the sale to Sta. Monica. Atty. Gutierrez is reminded that, as an officer of the court, he owes it the duty of candor, honesty and fairness.[32] Fourth, it was only after an adverse decision against Trinidad that Sta. Monica suddenly filed a petition for certiorari with the CA questioning the lack of notice of coverage under the CARP law. It is highly unlikely that Sta. Monica, an artificial being acting only through its duly authorized representatives, was not sufficiently informed or had no constructive knowledge of the DAR proceedings. Trinidad and by extension, her family members, were informed or should be sufficiently aware of the DAR proceedings. They are all stockholders and corporate officers of Sta. Monica. They knew, they ought to know, that Sta. Monica would suffer damage should the DAR award, as it awarded, the agricultural land to De Guzman.

As directors and corporate officers, they owe a duty of care to the corporation to inform it of the pending proceedings with the DAR. Fifth, the ultimate factor that betrays Trinidad and Sta. Monica is the continued payment of lease rentals by De Guzman. Records show that De Guzman paid and continued to pay lease rentals to Trinidad even after she sold the land to Sta. Monica. The receipt[33] dated May 30, 2002 discloses that De Guzman paid 40 cavans of palay to Clodinaldo dela Cruz, the authorized representative of Trinidad, as lease rentals for the agricultural land. It is incredible that Trinidad would still continue to collect lease rentals from De Guzman if she had long sold the agricultural land to Sta. Monica in 1986. The continued payment of lease rentals indicates that Trinidad never sold the agricultural land to Sta. Monica. Evidently, the sale was a mere ruse to skirt coverage under the comprehensive agrarian reform law. All these circumstances indicate that Trinidad has remained as the real owner of the agricultural land sold to Sta. Monica. The sale to Sta. Monica is not valid because it is prohibited under P.D. No. 27. More importantly, it must be deemed as a mere ploy to evade the applicable provisions of the agrarian law. But it is a fiat that the corporate vehicle cannot be used as a shield to protect fraud or justify wrong. Thus, the veil of corporate fiction will be pierced when it is used to defeat public convenience and subvert public policy. Considering that Trinidad remained to be the true and legal owner of the agricultural land, there is no need for another notice of coverage to be sent or furnished to Sta. Monica. At the very least, the notice to her is already notice to Sta. Monica because the corporation acted as a mere conduit of Trinidad. The CA correctly dismissed the petition of Sta. Monica to annul the orders of the Regional Director placing the agricultural land of Trinidad under the agrarian reform law. Final Note This case can be viewed as a microcosm of the persistent agrarian reform problem in Our country. For one, it illustrates the arduous legal battle that tenant-farmers have to endure in order to be finally freed from the bondage of the soil. De Guzman battled for almost eight years to acquire the agricultural land fromTrinidad. Others are not as equally lucky. For another, it shows the subtle but illegal measures taken by landowners to evade coverage under the CARP law. Of course, there are also tales of landowners who unduly suffer either the abuse of some farmers or the harsh consequences of the law. In hindsight, it is quite ironic that We are still faced with the same agrarian reform problem which We have sought to eradicate several years ago when the CARP law was first introduced. Feudal system of land ownership still persists in the countryside and most farmers are still tied to their bondage. It is more ironic when the problem is taken in its historical context, the CARP law being the fifth land reform law passed since President Quezon. To Our mind, part of the problem lies with the CARP law itself. As crafted, the law has its own loopholes. It provides for a long list of exclusions. Some landowners used these exclusions to go around the law. There is now a growing trend of land conversion in the countryside suspiciously to evade coverage under the CARP law. Of course, the solution to this problem lies with Congress. It is high time We sounded the call for a more realistic, rational comprehensive agrarian reform law. The dubious use of seemingly legal means to sidestep the CARP law persists. Corporate law is resorted to by way of circling around the agrarian law. As this case illustrates, agricultural lands are being transferred, simulated or otherwise, to corporations which are fully or at least predominantly controlled by former landowners, now called stockholders. Through this strategy, it is anticipated that the corporation, by virtue of its corporate fiction, will shield the landowners from agricultural claims of tenant-farmers. The use of corporate fiction as a means to evade legal liability is not new. This scheme or device has long been perceived to be used in other fields of law, notably taxation to minimize payment of tax with varying degrees of success and acceptability. But the continued employment of the scheme in agrarian cases is not only deplorable; it is alarming. It is time to put a lid on the cap.

WHEREFORE, the petition is DENIED. The appealed Decision of the Court of Appeals is AFFIRMED. SO ORDERED.
*

Vice Associate Justice Antonio Eduardo B. Nachura. Justice Nachura is on official leave per Special Order No. 507 dated May 28, 2008. [1] Republic Act No. 6657, approved on June 10, 1988, entitled An Act Instituting A Comprehensive Agrarian Reform Program To Promote Social Justice And Industrialization, Providing The Mechanism For Its Implementation, And For Other Purposes. [2] Rollo, pp. 37-40. Penned by Associate Justice Rosmari D. Carandang, with Associate Justices Godardo A. Jacinto and Elvi John S. Asuncion, concurring. [3] Id. at 42-47. [4] See note 1. [5] Rollo, pp. 42-47. [6] Id. [7] Rollo, p. 38. [8] Id. at 38-39. [9] Id. at 42-44. [10] Id. at 38, 43-44. [11] Id. at 135. [12] Id. at 38. [13] Id. [14] Id. at 39. [15] Presidential Decree No. 27 promulgated on October 21, 1972, entitled Decreeing the Emancipation of Tenants From the Bondage of the Soil, Transferring to Them the Ownership of the Land They Till and Providing the Instruments and Mechanism Therefor and Executive Order No. 228 issued on July 17, 1987, entitled Declaring Full Land Ownership to Qualified Farmer Beneficiaries Covered by Presidential Decree No. 27; Determining the Value of Remaining Unvalued Rice and Corn Lands Subject to P.D. No. 27; and Providing for the Manner of Payment by the Farmer Beneficiary and Mode of Compensation to the Landowner.
[16] [17] [18]

Actions; Appeals; The general rule is that appeal is perfected by filing a notice of appeal and paying the requisite docket fees and other lawful fees; Exceptions.The general rule is that appeal is perfected by filing a notice of appeal and paying the requisite docket fees and other lawful fees. However, all general rules admit of certain exceptions. In Mactan Cebu International Airport Authority v. Mangubat, 312 SCRA 463 (1999), where the docket fees were paid six days late, we said that where the party showed willingness to abide by the rules by immediately paying the required fees and taking into consideration the importance of the issues raised in the case, the same calls for judicial leniency, thus: In all, what emerges from all of the above is that the rules of procedure in the matter of paying the docket fees must be followed. However, there are exceptions to the stringent requirement as to call for a relaxation of the application of the rules, such as: (1) most persuasive and weighty reasons; (2) to relieve a litigant from an injustice not commensurate with his failure to comply with the prescribed procedure; (3) good faith of the defaulting party by immediately paying within a reasonable time from the time of the default; (4) the existence of special or compelling circumstances; (5) the merits of the case; (6) a cause not entirely attributable to the fault or negligence of the party favored by the suspension of the rules; (7) a lack of any showing that the review sought is merely frivolous and dilatory; (8) the other party will not be unjustly prejudiced thereby; (9) fraud, accident, mistake or excusable negligence without appellants fault; (10) peculiar legal and equitable circumstances attendant to each case; (11) in the name of substantial justice and fair play; (12) importance of the issues involved; and (13) exercise of sound discretion by the judge guided by all the attendant circumstances. Concomitant to a liberal interpretation of the rules of procedure should be an effort on the part of the party invoking liberality to adequately explain his failure to abide by the rules. Anyone seeking exemption from the application of the Rule has the burden of proving that exceptionally meritorious instances exist which warrant such departure. Same; Same; Administrative Law; Procedural Rules and Technicalities; If the Highest Court of the land itself relaxes its rules in the interest of substantive justice, then what more the administrative bodies which exercise quasi-judicial functions? The loss of a persons properties due to a days delay in paying the appeal fee is too harsh a consequence.We have not been oblivious to or unmindful of the extraordinary situations that merit liberal application of the Rules, allowing us, depending on the circumstances, to set aside technical infirmities and give due course to the appeal. In cases where we dispense with the technicalities, we do not mean to undermine the force and effectivity of the periods set by law. In those rare cases where we did not stringently apply the procedural rules, there always existed a clear need to prevent the commission of a grave injustice. Our judicial system and the courts have always tried to maintain a healthy balance between the strict enforcement of procedural laws and the guarantee that every litigant be given the full opportunity for the just and proper disposition of his cause. If the Highest Court of the land itself relaxes its rules in the interest of substantive justice, then what more the administrative bodies which exercise quasi-judicial functions? It must be emphasized that the goal of courts and quasi-judicial bodies, above else, must be to render substantial justice to the parties. In this case, petitioner was only one day late in paying the appeal fee, and he already stands to lose his titles to the subject properties. We find this too harsh a consequence for a days delay. Worthy to note is the fact that petitioner actually paid the appeal fee; only, he was a day late. That petitioner immediately paid the requisite appeal fee a day after the deadline displays his willingness to comply with the requirement therefor. Same; Same; Same; Department of Agrarian Reform Adjudication Board (DARAB); The remedy from an order, award, judgment or final order of the DARAB is a petition for review taken to the Court of Appeals under Rule 43 and not a petition for certiorari under Rule 65.When petitioner sought recourse to the Court of Appeals via a Petition for Certiorari under Rule 65 of the Rules of Court, his Petition was dismissed. The Court of Appeals held that the petitioner availed himself of the wrong remedy as an appeal from the order, award, judgment or final order of the DARAB shall be taken to the Court of Appeals by filing a petition for review under Rule 43 of the Rules of Court and not a petition for certiorari under Rule 65. On this point, we agree with the Court of Appeals. Same; Same; Procedural Rules and Technicalities; A petition for certiorari is dismissible for being the wrong remedy; Exceptions.All things considered, however, we do not agree in the conclusion of the Court of Appeals dismissing petitioners Petition based on a procedural faux pax. While a petition for certiorari is dismissible for being the wrong remedy, there are exceptions to this rule, to wit: (a) when public welfare and the advancement of public policy dictates; (b) when the broader interest of justice so requires; (c) when the writs issued are null and void; or (d) when the questioned order amounts to an oppressive exercise of judicial authority. Same; Same; Same; It is a far better and more prudent cause of action for the court to excuse a technical lapse and afford the parties a review of the case to attain the ends of justice, rather than dispose of the case on technicality and cause grave injustice to the parties, giving a false impression of speedy disposal of cases while actually resulting in more delay, if not a miscarriage of justice.The Court has allowed some meritorious cases to proceed despite

Id. at 40. Id. at 39. Id. [19] Id. [20] Id. at 39-40. [21] Id. at 116. [22] Id. at 20. [23] Republic Act No. 6657, Sec. 16, Chapter V. [24] As implemented by DAR Memorandum Circular No. 2-A Series of 1973, as amended. [25] Rollo, p. 137. [26] Id. [27] Civil Code, Art. 1409. [28] G.R. No. 125063, September 24, 2002, 389 SCRA 517. [29] Heirs of Batongbacal v. Court of Appeals, id. at 525. [30] Rollo, p. 147. [31] Id. at 143. [32] Code of Professional Responsibility, Canon 10. [33] Rollo, p. 148.

G.R. No. 173415. March 28, 2008.* MARIANO TANENGLIAN, petitioner, vs. SILVESTRE LORENZO, MARIO DAPNISAN, TIMOTEO DAPNISAN, FELIX DAPNISAN, TONAS TAMPIC, REGINA TOBANES, NORMA SIMEON, RODOLFO LACHICA, ARNES SERIL, RODOLFO LAVARO, FAUSTINO SALANGO, PEDRO SANTIAGO, TEOFILO FULMANO, GEORGE KITOYAN, PEPTIO GAPAD, DAMIAN PENERIA, MIKE FERNANDEZ, PABLO SACPA, WILFREDO AQUINO, ANDREW HERRERO, ROGELIO CARREON, MANUEL LAGARTERA and LORENTINO SANTOS, respondents.

inherent procedural defects and lapses. This is in keeping with the principle that rules of procedure are mere tools designed to facilitate the attainment of justice and that strict and rigid application of rules which would result in technicalities that tend to frustrate rather than promote substantial justice must always be avoided. It is a far better and more prudent cause of action for the court to excuse a technical lapse and afford the parties a review of the case to attain the ends of justice, rather than dispose of the case on technicality and cause grave injustice to the parties, giving a false impression of speedy disposal of cases while actually resulting in more delay, if not a miscarriage of justice. Same; Same; Same; Administrative Law; There can be no blinking at the fact that under Rule 43, Section 4 of the Rules of Court, the Court of Appeals may grant an additional period of fifteen (15) days only within which to file the petition for reviewin other words, the period to appeal from quasi-judicial agencies to the Court of Appeals under Rule 43 is neither an impregnable nor an unyielding rule.The period to appeal had lapsed so that even if the Court of Appeals considered the petition as one for review under Rule 43 of the Rules of Court, still the petition was filed beyond the reglementary period. But, there can be no blinking at the fact that under Rule 43, Section 4 of the Rules of Court, the Court of Appeals may grant an additional period of fifteen (15) days only within which to file the petition for review. By any reckoning, the Court of Appeals may even grant an additional period of fifteen (15) days within which to file the petition under Rule 43 of the Rules of Court. In other words, the period to appeal from quasi-judicial agencies to the Court of Appeals under Rule 43 is neither an impregnable nor an unyielding rule. Same; Administrative Law; Department of Agrarian Reform Adjudication Board (DARAB); Jurisdiction; Tenancy; Elements; For DARAB to have jurisdiction over a case, there must exist a tenancy relationship between the parties; Tenants are defined as persons whoin themselves and with the aid available from within their immediate farm householdersthey cultivate the lands belonging to or possessed by another with the latters consent, for purposes of production, they share the produce with the landholder under the share tenancy system, or pay to the landholder a price certain or ascertainable in produce of money or both under the leasehold tenancy system.The issue involved in this case is no less than the jurisdiction of the Regional Arbitrator to render its Decision dated 16 August 1999 declaring the subject properties as ancestral lands. As well, it is too flagrant to be ignored that these lands are covered by a Torrens title in the name of the petitioner. The Court of Appeals should have looked past rules of technicality to resolve the case on its merits. For DARAB to have jurisdiction over a case, there must exist a tenancy relationship between the parties. A tenancy relationship cannot be presumed. There must be evidence to prove the tenancy relations such that all its indispensable elements must be established, to wit: (1) the parties are the landowner and the tenant; (2) the subject is agricultural land; (3) there is consent by the landowner; (4) the purpose is agricultural production; (5) there is personal cultivation; and (6) there is sharing of the harvests. All these requisites are necessary to create tenancy relationship, and the absence of one or more requisites will not make the alleged tenant a de facto tenant. In Heirs of Rafael Magpily v. De Jesus, 474 SCRA 366 (2005), tenants are defined as persons whoin themselves and with the aid available from within their immediate farm householdersthey cultivate the lands belonging to or possessed by another with the latters consent; for purposes of production, they share the produce with the landholder under the share tenancy system, or pay to the landholder a price certain or ascertainable in produce of money or both under the leasehold tenancy system. Same; Same; Same; National Commission on Indigenous Cultural Communities/Indigenous People (NICP); R.A. No. 8371; The National Commission on Indigenous Cultural Communities/Indi-genous People (NICP) is the primary government agency responsible for the formulation and implementation of policies, plans and programs to promote and protect the rights and well-being of the indigenous cultural communities/indigenous people and the recognition of their ancestral domains as well as their rights thereto; A Department of Agrarian Reform Adjudication Board (DARAB) Regional Adjudicator oversteps the boundaries of his jurisdiction when he makes a declaration that certain properties are ancestral lands and proceeds to award the same to the claimants jurisdiction over the delineation and recognition of the same is explicitly conferred on the National Commission on Indigenous Cultural Communities/Indigenous People (NICP).Republic Act No. 8371 creates the National Commission on Indigenous Cultural Communities/Indigenous People (NCIP) which shall be the primary government agency responsible for the formulation and implementation of policies, plans and programs to promote and protect the rights and well-being of the indigenous cultural communities/indigenous people (ICCs/IPs) and the recognition of their ancestral domains as well as their rights thereto. Prior to Republic Act No. 8371, ancestral domains and lands were delineated under the Department of Environment and Natural Resources (DENR) and governed by DENR Administrative Order No. 2, series of 1993. Presently, the process of delineation and recognition of ancestral domains and lands is guided by the principle of self-delineation and is set forth under Sections 52 and 53, Chapter VIII of Republic Act No. 8371; and in Part I, Rule VII of NCIP Administrative Order No. 01-98 (Rules and Regulations Implementing Republic Act No. 8371). Official delineation is under the jurisdiction of the Ancestral Domains Office (ADO) of the NCIP. It is

irrefragable, therefore, that the Regional Adjudicator overstepped the boundaries of his jurisdiction when he made a declaration that the subject properties are ancestral lands and proceeded to award the same to the respondents, when jurisdiction over the delineation and recognition of the same is explicitly conferred on the NCIP. Same; Same; Same; Land Titles; Quieting of Title; Words and Phrases; The Department of Agrarian Reform Adjudication Board (DARAB) Regional Adjudicator acts without jurisdiction in entertaining a collateral attack on a partys Transfer Certificates of Titles (TCTs); A suit for quieting of title is an action quasi in rem, which is conclusive only to the parties to the suit; A collateral attack is made when, in another action to obtain a different relief, an attack on the judgment is made as an incident to said action, as opposed to a direct attack against a judgment which is made through an action or proceeding, the main object of which is to annul, set aside, or enjoin the enforcement of such judgment, if not yet carried into effect, or, if the property has been disposed of, the aggrieved party may sue for recovery.The Regional Adjudicator acted without jurisdiction in entertaining a collateral attack on petitioners TCTs. In an earlier case for quieting of title instituted by the petitioner before the trial court, which reached this Court as G.R. No. 118515, petitioners ownership and titles to the subject properties had been affirmed with finality, with entry of judgment having been made therein on 15 January 1996. A suit for quieting of title is an action quasi in rem, which is conclusive only to the parties to the suit. It is too glaring to escape our attention that several of the respondents herein were the defendants in the suit for quieting of title before the trial court and the subsequent petitioners in G.R. No. 118515. The finality of the Decision in G.R. No. 118515 is therefore binding upon them. Although the Decision in G.R. No. 118515 is not binding on the other respondents who were not parties thereto, said respondents are still confronted with petitioners TCTs which they must directly challenge before the appropriate tribunal. Respondents, thus, cannot pray for the Regional Adjudicator to declare petitioners TCTs null and void, for such would constitute a collateral attack on petitioners titles which is not allowed under the law. A Torrens title cannot be collaterally attacked. A collateral attack is made when, in another action to obtain a different relief, an attack on the judgment is made as an incident to said action, as opposed to a direct attack against a judgment which is made through an action or proceeding, the main object of which is to annul, set aside, or enjoin the enforcement of such judgment, if not yet carried into effect; or, if the property has been disposed of, the aggrieved party may sue for recovery. Same; Same; Same; Same; Once a decree of registration is made under the Torrens System, and the reglementary period has passed within which the decree may be questioned, the title is perfected and cannot be collaterally questioned later onit has become an ancient rule that the issue on the validity of title, i.e., whether or not it was fraudulently issued, can only be raised in an action expressly instituted for that purpose. The petitioners titles to the subject properties have acquired the character of indeafeasibility, being registered under the Torrens System of registration. Once a decree of registration is made under the Torrens System, and the reglementary period has passed within which the decree may be questioned, the title is perfected and cannot be collaterally questioned later on. To permit a collateral attack on petitioners title, such as what respondents attempt, would reduce the vaunted legal indeafeasibility of a Torrens title to meaningless verbiage. It has, therefore, become an ancient rule that the issue on the validity of title, i.e., whether or not it was fraudulently issued, can only be raised in an action expressly instituted for that purpose. Same; Judgments; Any decision rendered without jurisdiction is a total nullity and may be struck down anytime. Any decision rendered without jurisdiction is a total nullity and may be struck down anytime. In Tambunting, Jr. v. Sumabat, 470 SCRA 92 (2005), we declared that a void judgment is in legal effect no judgment, by which no rights are divested, from which no rights can be obtained, which neither binds nor bonds anyone, and under which all acts performed and all claims flowing therefrom are void. In the Petition at bar, since the Regional Adjudicator is evidently without jurisdiction to rule on respondents complaint without the existence of a tenancy relationship between them and the petitioner, then the Decision he rendered is void. [Tanenglian vs. Lorenzo, 550 SCRA 348(2008)]

DECISION CHICO-NAZARIO, J.:

This is an appeal by certiorari under Rule 45 of the 1997 Rules of Civil Procedure seeking the reversal and setting aside of the Resolution[1] dated 5 April 2006 of the Court of Appeals in CA-G.R. SP No. 93668 dismissing outright the petition for certiorari filed therewith by petitioner Mariano Tanenglian on the grounds that it was the wrong remedy and it was filed beyond the 15-day reglementary period. Likewise assailed herein is the Resolution[2] dated 4 July 2006 of the appellate court denying petitioners Motion for Reconsideration.

This case involves two parcels of land (subject properties), located and adjacent to the Sto. Tomas Baguio Road, with areas of 7,860 square meters and 21,882 square meters, covered respectively by Transfer Certificates of Title (TCT) No. T-29281 and T-29282 registered in the Registry of Deeds of Baguio City both in the name of petitioner. Respondents Silvestre Lorenzo, et al., members of the Indigenous Cultural Minority of the Cordillera Administrative Region, filed a Petition[3] for Redemption under Sec. 12, Republic Act No. 3844[4] dated 29 July 1998 before the Department of Agrarian Reform Adjudication Board (DARAB) praying that: (1) they be allowed to exercise their right of redemption over the subject properties; (2) TCTs No. T-29281and T-29282 in the name of petitioner be declared null and void; (3) the subject properties be declared as ancestral land pursuant to Section 9 of Republic Act No. 6657;[5] and (4) petitioner be ordered to pay disturbance compensation to respondents. In a Decision dated 16 August 1999, the Regional Adjudicator held: WHEREFORE, ALL THE PREMISES CONSIDERED AND IN THE BEST INTEREST OF AGRARIAN JUSTICE, JUDGMENT IS HEREBY RENDERED IN FAVOR OF [HEREIN RESPONDENTS] AND AGAINST [HEREIN PETITIONER] AS FOLLOWS: 1. Declaring that the parcels of land respectively occupied by [respondents] as ancestral lands pursuant to the provisions of Section 9 of Republic Act No. 6657. Declaring [respondents] as the ancestral landowners of the parcels of land which they are occupying and tilling; Ordering the Department of Agrarian Reform through its Regional Office, the Cordillera Administrative Region, Baguio City to acquire the said parcels of land respectively occupied by [respondents] for distribution to them in order to ensure their economic, social and cultural well-being pursuant to provisions of Section 9 of RA No. 6657; Ordering the Regional Engineering Office of DAR-CAR, Baguio City to conduct subdivision survey on the said parcels of land occupied by [respondents] and for DARCAR to issue individual Certificate of Land Ownership Awards (CLOAs) and have the same registered with the Office of the Registry of Deeds of Baguio City; Ordering [petitioner] or anybody under his command not to disturb the peaceful possession of [respondents] ancestral landholdings; and Ordering the Office of the Register of Deeds, Baguio City to cancel Transfer Certificates of Title Nos. T-29281 and T-29282 both in the name of [petitioner] and for the latter to surrender to the Office of the Register of Deeds of Baguio City the owners duplicate certificate copies of said titles.[6]

It is noteworthy that both the aforesaid NOTICE OF APPEAL and APPEAL FEE were not filed and paid, respectively, within the REGLEMENTARY PERIOD as provided for by the DARAB NEW RULES OF PROCEDURE under Section 5, Rule XIII which states: SECTION 5. Requisites and perfection of the Appeal. a) The Notice of Appeal shall be filed within the reglementary period as provided for in Section 1 of this Rule. x x x b) An appeal fee of Five Hundred Pesos (P500.00) shall be paid by the appellant within the reglementary period to the DAR Cashier where the Office of the Adjudicator is situated. x x x. Under the 3rd paragraph of said SECTION 5, it further states: Non-compliance with the above-mentioned requisites shall be a ground for the dismissal of the appeal. The records of this case show that the [petitioner] through counsel filed his Motion for Reconsideration of the Decision of this case on September 13, 1999 which was the 15 th day of said Reglementary Period. The 15th day was supposed to have been on September 11, 1999 counted from August 28, 1999, the following day after [petitioner] through counsel received a copy of the Decision on August 27, 1999 but because September 11, 1999 was a Saturday, the 15th day was September 13, 1999, the following working day. Now, nowhere on the records of this case show that the required Appeal Fee was paid on or before the 15th day of the Reglementary Period. The records of this case also show that this instant NOTICE OF APPEAL was filed on October 19, 1999, (Postmarked Makati Central P.O., M.M.) the day when [petitioner] through counsel received copy of the Denial of the said MOTION FOR RECONSIDERATION. Since September 13, 1999 was the 15th day of said 15-day reglementary period, this instant NOTICE OF APPEAL is considered filed out of time. Even the Appeal Fee of Five Hundred Pesos (P500.00) in POSTAL MONEY ORDER, it is postmarked October 20, 1999, MAKATI CENTRAL P.O. M.M. Since September 13, 1999 was the 15th day of said 15-day reglementary period, this APPEAL FEE is considered paid out of time. Additionally, even granting without admitting that this instant NOTICE OF APPEAL and APPEAL FEE were filed and paid, respectively, within the required reglementary period, [petitioner] through counsel miserably failed to state any ground in the Notice of Appeal as provided for under SECTION 2, RULE XIII of the DARAB NEW RULES OF PROCEDURE. [9] WHEREFORE, premises considered, and pursuant to the provisions of SECTION 5 and SECTION 2, Rule XIII of the DARAB NEW RULES OF PROCEDURE, this instant NOTICE OF APPEAL is hereby DENIED.[10]

2.

3.

4.

5.

6.

Petitioner received a copy of the afore-quoted Decision on 27 August 1999. He filed with the Regional Adjudicator a motion for reconsideration thereof on 13 September 1999, which the Regional Adjudicator denied in his Order dated 11 October 1999. Petitioner received the Regional Adjudicators Order denying his motion on 19 October 1999. On the same day, 19 October 1999, petitioner filed a Notice of Appeal,[7] but the appeal fee of P500.00 in postal money order was postmarked 20 October 1999. Petitioners Notice of Appeal was denied by the Regional Adjudicator in his Order dated 26 October 1999.[8] The Regional Adjudicators latest Order reads: ORDER Submitted before the Board through this Adjudicator is a NOTICE OF APPEAL, dated October 19, 1999, of the DECISION in the above-entitled case dated August 16, 1999 with a POSTAL MONEY ORDER in the amount of FIVE HUNDRED PESOS (P500.00) ONLY (APPEAL FEE) POSTMARKED Makati Central Post Office, M.M., dated October 20, 1999 filed by [herein petitioner] through counsel.

Petitioner filed a Motion for Reconsideration on 5 November 1999 but the same was denied by the Regional Adjudicator on 15 November 1999. Respondents filed a Motion for Execution on 27 October 1999. The Regional Adjudicator issued a Writ of Execution dated 17 November 1999.[11] Petitioner thereafter filed an original action for certiorari before the DARAB to annul the Order dated 26 October 1999, Order dated 15 November 1999 and the Writ of Execution dated 17 November 1999, all issued by the Regional Adjudicator. In a Resolution dated 5 May 2005, the DARAB denied petitioners petition forcertiorari for lack of merit,[12] holding that:

While it is true that the filing of the Notice of Appeal dated October 19, 1999 was made within the reglementary period to perfect the same, however, the required appeal fee was not paid within the reglementary period because the last day to perfect an appeal is October 19, 1999, while the appeal fee in a form of postal money order is postmarked October 20, 1999. Precisely, there is no payment of appeal fee within the 15-day reglementary period to perfect an appeal. Therefore, the order of the [Regional Adjudicator] denying the notice of appeal of the petitioner is well within the ambit of the provisions of the above-quoted Rule, particularly the last paragraph thereof, hence the instant petition must necessarily fail.[13] Petitioners motion for reconsideration of the foregoing resolution wa s denied by the DARAB in another Resolution dated 17 January 2006,[14] a copy of which was received by petitioner on 2 February 2006. Refusing to concede, petitioner filed a Petition for Certiorari[15] under Rule 65 with the Court of Appeals on 17 March 2006. In a Resolution dated 5 April 2006, the Court of Appeals dismissed the Petition, reasoning as follows: Sections 1 and 4, Rule 43 of the 1997 Rules of Civil Procedure provide that an appeal from the award, judgment, final order or resolution of the Department of Agrarian Reform under Republic Act No. 6657, among other quasi-judicial agencies, shall be taken by filing with the Court of Appeals a petition for review within fifteen (15) days from notice thereof, or of the denial of the motion for new trial or reconsideration duly filed in accordance with the governing law of the court or agency a quo. xxxx Even if we consider the instant petition for certiorari as a petition for review, the same must still be dismissed for having been filed beyond the reglementary period of fifteen (15) days from receipt of a copy of the Resolution dated January 17, 2006. As pointed out in the abovecited case, appeals from all quasi-judicial bodies shall be made by way of petition for review with the Court of Appeals regardless of the nature of the question raised. Well-settled is the rule that certiorari is not available where the proper remedy is appeal in due course and such remedy was lost because of respondents failure to take an appeal. The special civil action of certiorari is not and can not be made a substitute for appeal or a lost appeal.[16] Petitioners motion for reconsideration of the afore-quoted ruling was denied by the appellate court in a Resolution dated 4 July 2006. Hence, the present Petition, raising the following issues: (a) Whether or not the Court of Appeals correctly dismissed the Petition under Rule 65 filed by the Petitioner mainly on the ground that the proper remedy is a Petition under Rule 43 of the Rules of Court. Whether or not the Regional Adjudicator acted within his authority when he declared the subject parcels of land as ancestral lands. Whether or not the Regional Adjudicator acted within his authority when he declared that the titles of the petitioner should be declared null and void.

The Regional Adjudicator denied petitioners Notice of Appeal because t he latter was delayed for one day in the payment of appeal fee. The 2003 Rules of Procedure of the DARAB lays down the following procedure: RULE XIV APPEALS Section 1. Appeal to the Board. An appeal may be taken to the Board from a resolution, decision or final order of the Adjudicator that completely disposes of the case by either or both of the parties within a period of fifteen (15) days from receipt of the resolution/decision/final order appealed from or of the denial of the movants motion for reconsideration in accordance with Section 12, Rule IX, by: 1.1 filing a Notice of Appeal with the Adjudicator who rendered order appealed from; 1.2 furnishing copies of said Notice of Appeal to all parties and the Board; and 1.3 paying an appeal fee of Seven Hundred Pesos (Php700.00) to the DAR Cashier where the Office of the Adjudicator is situated or through postal money order, payable to the DAR Cashier where the Office of the Adjudicator is situated, at the option of the appellant. A pauper litigant shall be exempt from the payment of the appeal fee. Proof of service of Notice of Appeal to the affected parties and to the Board and payment of appeal fee shall be filed, within the reglementary period, with the Adjudicator a quo and shall form part of the records of the case. Non-compliance with the foregoing shall be a ground for dismissal of the appeal. SECTION 4. Perfection of Appeal. An appeal is deemed perfected upon compliance with Section 1 of this Rule. A pauper litigants appeal is deemed perfected upon the filing of the Notice of Appeal in accordance with said Section 1 of this Rule. the decision or final

The general rule is that appeal is perfected by filing a notice of appeal and paying the requisite docket fees and other lawful fees.[17] However, all general rules admit of certain exceptions. In Mactan Cebu International Airport Authority v. Mangubat[18] where the docket fees were paid six days late, we said that where the party showed willingness to abide by the rules by immediately paying the required fees and taking into consideration the importance of the issues raised in the case, the same calls for judicial leniency, thus: In all, what emerges from all of the above is that the rules of procedure in the matter of paying the docket fees must be followed. However, there are exceptions to the stringent requirement as to call for a relaxation of the application of the rules, such as: (1) most persuasive and weighty reasons; (2) to relieve a litigant from an injustice not commensurate with his failure to comply with the prescribed procedure; (3) good faith of the defaulting party by immediately paying within a reasonable time from the time of the default; (4) the existence of special or compelling circumstances; (5) the merits of the case; (6) a cause not entirely attributable to the fault or negligence of the party favored by the suspension of the rules; (7) a lack of any showing that the review sought is merely frivolous and dilatory; (8) the other party will not be unjustly prejudiced thereby; (9) fraud, accident, mistake or excusable negligence without

(b)

(c)

Preliminarily, petitioner is actually asking us to rule on the propriety of (1) the denial of his Notice of Appeal by the Regional Adjudicator, affirmed by the DARAB; and (2) the dismissal of his Petition for Certiorari by the Court of Appeals.

appellants fault; (10) peculiar legal and equitable circumstances attendant to each case; (11) in the name of substantial justice and fair play; (12) importance of the issues involved; and (13) exercise of sound discretion by the judge guided by all the attendant circumstances. Concomitant to a liberal interpretation of the rules of procedure should be an effort on the part of the party invoking liberality to adequately explain his failure to abide by the rules. Anyone seeking exemption from the application of the Rule has the burden of proving that exceptionally meritorious instances exist which warrant such departure. [19]

or reconsideration duly filed in accordance with the governing law of the court or agency a quo. Only one (1) motion for reconsideration shall be allowed. Upon proper motion and the payment of the full amount of the docket fee before the expiration of the reglementary period, the Court of Appeals may grant an additional period of fifteen (15) days only within which to file the petition for review. No further extension shall be granted except for the most compelling reason and in no case to exceed fifteen (15) days. In Nippon Paint Employees Union-Olalia v. Court of Appeals,[21] we clarified:

We have not been oblivious to or unmindful of the extraordinary situations that merit liberal application of the Rules, allowing us, depending on the circumstances, to set aside technical infirmities and give due course to the appeal. In cases where we dispense with the technicalities, we do not mean to undermine the force and effectivity of the periods set by law. In those rare cases where we did not stringently apply the procedural rules, there always existed a clear need to prevent the commission of a grave injustice. Our judicial system and the courts have always tried to maintain a healthy balance between the strict enforcement of procedural laws and the guarantee that every litigant be given the full opportunity for the just and proper disposition of his cause. [20] If the Highest Court of the land itself relaxes its rules in the interest of substantive justice, then what more the administrative bodies which exercise quasi-judicial functions? It must be emphasized that the goal of courts and quasi-judicial bodies, above else, must be to render substantial justice to the parties. In this case, petitioner was only one day late in paying the appeal fee, and he already stands to lose his titles to the subject properties. We find this too harsh a consequence for a days delay. Worthy to note is the fact that petitioner actually paid the appeal fee; only, he was a day late. That petitioner immediately paid the requisite appeal fee a day after the deadline displays his willingness to comply with the requirement therefor. When petitioner sought recourse to the Court of Appeals via a Petition for Certiorari under Rule 65 of the Rules of Court, his Petition was dismissed. The Court of Appeals held that the petitioner availed himself of the wrong remedy as an appeal from the order, award, judgment or final order of the DARAB shall be taken to the Court of Appeals by filing a petition for review under Rule 43 of the Rules of Court and not a petition for certiorari under Rule 65. On this point, we agree with the Court of Appeals. Pertinent provisions of Rule 43 of the Rules of Court governing appeals from quasi-judicial agencies to the Court of Appeals, provide: SECTION 1. Scope. This Rule shall apply to appeals from judgments or final orders of the Court of Tax Appeals and from awards, judgments, final orders or resolutions of or authorized by any quasi-judicial agency in the exercise of its quasi-judicial functions. Among these agencies are the Civil Service Commission, Central Board of Assessment Appeals, Securities and Exchange Commission, Office of the President, Land Registration Authority, Social Security Commission, Civil Aeronautics Board, Bureau of Patents, Trademarks and Technology Transfer, National Electrification Administration, Energy Regulatory Board, National Telecommunications Commission, Department of Agrarian Reform under Republic Act No. 6657, Government Service Insurance System, Employees Compensation Commission, Agricultural Inventions Board, Insurance Commission, Philippine Atomic Energy Commission, Board of Investments, Construction Industry Arbitration Commission, and voluntary arbitrators authorized by law. xxxx SEC. 3. Where to appeal. An appeal under this Rule may be taken to the Court of Appeals within the period and in the manner herein provided, whether the appeal involves questions of fact, of law, or mixed questions of fact and law. SEC. 4. Period of appeal. The appeal shall be taken within fifteen (15) days from notice of the award, judgment, final order or resolution, or from the date of its last publication, if publication is required by law for its effectivity, or of the denial of petitioners motion for new trial

It is elementary in remedial law that the use of an erroneous mode of appeal is cause for dismissal of the petition for certiorari and it has been repeatedly stressed that a petition forcertiorari is not a substitute for a lost appeal. This is due to the nature of a Rule 65 petition for certiorari which lies only where there is no appeal, and no plain, speedy and adequate remedy in the ordinary course of law. As previously ruled by this Court: x x x We have time and again reminded members of the bench and bar that a special civil action for certiorari under Rule 65 lies only when there is no appeal nor plain, speedy and adequate remedy in the ordinary course of law. Certiorari can not be allowed when a party to a case fails to appeal a judgment despite the availability of that remedy, certiorari not being a substitute for lost appeal. The remedies of appeal and certiorari are mutually exclusive and not alternative or successive.

Petitioner clearly availed himself of the wrong mode of appeal in bringing his case before the Court of Appeals for review. Petitioner filed with the Court of Appeals the special civil action of certiorari under Rule 65 of the Rules of Court instead of a petition for review under Rule 43, not because it was the only plain, speedy, and adequate remedy available to him under the law, but, obviously, to make up for the loss of his right to an ordinary appeal. It is elementary that the special civil action of certiorari is not and cannot be a substitute for an appeal, where the latter remedy is available, as it was in this case. A special civil action under Rule 65 of the Rules of Court cannot cure a partys failure to timely file a petition for review under Rule 43 of the Rules of Court. Rule 65 is an independent action that cannot be availed of as a substitute for the lost remedy of an ordinary appeal, including that under Rule 43, especially if such loss or lapse was occasioned by a partys neglect or error in the choice of remedies.[22] All things considered, however, we do not agree in the conclusion of the Court of Appeals dismissing petitioners Petition based on a procedural faux pax. While a petition for certiorari is dismissible for being the wrong remedy, there are exceptions to this rule, to wit: (a) when public welfare and the advancement of public policy dictates; (b) when the broader interest of justice so requires; (c) when the writs issued are null and void; or (d) when the questioned order amounts to an oppressive exercise of judicial authority. [23] In Sebastian v. Morales,[24] we ruled that rules of procedure must be faithfully followed except only when, for persuasive reasons, they may be relaxed to relieve a litigant of an injustice not commensurate with his failure to comply with the prescribed procedure, thus: [C]onsidering that the petitioner has presented a good cause for the proper and just determination of his case, the appellate court should have relaxed the stringent application of technical rules of procedure and yielded to consideration of substantial justice.[25]

The Court has allowed some meritorious cases to proceed despite inherent procedural defects and lapses. This is in keeping with the principle that rules of procedure are mere tools designed to facilitate the attainment of justice and that strict and rigid application of rules which would result in technicalities that tend to frustrate rather than promote substantial justice must always be avoided. It is a far better and more prudent cause of action for the court to excuse a technical lapse and afford the parties a review of the case to attain the ends of

justice, rather than dispose of the case on technicality and cause grave injustice to the parties, giving a false impression of speedy disposal of cases while actually resulting in more delay, if not a miscarriage of justice. [26] We find that petitioners case fits more the exception rather than the general rule. Taking into account the importance of the issues raised in the Petition, and what petitioner stands to lose, the Court of Appeals should have given due course to the said Petition and treated it as a petition for review. By dismissing the Petition outright, the Court of Appeals absolutely foreclosed the resolution of the issues raised therein. Indubitably, justice would have been better served if the Court of Appeals resolved the issues that were raised in the Petition. Conspicuously, the period to appeal had lapsed so that even if the Court of Appeals considered the petition as one for review under Rule 43 of the Rules of Court, still the petition was filed beyond the reglementary period. But, there can be no blinking at the fact that under Rule 43, Section 4 of the Rules of Court, the Court of Appeals may grant an additional period of fifteen (15) days only within which to file the petition for review. By any reckoning, the Court of Appeals may even grant an additional period of fifteen (15) days within which to file the petition under Rule 43 of the Rules of Court. In other words, the period to appeal from quasi-judicial agencies to the Court of Appeals under Rule 43 is neither an impregnable nor an unyielding rule. The issue involved in this case is no less than the jurisdiction of the Regional Arbitrator to render its Decision dated 16 August 1999 declaring the subject properties as ancestral lands. As well, it is too flagrant to be ignored that these lands are covered by a Torrens title in the name of the petitioner. The Court of Appeals should have looked past rules of technicality to resolve the case on its merits. For DARAB to have jurisdiction over a case, there must exist a tenancy relationship between the parties. A tenancy relationship cannot be presumed. There must be evidence to prove the tenancy relations such that all its indispensable elements must be established, to wit: (1) the parties are the landowner and the tenant; (2) the subject is agricultural land; (3) there is consent by the landowner; (4) the purpose is agricultural production; (5) there is personal cultivation; and (6) there is sharing of the harvests. All these requisites are necessary to create tenancy relationship, and the absence of one or more requisites will not make the alleged tenant a de factotenant.[27] In Heirs of Rafael Magpily v. De Jesus,[28] tenants are defined as persons who - in themselves and with the aid available from within their immediate farm householders they cultivate the lands belonging to or possessed by another with the latters consent; for purposes of production, they share the produce wi th the landholder under the share tenancy system, or pay to the landholder a price certain or ascertainable in produce of money or both under the leasehold tenancy system. In this case, respondents did not allege much less prove that they are tenants of the subject properties. There is likewise no independent evidence to prove any of the requisites of a tenancy relationship between petitioner and respondents. What they insist upon is that they are occupying their ancestral lands covered by the protection of the law. In his Decision, the Regional Adjudicator himself found that there was no tenancy relationship between petitioner and respondents, to wit: [Herein petitioner] pleaded for his defense to the claims of [herein respondents] right of redemption contending that the [respondents] have not proven any tenurial relationship with him. Indeed, the records show that herein [respondents] have not proven their tenurial relationship with [petitioner], hence Section 12 of Republic Act No. 3844, as amended, does not apply to the said claim of right of redemption. As to the claim of [respondents], that is, for disturbance compensation under Section 36(1) of Republic Act No. 3844, said provision of law to the opinion of the Board through this Adjudicator, cannot apply in the said claim since [respondents] have not also proven tenancyrelationship which is a requirement to be entitled to disturbance compensation.[29]

Moreover, the Regional Adjudicator in his Decision dated 16 August 1999 found that: The third claim of herein Petitioners as prayed for is their right to ancestral lands under Section 9 of Republic Act No. 6657 which provides as follows: SECTION 9. ANCESTRAL LANDS. For purposes of this act, ancestral lands of each indigenous cultural community shall include but not limited to lands in the actual, continuous and open possession and occupation of the community and its members: Provided, that the Torrens System shall be respected. The rights of these communities of their ancestral land shall be protected to insure their economic, social and cultural well-being. In line with the principles of self-determination and autonomy, the system of land ownership, land use and the modes of settling land disputes of all these communities must be recognized and respected. (Underscoring Supplied.) Any provision of law to the contrary notwithstanding, the PARC may suspend the implementation of the act with respect to ancestral lands for the purpose of identifying and delineating such lands; Provided, that in the autonomous regions, the respective legislatures may enact their own laws in ancestral domain subject to the provisions of the constitution and the principles enumerated, initiated in this Act and other (sic). Applying the aforecited provisions of law, it is clear without fear of contradiction that herein Petitioners are members of the indigenous cultural community (the Kankanais and Ibalois) of the Cordillera Administrative Region (CAR). It is also clear that they have been in the actual, continuous and in open possession and occupation of the community as evidenced by residential houses, tax declarations and improvements as seen during the ocular inspection (the property in question). While it is true that the aforecited provisions of law provides an exception that is: Provided, that the Torrens System shall be respected, so that in this instant case, there is a CONFLICT in that while the property in question is occupied by herein Petitioners, the same property is titled (T-29281 and T-29282) in the name of herein Respondent, MARIANO TAN ENG LIAN married to ALETA SO TUN (a Chinese) who are not members of the cultural minority. In this case, the Torrens System shall be respected. But under the 2nd paragraph of said law, it went further to say, THE RIGHT OF THESE COMMUNITIES TO THEIR ANCESTRAL LANDS SHALL BE PROTECTED TO ENSURE THEIR ECONOMIC, SOCIAL AND CULTURAL WELL-BEING. IN LINE WITH THE PRINCIPLES OF SELF-DETERMINATION AND AUTONOMY, THE SYSTEM OF LAND OWNERSHIP, LAND USE AND THE MODES OF SETTLING LAND DISPUTES OF ALL THESE COMMUNITIES MUST BE RECOGNIZED AND RESPECTED. (Underscoring supplied.) It is therefore the considered opinion of the Board through this Adjudicator that the property subject of this case which is an ancestral land be acquired by the government (through the Regional Office of the Department of Agrarian Reform of the Cordillera Administrative Region,Baguio City), for eventual distribution to the herein Petitioners. This is the spirit of the law.[31]

It is worthy to note that the Regional Adjudicator, in ruling that the subject properties are ancestral lands of the respondents, relied solely on the definition of ancestral lands under Section 9 of Republic Act No. 6657. However, a special law, Republic Act No. 8371, otherwise known as the Indigenous Peoples Rights Act of 1997, specifically governs the rights of indigenous people to their ancestral domains and lands. Section 3(a) and (b)[32] of Republic Act No. 8371 provides a more thorough definition of ancestral domains and ancestral lands:

Under law and settled jurisprudence, and based on the records of this case, the Regional Adjudicator evidently has no jurisdiction to hear and resolve respondents complaint. In the absence of a tenancy relationship, the case falls outside the jurisdiction of the DARAB; it is cognizable by the Regular Courts. [30]

SECTION 3. Definition of Terms. For purposes of this Act, the following terms shall mean: a) Ancestral Domains Subject to Section 56 hereof, refers to all areas generally belonging to ICCs/IPs comprising lands, inland waters, coastal areas, and natural resources therein, held under a claim of ownership, occupied or possessed by ICCs/IPs, by themselves or through their ancestors, communally or individually since time immemorial, continuously to the present except when interrupted by war, force majeure or displacement by force, deceit, stealth or as a consequence of government projects or any other voluntary dealings entered into by government and private individuals/corporations, and which are necessary to ensure their economic, social and cultural welfare. It shall include ancestral lands, forests, pasture, residential, agricultural, and other lands individually owned whether alienable and disposable or otherwise, hunting grounds, burial grounds, worship areas, bodies of water, mineral and other natural resources, and lands which may no longer be exclusively occupied by ICCs/IPs but from which they traditionally had access to for their subsistence and traditional activities, particularly the home ranges of ICCs/IPs who are still nomadic and/or shifting cultivators; b) Ancestral Lands Subject to Section 56 hereof, refers to lands occupied, possessed and utilized by individuals, families and clans who are members of the ICCs/IPs since time immemorial, by themselves or through their predecessors-in-interest, under claims of individual or traditional group ownership, continuously, to the present except when interrupted by war, force majeure or displacement by force, deceit, stealth, or as a consequence of government projects and other voluntary dealings entered into by government and private individuals/corporations, including, but not limited to, residential lots, rice terraces or paddies, private forests, swidden farms and tree lots.

time Platon acquired the property, it was already subdivided into two (2) lots hence, she was issued TCT Nos. T-20830 (Exhibit G) and T-20831 (Exhibit H). Meanwhile, on December 22, 1977, P.D. 1271 was issued nullifying all decrees of registration and certificates of title issued pursuant to decisions of the Court of First Instance of Baguio and Benguet in petition for the judicial reopening of Civil Reservation Case No. 1, G.L.R.O. Record No. 211 on the ground of lack of jurisdiction but allowed time to the title holders concerned to apply for the validation of their titles under certain conditions. The aforecited two (2) paragraphs give credence to the allegation of the Petitioners in their original petition (nos. 16, 17 and 18) that the titles of Respondents predecessors-in-interest were secured through fraud. They referred as an example a letter (Annex E for Petitioners) coming from the Land Management Bureau, Manila which made the recommendation as follows: RECOMMENDATION In view of the foregoing findings, it is respectfully recommended that the steps be taken in the proper court of justice for the cancellation of the Original Certificates of Title No. 0-131 of Ulbano Alsio and its corresponding derivative titles so that the land be reverted to the mass of the public domain and thereafter, dispose the same to qualified applicants under the provisions of RA No. 730.[37]

Once more, the Regional Adjudicator acted without jurisdiction in entertaining a collateral attack on petitioners TCTs. Republic Act No. 8371 creates the National Commission on Indigenous Cultural Communities/Indigenous People (NCIP) which shall be the primary government agency responsible for the formulation and implementation of policies, plans and programs to promote and protect the rights and well-being of the indigenous cultural communities/indigenous people (ICCs/IPs) and the recognition of their ancestral domains as well as their rights thereto.[33] Prior to Republic Act No. 8371, ancestral domains and lands were delineated under the Department of Environment and Natural Resources (DENR) and governed by DENR Administrative Order No. 2, series of 1993. Presently, the process of delineation and recognition of ancestral domains and lands is guided by the principle of self-delineation and is set forth under Sections 52 and 53, Chapter VIII of Republic Act No. 8371; [34] and in Part I, Rule VII of NCIP Administrative Order No. 01-98 (Rules and Regulations Implementing Republic Act No. 8371).[35] Official delineation is under the jurisdiction of the Ancestral Domains Office (ADO) of the NCIP.[36] It is irrefragable, therefore, that the Regional Adjudicator overstepped the boundaries of his jurisdiction when he made a declaration that the subject properties are ancestral lands and proceeded to award the same to the respondents, when jurisdiction over the delineation and recognition of the same is explicitly conferred on the NCIP. The Regional Adjudicator even made the following disposition on petitioners TCTs: As to the two (2) TCTs (T-29281 and T-29282) issued to herein respondent, the records (Annex C for Respondent) of this case show under the 3rd and 4th paragraphs of the DECISION dated June 28, 1991 provides: The subject parcels of land were originally titled in the name of ULBANA ALSIO under Original Certificate of Title No. 0-131 which she obtained on July 15, 1965 (Exhibit D) through a petition for the judicial reopening of Civil Reservation Case No. 1, G.L.R.O. Record No. 211` (Exhibits A and B) that was granted by the Court of First Instance of the City of Baguio in its decision dated February 08, 1965 (Exhibit C) subsequently by Alsio to Jose Perez (Exhibit I) in turn to Rosario Oreta (Exhibit J) and then to Lutgarda Platon on April 30, 1972 (Exhibit K). At the In an earlier case for quieting of title instituted by the petitioner before the trial court, which reached this Court as G.R. No. 118515,[38] petitioners ownership and titles to the subject properties had been affirmed with finality, with entry of judgment having been made therein on 15 January 1996. A suit for quieting of title is an action quasi in rem,[39] which is conclusive only to the parties to the suit. It is too glaring to escape our attention that several of the respondents herein were the defendants in the suit for quieting of title before the trial court and the subsequent petitioners in G.R. No. 118515.[40] The finality of the Decision in G.R. No. 118515 is therefore binding upon them.[41] Although the Decision in G.R. No. 118515 is not binding on the other respondents who were not parties thereto, said respondents are still confronted with petitioners TCTs which they must directly challenge before the appropriate tribunal. Respondents, thus, cannot pray for the Regional Adjudicator to declare petitioners TCTs null and void, for such would constitute a collateral attack on petitioners titles which is not allowed under the law. A Torrens title cannot be collaterally attacked.[42] A collateral attack is made when, in another action to obtain a different relief, an attack on the judgment is made as an incident to said action,[43] as opposed to a direct attack against a judgment which is made through an action or proceeding, the main object of which is to annul, set aside, or enjoin the enforcement of such judgment, if not yet carried into effect; or, if the property has been disposed of, the aggrieved party may sue for recovery.[44] The petitioners titles to the subject properties have acquired the character of indeafeasibility, being registered under the Torrens System of registration. Once a decree of registration is made under the Torrens System, and the reglementary period has passed within which the decree may be questioned, the title is perfected and cannot be collaterally questioned later on.[45] To permit a collateral attack on petitioners title, such as what respondents attempt, would reduce the vaunted legalindeafeasibility of a Torrens title to meaningless verbiage.[46] It has, therefore, become an ancient rule that the issue on the validity of title, i.e., whether or not it was fraudulently issued, can only be raised in an action expressly instituted for that purpose. [47] Any decision rendered without jurisdiction is a total nullity and may be struck down anytime. [48] In Tambunting, Jr. v. Sumabat,[49] we declared that a void judgment is in legal effect no judgment, by which no rights are divested, from which no rights can be obtained, which neither binds nor bonds anyone, and under which all acts performed and all claims flowing therefrom are void. In the Petition at bar, since the Regional Adjudicator is evidently without

jurisdiction to rule on respondents complaint without the existence of a tenancy relationship between them and the petitioner, then the Decision he rendered is void. WHEREFORE, premises considered, the instant petition is GRANTED. The Resolutions of the Court of Appeals dated 5 April 2006 and 4 July 2006 areREVERSED and SET ASIDE. The Decision dated 16 August 1999 of the Regional Adjudicator in Cases No. DCN NO 0117-98 B CAR to DCN 0140-98 B CAR is declared NULL and VOID, and the respondents petition therein is ordered DISMISSED, without prejudice to the filing of the proper case before the appropriate tribunal. No costs. SO ORDERED. * Per Special Order No. 497, dated 14 March 2008, signed by Chief Justice Reynato S. Puno designating Associate Justice Dante O. Tinga to replace Associate Justice Consuelo Ynares-Santiago, who is on official leave under the Courts Wellness Program and assigni ng Associate Justice Alicia Austria-Martinez as Acting Chairperson. Penned by Associate Justice Marina L. Buzon with Associate Justices Aurora SantiagoLagman and Arcangelita Romilla-Lontok, concurring. Rollo, pp. 30-34. Id. at 36-41. Docketed as DCN 0117-98-B-CAR to DCN-0140-98-B-CAR. Code of Agrarian Reform of the Philippines also known as An Act To Ordain The Agricultural Land Reform Code And To Institute Land Reforms In The Philippines, Including The Abolition Of Tenancy And The Channeling Of Capital Into Industry, Provide For The Necessary Implementing Agencies, Appropriate Funds Therefor And For Other Purposes. Section 12 reads: Sec. 12. Lessees Right of Redemption. In case the landholding is sold to a third person without the knowledge of the agricultural lessee, the latter shall have the right to redeem the same at a reasonable price and consideration: x x x. The Comprehensive Agrarian Reform Law of 1988. Rollo, pp. 81-82. Id. at 83. Id. at 85. Section 1. Grounds. The aggrieved party may appeal to the Board from a final order, resolution or decision of the Adjudicator on any of the following grounds: a) That errors in the findings of facts or conclusions of laws were committed which, if not corrected, would cause grave and irreparable damage or injury to the appellant; xxxx c) That the order, resolution or decision was obtained through fraud or coercion. Rollo, pp. 85-86. Memorandum of Respondents, temporary rollo, p. 3. Rollo, p. 89. Id. at 94-95. Id. at 99. Id. at 103. Id. at 31-34. Baniqued v. Ramos, G.R. No. 158615, 4 March 2005, 452 SCRA 813, 818. 371 Phil. 394 (1999). KLT Fruits, Inc. v. WSR Fruits, Inc., G.R. No. 174219, 23 November 2007; Villena v. Rupisan, G.R. No. 167620, 3 April 2007, 520 SCRA 346, 367-368. Neypes v. Court of Appeals, G.R. No. 141524, 14 September 2005, 469 SCRA 633, 643. G.R. No. 159010, 19 November 2004, 443 SCRA 286, 291. See Centro Escolar University Faculty and Allied Workers Union-Independent v. Court of Appeals, G.R. No. 165486, 31 May 2006, 490 SCRA 61, 69; Hanjin Engineering and Construction Co., Ltd. v. Court of Appeals, G.R. No. 165910, 10 April 2006, 487 SCRA 78, 100. Hanjin Enginerring and Construction Co., Ltd. v. Court of Appeals, ibid. 445 Phil 595, 604 (2003). Vallejo v. Court of Appeals. G.R. No. 156413, 14 April 2004, 427 SCRA 658, 668. Id. Suarez v. Saul, G.R. No. 166664, 20 October 2005, 473 SCRA 628, 634. G.R. No. 167748, 8 November 2005, 474 SCRA 366, 375.

[29] [30]

[1]

[2] [3] [4]

[5] [6] [7] [8] [9]

[10] [11] [12] [13] [14] [15] [16] [17] [18] [19]

[20] [21] [22]

[23] [24] [25] [26] [27] [28]

Rollo, p. 78. Suarez v. Saul, supra note 27 at 634. [31] Rollo, pp. 78-79. [32] The Indigenous Peoples Rights Act of 1997. [33] Section 38. [34] Sec. 52. Delineation Process. The identification and delineation of ancestral domains shall be done in accordance with the following procedures: a) Ancestral Domains Delineated Prior to this Act . The provisions hereunder shall not apply to ancestral domains/lands already delineated according to DENR Administrative Order No. 2, series of 1993, nor to ancestral lands and domains delineated under any other community/ancestral domain program prior to the enactment of this law. ICCs/IPs whose ancestral lands/domains were officially delineated prior to the enactment of this law shall have the rights to apply for the issuance of a Certificate of Ancestral Domain Title (CADT) over the area without going through the process outlined hereunder; b) Petition for Delineation. The process of delineating a specific perimeter may be initiated by the NCIP with the consent of the ICC/IP concerned, or through a Petition for Delineation filed with the NCIP, by a majority of the members of the ICCs/IPs; c) Delineation Proper. The official delineation of ancestral domain boundaries including census of all community members therein, shall be immediately undertaken by the Ancestral Domains Office upon filing of the application by the ICCs/IPs concerned. Delineation will be done in coordination with the community concerned and shall at all times include genuine involvement and participation by the members of the communities concerned; d) Proof Required. Proof of Ancestral Domain claims shall include the testimony of elders or community under oath, and other documents directly or indirectly attesting to the possession or occupation of the area since time immemorial by such ICCs/IPs in the concept of owners which shall be any one (1) of the following authentic documents: (1) Written accounts of the ICCs/IPs customs and traditions; (2) Written accounts of the ICCs/IPs political structure and institution; (3) Pictures showing long term occupation such as those of old improvements, burial grounds, sacred places and old villages; (4) Historical accounts, including pacts and agreements concerning boundaries entered into by the ICCs/IPs concerned with other ICCs/IPs; (5) Survey plans and sketch maps; (6) Anthropological data; (7) Genealogical surveys; (8) Pictures and descriptive histories of traditional communal forests and hunting grounds; (9) Pictures and descriptive histories of traditional landmarks such as mountains, rivers, creeks, ridges, hills, terraces and the like; and (10) Write-ups of names and places derived from the native dialect of the community. e) Preparation of Maps. On the basis of such investigation and the findings of fact based thereon, the Ancestral Domains Office of the NCIP shall prepare a perimeter map, complete with technical description, and a description of the natural features and landmarks embraced therein; f) Report of Investigation and Other Documents . A complete copy of the preliminary census and a report of investigation, shall be prepared by the Ancestral Domains Office of the NCIP. g) Notice and Publication. A copy of each document, including a translation in the native language of the ICCs/IPs concerned shall be posted in a prominent place therein for at least fifteen (15) days. A copy of the document shall also be posted at the local, provincial and regional offices of the NCIP, and shall be published in a newspaper of general circulation once a week for two (2) consecutive weeks to allow other claimants to file opposition thereto within fifteen (15) days from date of such publication: Provided, That in areas where no such newspaper exists, broadcasting in a radio station will be a valid substitute: Provided, further, That mere posting shall be deemed sufficient if both newspaper and radio station are not available. h) Endorsement to NCIP. Within fifteen (15) days from publication, and of the inspection process, the Ancestral Domains Office shall prepare a report to the NCIP endorsing a favorable action upon a claim that is deemed to have sufficient proof. However, if the proof is deemed insufficient, the Ancestral Domains Office shall require the submission of additional evidence: Provided, That the Ancestral Domains Office shall reject any claim that is deemed patently false or fraudulent after inspection and verification: Provided, further, That in case of rejection, the Ancestral Domains Office

shall give the applicant due notice, copy furnished all concerned, containing the grounds for denial. The denial shall be appealable to the NCIP: Provided, furthermore, That in cases where there are conflicting claims among ICCs/IPs on the boundaries of ancestral domain claims, the Ancestral Domains Office shall cause the contending parties to meet and assist them in coming up with a preliminary resolution of the conflict, without prejudice to its full adjudication according to the section below; i) Turnover of Areas Within Ancestral Domains Managed by Other Government Agencies . The Chairperson of the NCIP shall certify that the area covered is an ancestral domain. The secretaries of the Department of Agrarian Reform, Department of Environment and Natural Resources, Department of the Interior and Local Government, and Department of Justice, the Commissioner of the National Development Corporation, and any other government agency claiming jurisdiction over the area shall be notified thereof. Such notification shall terminate any legal basis for the jurisdiction previously claimed; j) Issuance of CADT. ICCs/IPs whose ancestral domains have been officially delineated and determined by the NCIP shall be issued a CADT in the name of the community concerned, containing a list of all those identified in the census; and k) Registration of CADTs. The NCIP shall register issued certificates of ancestral domain titles and certificates of ancestral lands titles before the Register of Deeds in the place where the property is situated. SEC. 53. Identification, Delineation and Certification of Ancestral Lands; a) The allocation of lands within any ancestral domain to individual or indigenous corporate (family or clan) claimants shall be left to the ICCs/IPs concerned to decide in accordance with customs and traditions; b) Individual and indigenous corporate claimants of ancestral lands which are not within ancestral domains, may have their claims officially established by filing applications for the identification and delineation of their claims with the Ancestral Domains Office. An individual or recognized head of a family or clan may file such application in his behalf or in behalf of his family or clan, respectively; c) Proofs of such claims shall accompany the application form which shall include the testimony under oath of elders of the community and other documents directly or indirectly attesting to the possession or occupation of the areas since time immemorial by the individual or corporate claimants in the concept of owners which shall be any of the authentic documents enumerated under Sec. 52(d) of this Act, including tax declarations and proofs of payment of taxes; d) The Ancestral Domains Office may require from each ancestral claimant the submission of such other documents, Sworn Statements and the like, which in its opinion, may shed light on the veracity of the contents of the application/claim; e) Upon receipt of the applications for delineation and recognition of ancestral land claims, the Ancestral Domains Office shall cause the publication of the application and a copy of each document submitted including a translation in the native language of the ICCs/IPs concerned in a prominent place therein for at least fifteen (15) days. A copy of the document shall also be posted at the local, provincial, and regional offices of the NCIP and shall be published in a newspaper of general circulation once a week for two (2) consecutive weeks to allow other claimants to file opposition thereto within fifteen (15) days from the date of such publication: Provided, That in area where no such newspaper exists, broadcasting in a radio station will be a valid substitute: Provided, further, That mere posting shall be deemed sufficient if both newspapers and radio station are not available; f) Fifteen (15) days after such publication, the Ancestral Domains Office shall investigate and inspect each application, and if found to be meritorious, shall cause a parcellary survey of the area being claimed. The Ancestral Domains Office shall reject any claim that is deemed patently false or fraudulent after inspection and verification. In case of rejection, the Ancestral Domains Office shall give the applicant due notice, copy furnished all concerned, containing the grounds for denial. The denial shall be appealable to the NCIP. In case of conflicting claims among individual or indigenous corporate claimants, the Ancestral Domains Office shall cause the contending parties to meet and assist them in coming up with a preliminary resolution of the conflict, without prejudice to its full adjudication according to Sec. 62 of this Act. In all proceedings for the identification or delineation of the ancestral domains as herein provided, the Director of Lands shall represent the interest of the Republic of the Philippines; and g) The Ancestral Domains Office shall prepare and submit a report on each and every application surveyed and delineated to the NCIP which shall, in turn, evaluate the report submitted. If the NCIP

[35]

[36]

[37] [38] [39]

[40]

the
[41] [42]

[43] [44] [45] [46] [47]

[48] [49]

finds such claim meritorious, it shall issue a certificate of ancestral land, declaring and certifying the claim of each individual or corporate (family or clan) claimant over ancestral lands. NCIP ADMINISTRATIVE ORDER NO. 01-98. RULES AND REGULATIONS IMPLEMENTING REPUBLIC ACT NO. 8371. RULE VIII, Delineation and Recognition of Ancestral Domains, PART I, Delineation and Recognition of Ancestral Domains/Lands: SECTION 1. Principle of Self Delineation. Ancestral domains shall be identified and delineated by the ICCs/IPs themselves through their respective Council of Elders/Leaders whose members are identified by them through customary processes. The metes and bounds of ancestral domains shall be established through traditionally recognized physical landmarks, such as, but not limited to, burial grounds, mountains, ridges, hills, rivers, creeks, stone formations and the like. Political or administrative boundaries, existing land uses, leases, programs and projects or presence of non-ICCs in the area shall not limit the extent of an ancestral domain nor shall these be used to reduce its area. xxxx SECTION 2. Procedure on Ancestral Domain Delineation. The Ancestral Domains Office (ADO) shall be responsible for the official delineation of ancestral domains and lands. For this purpose the ADO, at its option and as far as practicable, may create mechanisms to facilitate the delineation process, such as the organization of teams of facilitators which may include, among others, an NGO representative chosen by the community, the Municipal Planning and Development Officer of the local government units where the domain or portions thereof is located, and representatives from the IP community whose domains are to be delineated. The ADO will ensure that the mechanisms created are adequately supported financially and expedient delineation of the ancestral domains. Section 46(a), Republic Act No. 8371, provides that: The Ancestral Domains Office (ADO) shall be responsible for the official delineation of ancestral domains and lands. x x x Rollo, p. 81. Entitled, Maximo Lapid v. Court of Appeals, Annex H, rollo, p. 74. Suits to quiet title are characterized as proceedings quasi in rem. Technically they are neither in rem nor in personam. In an action quasi in rem, an individual is named as defendant. Mario Dapnisan, Rodolfo Lachica, Silvestre Lorenzo and Timoteo Dapnisan, who are among respondents in the petition herein, were also among the petitioners in G.R. No. 118515, rollo, p. 61. Portic v. Cristobal, G.R. No. 156171, 22 April 2005, 456 SCRA 577, 585. [A] decree of registration and the certificate of title issued pursuant thereto may be attacked on the ground of actual fraud within one (1) year from the date of its entry. Such an attack must be direct and not by a collateral proceeding (Section 48, Presidential Decree No. 1526; Legarda, v. Saleeby, 31 Phil. 590 (1915); Ybaez v. Intermediate Appellate Court, G.R. No. 68291, 6 March 1991, 194 SCRA 743, 749). The validity of the certificate of title in this regard can be threshed out only in an action expressly filed for the purpose. (Magay v. Estiandan, G.R. No. L-28975, 27 February 1976, 69 SCRA 48; Ybaez v. Intermediate Appellate Court, id.) Noblejas and Noblejas, Registration of Land Titles and Deeds (1992 Revised Ed.). Banco Espaol-Filipino v. Palanca, 37 Phil. 921 (1918). Abad v. Government of the Philippines, 103 Phil. 247, 251 (1958) Tichangco v. Enriquez, G.R. No. 150629, 30 June 2004, 433 SCRA 324, 337. Halili v. Court of Industrial Relations, 326 Phil. 982, 992 (1996); Hemedes v. Court of Appeals, 374 Phil. 692, 713 (1999); Cruz v. Court of Appeals, 346 Phil. 506, 512 (1997); Payongayong v. Court of Appeals, G.R. No. 144576, 28 May 2004, 430 SCRA 210; Baloloy v. Hular, G.R. No. 157767, 9 September 2004, 438 SCRA 80, 92; Pelayo v. Perez, G.R. No. 141323, 8 June 2005, 459 SCRA 475. Suntay v. Gocolay, G.R. No. 144892, 23 September 2005, 470 SCRA 627, 638. G.R. No. 144101, 16 September 2005, 470 SCRA 92, 97.

G.R. No. 149553. February 29, 2008.* NICOLAS LAYNESA and SANTOS LAYNESA, petitioners, vs. PAQUITO and PACITA UY, respondents. Administrative Law; Agrarian Reform Law; Department of Agrarian Reform Adjudication Board (DARAB); Jurisdictions; Despite the reclassification of an agricultural land by a local government unit under Sec. 20 of RA 7160, the Department of Agrarian Reform Adjudication Board (DARAB) still retains jurisdiction over a complaint filed by a tenant of the land in question for threatened ejectment and redemption.Despite the reclassification of an

agricultural land to non-agricultural land by a local government unit under Sec. 20 of RA 7160, the DARAB still retains jurisdiction over a complaint filed by a tenant of the land in question for threatened ejectment and redemption for the following reasons: (1) Jurisdiction is determined by the statute in force at the time of the commencement of the action. Likewise settled is the rule that jurisdiction over the subject matter is determined by the allegations of the complaint. DARAB Case No. V-RC-028 was filed by the tenants of an agricultural land for threatened ejectment and its redemption from respondents. It cannot be questioned that the averments of the DARAB case clearly pertain to an agrarian reform matter and involve the implementation of the agrarian reform laws. Such being the case, the complaint falls within the jurisdiction of the DARAB under Sec. 50 of RA 6657 on the quasi-judicial powers of the DAR. It bears stressing that the DAR has primary jurisdiction to determine and adjudicate agrarian reform matters and shall have exclusive original jurisdiction over all matters involving the implementation of the agrarian reform except those falling under the exclusive jurisdiction of the Department of Agriculture (DA) and the Department of Environment and Natural Resources (DENR). Primary jurisdiction means in case of seeming conflict between the jurisdictions of the DAR and regular courts, preference is vested with the DAR because of its expertise and experience in agrarian reform matters. Sec. 50 is also explicit that except for the DA and DENR, all agrarian reform matters are within the exclusive original jurisdiction of the DAR. Same; Same; Same; Same; Court rules that the Department of Agrarian Reform Adjudication Board (DARAB) retains jurisdiction over disputes arising from agrarian reform matters even though the landowner or respondent interposes the defense of reclassification of the subject lot from agricultural to non-agricultural use.We rule that the DARAB retains jurisdiction over disputes arising from agrarian reform matters even though the landowner or respondent interposes the defense of reclassification of the subject lot from agricultural to non-agricultural use. Damages; Court ruled that the exercise of ones rights does not make him liable for damages, thus One who exercises his rights does no injury.In Saba v. Court of Appeals, 189 SCRA 50 (1990), we ruled that the exercise of ones rights does not make him liable for damages, thus: One who exerc ises his rights does no injury. Qui jure suo utitur nullum damnum facit. If damage results from a persons exercising his legal rights, it is damnum absque injuria. Same; Exemplary Damages; Court ruled that exemplary damages may only be awarded if the act of the offender is attended by bad faith or done in wanton, fraudulent, or malevolent manner.In Government Service Insurance System v. Labung-Deang, 365 SCRA 341 (2001) and Premiere Development Bank v. Court of Appeals, 427 SCRA 686 (2004), this Court ruled that temperate damages will only be awarded by virtue of the wrongful act of a party. Whereas in Cathay Pacific Airways, Ltd. v. Vasquez, 399 SCRA 2007 (2003), we ruled that exemplary damages may only be awarded if the act of the offender is attended by bad faith or done in wanton, fraudulent, or malevolent manner. [Laynesa vs. Uy, 547 SCRA 200(2008)] DECISION VELASCO, JR., J.: In 1938, Robert Morley was the owner of a four (4)-hectare parcel of land in Barrio Tagbong, Pili, Camarines Sur. Petitioner Santos Laynesa was his tenant over two and a half (2 ) hectares of the land. In 1947, Morley sold the 4 has. to Sixto Cuba, Sr. He maintained Santos as the tenant over the 2 -hectare portion while instituting petitioner Nicolas Laynesa, son of Santos, as his tenant over the remainder of the property. On May 20, 1974, Original Certificate of Title No. 1660 on the property was issued to Cuba, Sr.[1] On October 25, 1979, Cuba, Sr. died intestate, survived by his children, Sixto Cuba, Jr., Carmelita Cuba Sunga, and Bienvenido Cuba. Santos and Nicolas continued as tenants, and delivered the owners share of the produce to Cuba, Jr. and Bienvenido.[2] On January 13, 1993, Cuba, Jr. executed a Deed of Absolute Sale of Unregistered Land, transferring the property to respondent Pacita Uy, married to respondent Paquito Uy, in consideration of PhP 80,000. Cuba, Jr. was named owner of the land. Notably, the Deed was not registered with the Register of Deeds. Later, Cuba, Jr. executed a Deed of Assignment or Transfer of Rights of the undelivered owners share of the produce in favor of Pacita. On July 13, 1993, Pacita demanded that the Laynesas vacate the land. She claimed that she had purchased the land. The Laynesas asked for proof of Pacitas acquisition, but she could not produce any.

Subsequently, Pacita returned and again demanded that the Laynesas vacate the property, this time exhibiting the Deed of Absolute Sale of Unregistrered Land signed by Cuba, Jr. Consequently, the Laynesas filed on October 13, 1993 a petition against Pacita with the Department of Agrarian Reform Adjudication Board (DARAB), docketed as DARAB Case No. 730 for Legal Redemption entitled Santos Laynesa, et al. v. Paquito Uy. The Laynesas primarily sought that they be allowed to redeem the land from Pacita.[3] Thereafter, on November 25, 1993, Pacita filed a complaint docketed as DARAB Case No. 745 entitled Pacita Uy v. Santos Laynesa, et al. for Collection of Rentals and Ejectment against the Laynesas with the DARAB. Cuba, Jr. died intestate on December 23, 1993.[4] On February 10, 1994, the Laynesas deposited PhP 80,000 in the form of a Cashiers Check with the Clerk of Court of the DARAB by way of consignation of the redemption price of the property. Meanwhile, the heirs of Bienvenido filed a petition with the Camarines Sur Regional Trial Court (RTC) for the judicial declaration of presumptive death of their father who had been missing since 1984.[5] Afterwards, on June 20, 1994, the heirs of Bienvenido, with Reynoso and Carmelita Sunga, filed a Complaint docketed as Civil Case No. P-1963 for Annulment of Sale of Real Estate against the spouses Uy with the Camarines Sur RTC. They prayed that the court declare the Deed of Absolute Sale of Unregistered Land executed by Cuba, Jr. in favor of the spouses Uy as null and void, and the property returned to Cuba, Sr.s intestate estate. The DARAB dismissed the complaint without prejudice to the two cases filed before it by the parties. [6] Subsequently, the parties in Civil Case No. P-1963 amicably settled their dispute. In a Compromise Agreement approved by the RTC, the parties agreed to divide the property into two portions. Two hectares of rice lands would be transferred to the spouses Uy, and the remaining portion to Cuba, Sr.s heirs. Thereafter, the Register of Deeds issued Transfer Certificate of Title (TCT) No. 23276 over a portion of the property with an area of 20,000 square meters in the names of the spouses Uy. Meanwhile, Pacita obtained a certification from the Municipal Agricultural Office (MAO) that the property was not prime agricultural property, and from the Municipal Agrarian Reform Office (MARO) that TCT No. 23276 was not covered by Operation Land Transfer (OLT) or by Presidential Decree No. (PD) 27. The certifications were sought so the land could be reclassified as industrial land. On May 29, 1995, the Municipal Council of Tagbong, Pili, Camarines Sur approved Resolution No. 67, which embodied Ordinance No. 28 and reclassified the land from agricultural to industrial. On July 17, 1995, the Laynesas filed a Complaint dated July 13, 1995, docketed as DARAB Case No. V-RC028 and entitled Nicolas Laynesa, et al. v. Paquito Uy, et al. for Threatened Ejectment and Redemption with a Prayer for the issuance of Writ of Preliminary Injunction with the DARAB. In the Complaint, the Laynesas sought to redeem the property covered by TCT No. 23276 for PhP 40,000. In their Answer dated August 15, 1995, the spouses Uy alleged that the Laynesas had no cause of action against them, and even assuming that the Laynesas had, the action was already barred by estoppel and laches, the complaint was already moot and academic, and the DARAB had no jurisdiction since the land had already been reclassified as industrial land. On January 12, 1996, DARAB Provincial Adjudicator Isabel E. Florin issued a Decision, the dispositive portion of which states: WHEREFORE, the foregoing considered, judgment is hereby rendered 1. Granting the petition for redemption by the plaintiffs herein of the two-hectare Riceland now titled in the name of Pacita E. Uy with TCT No. T-23276, for Nicolas Laynesa, his .5 hectare tillage and for Santos Laynesa, his 1.5 hectares tillage in the consolidated amount of P60,000.00; 2. Ordering the conveyance of subject lots to herein plaintiffs as above-stated;

3. Ordering defendants to pay plaintiffs temperate damages of P15,000.00; exemplary damages of P20,000.00; Attorneys fees of P12,000.00; and appearance fees of P2,400.00. 4. Declaring the injunction permanent, unless the appropriate Order allowing conversion is thereby presented. SO ORDERED.[7] Thereafter, the spouses Uy filed a Motion for Reconsideration. In an Order dated February 27, 1996,[8] the DARAB affirmed the Decision of the adjudicator, but with the modification to set aside the award of damages. The spouses Uy appealed to the Court of Appeals (CA). The CA ruled DARAB without jurisdiction On May 16, 2001, the CA issued a Decision in CA-G.R. SP No. 59454, reversing the Decision of the DARAB. The dispositive portion of the CA Decision reads: IN THE LIGHT OF ALL THE FOREGOING, the Decision of the DARAB, Annex A of the Petition and its Resolution, Annex B of the Petition are set aside and reversed. The Complaint of the Respondents and the counterclaims of the Petitioners are DISMISSED. SO ORDERED.[9] According to the CA, the evidence on record shows that when the Laynesas filed their action with the DARAB, the property was no longer agricultural but had been reclassified. Thus, the DARAB had no jurisdiction. Hence, we have this Petition for Review on Certiorari under Rule 45. The Issues [T]he Honorable Court of Appeals (Fourteenth Division), seriously erred and/or committed grave error in: A. Holding that at the time of the filing of the Complaint (V-RC-028-CS-Branch 1) the land subject matter of the case ceases to be agricultural by virtue of the reclassification made by Municipal Ordinance No. 28 of Pili, Camarines Sur, so that the DARAB has no jurisdiction over the dispute involving said land and that the Decision of the DARAB is null and void. Holding that the reclassification alone of an agricultural land by a Municipal Ordinance from agricultural to any other uses without the necessary conversion Order from the DAR is enough to divest the DAR of jurisdiction to hear and determine any agrarian disputes involving the land.[10]

posit that after the issuance of Municipal Council Resolution No. 67, reclassifying the land on May 29, 1995, the land ceased to be agricultural and is therefore beyond the jurisdiction of the DARAB.

Previously, under Republic Act No. (RA) 3844, all agrarian disputes fell within the exclusive jurisdiction of the Court of Agrarian Relations. Later, the jurisdiction over such disputes went to the RTCs.[11] When RA 6657, otherwise known as the Comprehensive Agrarian Reform Law, took effect on June 15, 1988, the adjudication of agrarian reform disputes was placed under the jurisdiction of the DAR, thus: Section 50. Quasi-Judicial Powers of the DAR.The DAR is hereby vested with primary jurisdiction to determine and adjudicate agrarian reform matters and shall have exclusive original jurisdiction over all matters involving the implementation of agrarian reform, except those falling under the exclusive jurisdiction of the Department of Agriculture (DA) and the Department of Environment and Natural Resources (DENR). xxxx Notwithstanding an appeal to the Court of Appeals, the decision of the DAR shall be immediately executory. However, Section 56 of RA 6657 vested original and exclusive jurisdiction over controversies involving the determination of just compensation and prosecution of all criminal offenses arising from violations of RA 6657 to RTCs designated as Special Agrarian Courts. From the cited legal provisions, it cannot be disputed that the DAR, through the DARAB, shall exercise quasijudicial functions and has exclusive original jurisdiction over all disputes involving the enforcement and implementation of all agrarian reform laws. Sec. 4 of RA 6657 tells us which lands are covered by the Comprehensive Agrarian Reform Program, thus: Section 4. Scope.The Comprehensive Agrarian Reform Law of 1988 shall cover; regardless of tenurial arrangement and commodity produced, all public and private agricultural lands as provided in Proclamation No. 131 and Executive Order No. 229, including other lands of the public domain suitable for agriculture. (Emphasis supplied.) However, in 1991, RA 7160 or the Local Government Code was passed into law, granting local government units the power to reclassify land. Being a later law, RA 7160 shall govern in case of conflict between it and RA 6657, as to the issue of reclassification. Title I, Chapter 2, Sec. 20 of RA 7160 states: SEC. 20. Reclassification of Lands.(a) A city or municipality may, through an ordinance passed by the sanggunian after conducting public hearings for the purpose, authorize the reclassification of agricultural lands and provide for the manner of their utilization or disposition in the following cases: (1) when the land ceases to be economically feasible and sound for agricultural purposes as determined by the Department of Agriculture or (2) where the land shall have substantially greater economic value for residential, commercial, or industrial purposes, as determined by the sanggunian concerned: Provided, That such reclassification shall be limited to the following percentage of the total agricultural land area at the time of the passage of the ordinance: (1) For highly urbanized and independent component cities, fifteen percent (15%); (2) For component cities and first to third class municipalities, ten percent (10%); and (3) For fourth to sixth class municipalities, five percent (5%): Provided, further, That agricultural lands distributed to agrarian reform beneficiaries pursuant to [RA 6657], otherwise known as The Comprehensive Agrarian Reform Law, shall not be affected by the said

B.

The pivotal issue in this case is whether the reclassification of a lot by a municipal ordinance, without the Department of Agrarian Reforms (DARs) approval, suffices to oust the jurisdiction of the DARAB over a petition for legal redemption filed by the tenants. There are strict requirements for the valid reclassification of land by a local government unit The resolution of this case is not that simple. There is no question that petitioners-Laynesas are the tenants of the previous owner of the land. As such, disputes pertaining to the land tenancy were within the jurisdiction of the DAR. However, respondents-spouses Uy

reclassification and the conversion of such lands into other purposes shall be governed by Section 65 of said Act. (b) The President may, when public interest so requires and upon recommendation of the National Economic and Development Authority, authorize a city or municipality to reclassify lands in excess of the limits set in the next preceding paragraph. (c) The local government units shall, in conformity with existing laws, continue to prepare their respective comprehensive land use plans enacted through zoning ordinances which shall be the primary and dominant bases for the future use of land resources: Provided, That the requirements for food production, human settlements, and industrial expansion shall be taken into consideration in the preparation of such plans. (d) Where approval by a national agency is required for reclassification, such approval shall not be unreasonably withheld. Failure to act on a proper and complete application for reclassification within three (3) months from receipt of the same shall be deemed as approval thereof. (e) Nothing in this Section shall be construed as repealing, amending, or modifying in any manner the provisions of [RA] 6657. Pursuant to RA 7160, then President Fidel Ramos issued Memorandum Circular No. (MC) 54 on June 8, 1993, providing the guidelines in the implementation of the above Sec. 20 of the Local Government Code, as follows: SECTION 1. Scope and Limitations.(a) Cities and municipalities with comprehensive land use plans reviewed and approved in accordance with EO 72 (1993), may authorize the reclassification of agricultural lands into non-agricultural uses and provide for the manner of their utilization or disposition, subject to the limitations and other conditions prescribed in this Order. (b) Agricultural lands may be reclassified in the following cases: (1) when the land ceases to be economically feasible and sound for agricultural purposes as determined by the Department of Agriculture (DA), in accordance with the standards and guidelines prescribed for the purpose; or (2) where the land shall have substantially greater economic value for residential, commercial, or industrial purposes as determined by the sanggunian concerned, the city/municipality concerned should notify the DA, HLRB, DTI, DOT and other concerned agencies on the proposed reclassification of agricultural lands furnishing them copies of the report of the local development council including the draft ordinance on the matter for their comments, proposals and recommendations within seven (7) days upon receipt. (c) However, such reclassification shall be limited to a maximum of the percentage of the total agricultural land of a city or municipality at the time of the passage of the ordinance as follows: (1) For highly urbanized and independent component cities, fifteen percent (15%); (2) For component cities and first to third class municipalities, ten percent (10%); and (3) For fourth to sixth class municipalities, five percent (5%). (d) In addition, the following types of agricultural lands shall not be covered by the said reclassification:

(1) Agricultural lands distributed to agrarian reform beneficiaries subject to Section 65 of RA 6557; (2) Agricultural lands already issued a notice of coverage or voluntarily offered for coverage under CARP. (3) Agricultural lands identified under AO 20, s. of 1992, as non-negotiable for conversion as follows: (i) All irrigated lands where water is available to support rice and other crop production; (ii) All irrigated lands where water is not available for rice and other crop production but within areas programmed for irrigation facility rehabilitation by DA and National Irrigation Administration (NIA); and (iii) All irrigable lands already covered by irrigation projects with form funding commitments at the time of the application for land conversion or reclassification. (e) The President may, when public interest so requires and upon recommendation of the National Economic Development Authority (NEDA), authorize a city or municipality to reclassify lands in excess of the limits set in paragraph (d) hereof. For this purpose, NEDA is hereby directed to issue the implementing guidelines governing the authority of cities and municipalities to reclassify lands in excess of the limits prescribed herein. SECTION 2. Requirements and Procedures for Reclassification.(a) The city or municipal development council (CDC/MDC) shall recommend to the sangguniang panlungsod or sangguniang bayan, as the case may be, the reclassification of agricultural lands within its jurisdiction based on the requirements of local development. (b) Prior to the enactment of an ordinance reclassifying agricultural lands as provided under Sec. 1 hereof, the sanggunian concerned must first secure the following certificates [from] the concerned national government agencies (NGAs): (1) A certification from DA indicating (i) the total area of existing agricultural lands in the LGU concerned; (ii) that which lands are not classified as non-negotiable for conversion or reclassification under AO 20 (1992); and (iii) that the land ceases to be economically feasible and sound for agricultural purposes in the case of Sec. 1 (b-1). (2) A certification from DAR indicating that such lands are not distributed or not covered by a notice of coverage or not voluntarily offered for coverage under CARP. (c) The HLRB shall serve as the coordinating agency for the issuance of the certificates as required under the preceding paragraph. All applications for reclassification shall, therefore, be submitted by the concerned LGUs to the HLRB, upon receipt of such application, the HLRB shall conduct initial review to determine if: (1) the city or municipality concerned has an existing comprehensive land use plan reviewed and approved in accordance with EO 72 (1993); and (2) the proposed reclassification complies with the limitations prescribed in SECTION 1 (d) hereof.

Upon determination that the above conditions have been satisfied, the HLRB shall then consult with the concerned agencies on the required certifications. The HLRB shall inform the concerned agencies, city or municipality of the result of their review and consultation. If the land being reclassified is in excess of the limit, the application shall be submitted to NEDA. Failure of the HLRB and the NGAs to act on a proper and complete application within three months from receipt of the same shall be deemed as approved thereof. (d) Reclassification of agricultural lands may be authorized through an ordinance enacted by the sangguniang panlungsod or sangguniang bayan, as the case may be, after conducting public hearings for the purpose. Such ordinance shall be enacted and approved in accordance with Articles 107 and 108 of the IRR of the LGC. (e) Provisions of Sec. 1 (b-2) hereof to the contrary notwithstanding, the sanggunian concerned shall seek the advice of DA prior to the enactment of an ordinance reclassifying agricultural lands. If the DA has failed to act on such request within thirty (30) days from receipt thereof, the same shall be deemed to have been complied with. Should the land subject to reclassification is found to be still economically feasible for agriculture, the DA shall recommend to the LGU concerned alternative areas for development purposes. (f) Upon issuance of the certifications enumerated in Section 2 (b) hereof, the sanggunian concerned may now enact an ordinance authorizing the reclassification of agricultural lands and providing for the manner of their utilization or disposition. Such ordinance shall likewise update the comprehensive land use plans of the LGU concerned. (Emphasis supplied.) It is because of the authority granted to a city or municipality by Sec. 20 of RA 7160 coupled with the implementing guidelines laid down in MC 54 dated June 8, 1993 that the CA was convinced to rule that the disputed lot is no longer agricultural but industrial land and, hence, the DARAB does not have or has lost jurisdiction over the subject matter of DARAB Case No. V-RC-028. This position is incorrect. Despite the reclassification of an agricultural land to non-agricultural land by a local government unit under Sec. 20 of RA 7160, the DARAB still retains jurisdiction over a complaint filed by a tenant of the land in question for threatened ejectment and redemption for the following reasons: (1) Jurisdiction is determined by the statute in force at the time of the commencement of the action.[12] Likewise settled is the rule that jurisdiction over the subject matter is determined by the allegations of the complaint.[13] DARAB Case No. V-RC-028 was filed by the tenants of an agricultural land for threatened ejectment and its redemption from respondents. It cannot be questioned that the averments of the DARAB case clearly pertain to an agrarian reform matter and involve the implementation of the agrarian reform laws. Such being the case, the complaint falls within the jurisdiction of the DARAB under Sec. 50 of RA 6657 on the quasi-judicial powers of the DAR. It bears stressing that the DAR has primary jurisdiction to determine and adjudicate agrarian reform matters and shall have exclusive original jurisdiction over all matters involving the implementation of the agrarian reform except those falling under the exclusive jurisdiction of the Department of Agriculture (DA) and the Department of Environment and Natural Resources (DENR). Primary jurisdiction means in case of seeming conflict between the jurisdictions of the DAR and regular courts, preference is vested with the DAR because of its expertise and experience in agrarian reform matters. Sec. 50 is also explicit that except for the DA and DENR, all agrarian reform matters are within the exclusive original jurisdiction of the DAR. (2) Sec. 20(e) of RA 7160 is unequivocal that nothing in said section shall be construed as repealing, amending or modifying in any manner the provisions of [RA] 6657. As such, Sec. 50 of RA 6657 on quasi-judicial powers of the DAR has not been repealed by RA 7160. In view of the foregoing reasons, we rule that the DARAB retains jurisdiction over disputes arising from agrarian reform matters even though the landowner or respondent interposes the defense of reclassification of the subject lot from agricultural to non-agricultural use.

On the issue of whether there has been a valid reclassification of the subject lot to industrial land, we rule that respondents failed to adduce substantial evidence to buttress their assertion that all the conditions and requirements set by RA 7160 and MC 54 have been satisfied. Respondent Pacita only procured a MAO certification that the property was not prime agricultural property. The MARO certified that the land was not covered by the OLT under PD 27. These two certifications will not suffice for the following reasons: (1) Sec. 20 of RA 7160 requires submission of the recommendation or certification from the DA that the land ceases to be economically feasible or sound for agricultural purposes. In this case, the MAO certification attests only that the lot is no longer prime agricultural property. (2) Sec. 20 requires a certification from the DAR that the land has not yet been distributed to beneficiaries under RA 6657 which took effect on June 15, 1988 nor covered by a notice of coverage. In the case at bar, the MARO certification which pertains only to PD 27 does not suffice. (3) Respondents have not shown any compliance with Sec. 2 of MC 54 on the additional requirements and procedures for reclassification such as the Housing and Land Use Regulatory Boards report and recommendation, the requisite public hearings, and the DAs report and recommendation. Based on the foregoing reasons, respondents have failed to satisfy the requirements prescribed in Sec. 20 of RA 7160 and MC 54 and, hence, relief must be granted to petitioners. Landowners must understand that while RA 7160, the Local Government Code, granted local government units the power to reclassify agricultural land, the stringent requirements set forth in Sec. 30 of said Code must be strictly complied with. Such adherence to the legal prescriptions is found wanting in the case at bar. Be that as it may, the DARAB erred in awarding damages to petitioners. In Saba v. Court of Appeals, we ruled that the exercise of ones rights does not make him liable for damages, thus: One who exercises his rights does no injury. Qui jure suo utitur nullum damnum facit. If damage results from a persons exercising his legal rights, it is damnum absque injuria.[14] This principle was further explained by this Court in the case of Custodio v. Court of Appeals, to wit: However, the mere fact that the plaintiff suffered losses does not give rise to a right to recover damages. To warrant the recovery of damages, there must be both a right of action for a legal wrong inflicted by the defendant, and damage resulting to the plaintiff therefrom. Wrong without damage, or damage without wrong, does not constitute a cause of action, since damages are merely part of the remedy allowed for the injury caused by a breach or wrong. There is a material distinction between damages and injury. Injury is the illegal invasion of a legal right; damage is the loss, hurt, or harm which results from the injury; and damages are the recompense or compensation awarded for the damage suffered. Thus, there can be damage without injury in those instances in which the loss or harm was not the result of a violation of a legal duty. These situations are often called damnum absque injuria. In order that a plaintiff may maintain an action for the injuries of which he complains, he must establish that such injuries resulted from a breach of duty which the defendant owed to the plaintiff - a concurrence of injury to the plaintiff and legal responsibility by the person causing it. The underlying basis for the award of tort damages is the premise that an individual was injured in contemplation of law. Thus, there must first be the breach of some duty and the imposition of liability for that breach before damages may be awarded; it is not sufficient to state that there should be tort liability merely because the plaintiff suffered some pain and suffering. Many accidents occur and many injuries are inflicted by acts or omissions which cause damage or loss to another but which violate no legal duty to such other person, and consequently create no cause of action in his favor. In such cases, the consequences must be

borne by the injured person alone. The law affords no remedy for damages resulting from an act which does not amount to a legal injury or wrong. In other words, in order that the law will give redress for an act causing damage, that act must be not only hurtful, but wrongful. There must be damnum et injuria. If, as may happen in many cases, a person sustains actual damage, that is, harm or loss to his person or property, without sustaining any legal injury, that is, an act or omission which the law does not deem an injury, the damage is regarded as damnum absque injuria.[15] Thus, in Government Service Insurance System v. Labung-Deang[16] and Premiere Development Bank v. Court of Appeals,[17] this Court ruled that temperate damages will only be awarded by virtue of the wrongful act of a party. Whereas in Cathay Pacific Airways, Ltd. v. Vasquez, we ruled that exemplary damages may only be awarded if the act of the offender is attended by bad faith or done in wanton, fraudulent, or malevolent manner. [18] In the instant case, the RTC awarded damages to petitioners on the ground that respondents dumped earthfill materials during the pendency of the case. It must be pointed out that the RTC did not issue a preliminary injunction or temporary restraining order (TRO) against respondents.

Id. at 88-89. Id. [5] Id. at 90. [6] Id. at 90-91. [7] Id. at 65-66. [8] Id. at 67-69. [9] Id. at 87-103. Penned by Associate Justice Romeo J. Callejo, Sr. (Chairperson, now a retired member of this Court) and concurred in by Associate Justices Renato C. Dacudao and Perlita Tria-Tirona. [10] Id. at 9. [11] R.P. Barte, LAW ON AGRARIAN REFORM 24. [12] Lee v. Presiding Judge, MTC of Legaspi City, Br. I, No. L-68789, November 10, 1986, 145 SCRA 408, 415. [13] Ganadin v. Ramos, No. L-23547, September 11, 1980, 99 SCRA 613, 621. [14] G.R. No. 77950, August 24, 1990, 189 SCRA 50, 55; citations omitted. [15] G.R. No. 116100, February 9, 1996, 253 SCRA 483, 489-491. [16] G.R. No. 135644, September 17, 2001, 365 SCRA 341, 350. [17] G.R. No. 159352, April 14, 2004, 427 SCRA 686, 700. [18] G.R. No. 150843, March 14, 2003, 399 SCRA 207, 223. [19] RULES OF COURT, Rule 131, Sec. 3(m).
[4]

[3]

Contrary to this finding of the trial court, respondents did not act in bad faith or in a wanton, fraudulent, or malevolent manner; consequently, petitioners are not entitled to an award for damages. Respondents dumping of earth filling materials on the subject land was but a lawful exercise of their rights as owners of the land. It must be remembered that respondents attempted to have the land reclassified through the Municipal Government of San Juan, Pili, Camarines Sur by virtue of Municipal Council Resolution No. 67 which embodied Ordinance No. 28. Given the disputable presumption that official duty was regularly performed, [19] respondents were justified to presume that the reclassification of the land was lawful. It was also natural for respondents to conclude that such reclassification resulted in the dispossession of petitioners as tenants, there being no tenants of industrial land. Thus, respondents, at the time, could lawfully exercise their proprietary rights over the land, including the dumping of earth filling materials thereon. Moreover, the pendency of the case before the RTC, absent a preliminary injunction or TRO against respondents, would not preclude respondents from exercising their rights. Although this reclassification has now been declared to be ineffectual, for failing to comply with the provisions of RA 7160, respondents cannot be made liable for damages. Respondents exercise of acts of ownership over the land, at a time that the reclassification had not yet been declared as invalid and ineffectual, is a lawful exercise of their rights. And even though this may have prejudiced or injured petitioners, respondents cannot be made liable for it. As stated, respondents cannot be penalized for a lawful act. Similarly, the instant case does not fall under any of the grounds set forth in Article 2208 of the Civil Code to justify the award for attorneys fees and expenses of litigation. Thus, there are also no grounds for the DARABs grant of attorneys fees and appearance fees in favor of petitioners. Therefore, the RTCs award for exemplary and temperate damages, as well as attorneys and appearance fees, must be deleted. WHEREFORE, the petition is GRANTED. The May 16, 2001 CA Decision in CA-G.R. SP No. 59454 is REVERSED and SET ASIDE. The February 27, 1996 DARAB Order and January 12, 1996 Decision of DARAB Provincial Adjudicator Florin in DARAB Case No. V-RC-028 are AFFIRMED with theMODIFICATION that the award for temperate and exemplary damages and attorneys and appearance fees is DELETED. No costs. SO ORDERED.
* **

G.R. No. 174966. February 14, 2008.* DEVELOPMENT BANK OF THE PHILIPPINES, petitioner, vs. ROMEO TESTON, represented by his Attorney-inFact, CONRADO O. COLLARINA, respondent. Judgments; Due Process; It is elementary that a judgment must conform to, and be supported by, both the pleadings and the evidence, and must be in accordance with the theory of the action on which the pleadings are framed and the case was triedit is improper to enter an order which exceeds the scope of relief sought by the pleadings, absent notice which affords the opposing party an opportunity to be heard with respect to the proposed relief.The Court of Appeals erred in ordering DBP to return to respondent the P1,000,000.00 alleged down payment, a matter not raised in respondents Petition for Review before it. In Jose Clavano, Inc. v. Housi ng and Land Use Regulatory Board, 378 SCRA 172 (2002), this Court held: x x x It is elementary that a judgment must conform to, and be supported by, both the pleadings and the evidence, and must be in accordance with the theory of the action on which the pleadings are framed and the case was tried. The judgment must be secudum allegata et probata. (Italics in original) Due process considerations justify this requirement. It is improper to enter an order which exceeds the scope of relief sought by the pleadings, absent notice which affords the opposing party an opportunity to be heard with respect to the proposed relief. The fundamental purpose of the requirement that allegations of a complaint must provide the measure of recovery is to prevent surprise to the defendant. Same; Same; The essence of due process is to be found in the reasonable opportunity to be heard and submit any evidence one may have in support of ones defense.That rescission of a sale creates the obligation to return the things which were the object of the contract, together with their fruits, and the price with its interests is undisputed. However, to require DBP to return the alleged P1,000,000 without first giving it an opportunity to present evidence would violate the Constitutional provision that [n]o person shall be deprived of life, liberty, or property without due process of law x x x. The essence of due process is to be found in the reasonable opportunity to be heard and submit any evidence one may have in support of ones defense. [Development Bank of the Philippines vs. Teston, 545 SCRA 422(2008)]

G.R. No. 174966

February 14, 2008

DEVELOPMENT BANK OF THE PHILIPPINES, petitioner, vs. ROMEO TESTON, represented by his Attorney-in- Fact, CONRADO O. COLLARINA, respondent. DECISION CARPIO MORALES, J.:

On official leave. Additional member as per Special Order No. 485 dated February 14, 2008. Rollo, p. 87. [2] Id. at 88.
[1]

By a Deed of Conditional Sale dated June 15, 1987, Romeo Teston (respondent) purchased on installment basis from petitioner, Development Bank of the Philippines (DBP), two (2) parcels of land situated in Mandaon, Masbate, covered by Transfer Certificate of Title Nos. T-6176 and T-6177. Respondent defaulted in the payment of his amortizations which had amounted to P3,727,435.57 as of September 1990. The DBP thus rescinded their contract by letter dated September 24, 1990 addressed to respondent. DBP soon transferred the two (2) parcels of land to the government in compliance with Republic Act No. 6657 (COMPREHENSIVE AGRARIAN REFORM LAW OF 1988) and Executive Order 407 dated June 14, 1990 (ACCELERATING THE ACQUISITION AND DISTRIBUTION OF AGRICULTURAL LANDS, PASTURE LANDS, FISHPONDS, AGRO-FORESTRY LANDS AND OTHER LANDS OF THE PUBLIC DOMAIN SUITABLE FOR AGRICULTURE).1 It turned out that on December 1, 1988, respondent had voluntarily offered the two parcels of land for inclusion in the Comprehensive Agrarian Reform Program (CARP). On September 18, 1995, respondent filed before the Department of Agrarian Reform Adjudication Board (DARAB) Regional Office in Legazpi City a Petition2 against DBP and the Land Bank of the Philippines (Land Bank), alleging that under Republic Act No. 6657, his obligation to DBP was assumed by the government through the Land Bank after the two parcels of land became covered by the CARP, and that the operation of said law extinguished DBP's right to rescind the sale. Respondent thus prayed that judgment be rendered: 1. Declaring that the right of the respondent DBP to rescind the Deed of Conditional Sale for non-payment of amortization was extinguished by operation of law; 2. That the Land Bank be ordered to pay the just compensation of the property which the Special Agrarian Court may determine to be paid to the petitioner after deducting the balance of the petitioner to the DBP. 3 In its Answer/Position Paper,4 DBP alleged that, among other things, since respondent had not acquired title to the two parcels of land, he had no right to voluntarily offer them to the CARP. The Land Bank raised substantially the same defenses as those raised by DBP.5 By Order of March 30, 1998, the DARAB Regional Adjudicator dismissed respondent's petition in this wise: Petitioner has never been the owner of the land, hence could not have validly offered the property under the [Voluntary Offer to Sell] scheme. Under Section 72 of Republic Act No. 6657, " Other claims" can not refer to payment of amortizations, more specifically if such claim is made after the rescission of the contract. Petitioner may well have questioned the rescission of the contract in 1990 if he felt aggrieved by it and should not have allowed five (5) years to elapse before acting on the same. This creates the presumption that the rescission was reasonable and valid and the non-impairment of contracts must be respected. As against Land Bank, petitioner has no right of action whatsoever, as there is nothing Land Bank could act on to favor their petition. In fine, DBP being still the owner, the government cannot step in and assume the obligation to pay petitioner's amortization after his default to make him the owner of the land and to bar DBP from rescinding the conditional sale. x x x6 (Italics in the original; underscoring supplied)

On appeal, the DARAB affirmed the Regional Adjudicator's decision, thus: There is no doubt that the title to the subject property has not been transferred to petitioner-appellant. The contract which he entered into with the DBP is a conditional sale, the transfer of property being conditioned upon compliance with the terms of the sale, specifically the payment in full of the purchase price. As petitioner-appellant failed to fulfill his obligation, DBP rescinded the conditional Sale. Thus, petitionerappellant has lost whatever right he may have over the property pursuant to the contract. It is clear on the records that the Deed of Conditional Sale dated July 15, 1987 was rescinded on September 24, 1990 or long before the property was turned over to the DAR on November 29, 1990. Evidently, petitionerappellant had long lost his interest over the property in question when the same was turned over to the national government. Hence, petitioner-appellant could not have validly offered the property under the Voluntary Offer to Sell (VOS) scheme. Moreover, the assertion of appellant that Section 72 of RA No. 6657 "extinguishes his obligation to pay full amount to the DBP because it is already assumed by DAR or LBP is misplaced. Section 72 provides: "Section 72 Lease, Management, Grower or Service Contract, Mortgages and Other Claims" xxxx (b) Mortgages and other claims registered with the [Register] of Deeds shall be assumed by the government to an amount equivalent to the landowner's compensation value as provided in this Act" (Underscoring supplied.) Surely, the other claims alluded to by law refer to payment of amortizations under a contract of sale which have not been extinguished by rescission. The government cannot assume an obligation which does not exist. Lastly, this Board has jurisdiction over agricultural landholdings covered by CARP in respect to the preliminary determination and payment of just compensation. (Sec. 1(b) of RULE II, DARAB New Rules of Procedure). However, as elucidated above, since petitioner-appellee is not the owner of the disputed landholdings, [h]e has no cause of action against respondents-appellees. WHEREFORE, the Decision of the Adjudicator a quo dated March 30, 1998 is AFFIRMED in toto.7(Emphasis in the original; underscoring supplied) Respondent assailed the DARAB decision via Petition for Review8 before the Court of Appeals. By Decision9 of January 11, 2006, the appellate court modified the trial court's decision by ordering DBP to return to respondent "theP1,000,000 which [respondent] paid as downpayment," following the law on rescission. We cannot write finis in this case without ordering respondent DBP to return the payment made by herein petitioner in view of the rescission of the subject Deed of Conditional Sale. Under Article 1385 of the Civil Code, "rescission creates the obligation to return the things which were the object of the contract, together with their fruits, and the price with its interests x x x." Hence, equity demands that the amount paid by the petitioner be returned to him. WHEREFORE, the assailed Decision dated February 23, 2004 is MODIFIED. With DBP's rescission of the contract it executed with petitioner, DBP is consequently directed to return petitioner the P1,000,000.00 which the latter paid as down payment for the intended purchase of the subject parcels of land, plus 12% annual interest thereon. The decision stands in all other respects. 10 (Italics and underscoring in the original.)

By a Partial Motion for Reconsideration,11 DBP questioned the order to return the P1,000,000 which respondent had allegedly given as down payment. Respondent, upon the other hand, filed a "Motion to Fix Date When [the P1,000,000 Would] Earn Interest."12 The Court of Appeals denied DBP's Motion for Partial Reconsideration. It granted respondent's motion and accordingly held that interest on the P1,000,000 would accrue upon the finality of the judgment until full payment. 13 Hence, DBP's present Petition for Review on Certiorari14 faulting the appellate court to have erred I. . . . WHEN IT ORDERED DBP TO RETURN THE ALLEGED DOWNPAYMENT MADE BY PETITIONER IN THE ALLEGED AMOUNT OF P1,000,000.00 AS THIS WAS NEITHER RAISED AS AN ISSUE IN THE TRIAL COURT NOR IN PRIVATE RESPONDENT'S AMENDED PETITION FOR REVIEW IN THE COURT OF APPEALS. IT WAS NOT EVEN ALLEGED AS ONE OF PRIVATE RESPONDENT'S "ASSIGNED ERRORS." II. . . . IN ORDERING THE REFUND OF P1,000,000.00 BASED MERELY ON DOCUMENTS SUBMITTED IN THE APPELLATE COURT BUT WERE NOT PROPERLY PRESENTED AND OFFERED AS EVIDENCE IN THE DARAB PROCEEDINGS. HENCE, THERE IS CERTAINLY NO BASIS FOR THE COURT TO ORDER DBP TO RETURN THE AMOUNT OF P1,000,000.00 TO PRIVATE RESPONDENT. III. GRANTING ARGUENDO THAT THE ISSUE ON DEPOSIT MAY PROPERLY BE CONSIDERED, [IN] FAIL[ING] TO CONSIDER THAT UNDER THE LAW BETWEEN THE PARTIES, PETITIONER DBP IS UNDER NO OBLIGATION TO RETURN THE ALLEGED DEPOSIT OF P1,000,000.00 WHICH PRIVATE RESPONDENT ALLEGEDLY PAID AS DOWNPAYMENT, BECAUSE THE DEED OF CONDITIONAL SALE DATED JULY 15, 1987 EXPRESSLY PROVIDES THAT IN CASE OF RESCISSION OF CONTRACT, ALL SUMS OF MONEY UNDER THE CONTRACT (INCLUDING DEPOSIT) SHALL BE CONSIDERED AND TREATED AS RENTALS FOR THE USE OF THE PROPERTY, [AND] PROFFERING THAT . . . UNDER THE SAME DEED, THE PRIVATE RESPONDENT IS DEEMED TO HAVE WAIVED ALL RIGHT/S TO ASK OR DEMAND RETURN OF THE SAID DEPOSIT. 15 (Emphasis in the original) The petition is meritorious. The Court of Appeals erred in ordering DBP to return to respondent "the P1,000,000.00" alleged down payment, a matter not raised in respondent's Petition for Review before it. In Jose Clavano, Inc. v. Housing and Land Use Regulatory Board,16 this Court held: x x x It is elementary that a judgment must conform to, and be supported by, both the pleadings and the evidence, and must be in accordance with the theory of the action on which the pleadings are framed and the case was tried. The judgment must be secudum allegata et probata.17 (Italics in original) Due process considerations justify this requirement. It is improper to enter an order which exceeds the scope of relief sought by the pleadings, absent notice which affords the opposing party an opportunity to be heard with respect to the proposed relief.18 The fundamental purpose of the requirement that allegations of a complaint must provide the measure of recovery is to prevent surprise to the defendant.19 Respondent invokes20 this Court's pronouncement in Heirs of Ramon Durano, Sr. v. Uy21 that "[t]he Court of Appeals is imbued with sufficient discretion to review matters, not otherwise assigned as errors on appeal, if it finds that their consideration is necessary in arriving at a complete and just resolution of the case." 22 He argues that the return of "the P1,000,000 downpayment" is a necessary consequence of the rescission of the sale. 23

That rescission of a sale creates the obligation to return the things which were the object of the contract, together with their fruits, and the price with its interests is undisputed. 24 However, to require DBP to return the alleged P1,000,000 without first giving it an opportunity to present evidence would violate the Constitutional provision that "[n]o person shall be deprived of life, liberty, or property without due process of law x x x."25 The essence of due process is to be found in the reasonable opportunity to be heard and submit any evidence one may have in support of one's defense.26 In the case at bar, DBP had no opportunity to present evidence on its behalf. As it contends, Had [the] issue been raised in the lower court, petitioner DBP could have contested and presented evidence against the returning of the alleged deposit to private respondent. DBP could have shown that private respondentdid not make a deposit in the amount of P1,000,000.00 but only P700,000.00 as the check forP300,000.00 was returned to him. Furthermore, the amount of P700,000.00, as previously discussed, was applied to rental pursuant to the Deed of Conditional Sale dated July 15, 1987. Since this was not raised as an issue, DBP has been denied the opportunity to rebut the belated claim of the private respondent. Manifestly, the Decision of the Appellate Court for the return of the alleged deposit made by the private respondent is baseless and was clearly in contravention of the basic rules of fair play, justice and due process.27 (Emphasis and underscoring supplied) In another vein, as DBP further contends, the Court of Appeals based its order for the refund of P1,000.000 on documents submitted before it. These documents, however, were not only mere photocopies but were never formally offered in evidence, contrary to the provision of Section 3 of Rule 130 of the Rules of Court and Section 34 of Rule 132 of the same Rules which respectively read: SEC. 3. Original document must be produced; exceptions. - When the subject of inquiry is the contents of a document, no evidence shall be admissible other than the original document itself, except in the following cases: (a) When the original has been lost or destroyed, or cannot be produced in court, without bad faith on the part of the offeror; (b) When the original is in the custody or under the control of the party against whom the evidence is offered, and the latter fails to produce it after reasonable notice; (c) When the original consists of numerous accounts or other documents which cannot be examined in court without great loss of time and the fact sought to be established from them is only the general result of the whole; and (d) When the original is a public record in the custody of a public officer or is recorded in a public office. SEC. 34. Offer of evidence. - The court shall consider no evidence which has not been formally offered. The purpose for which the evidence is offered must be specified. WHEREFORE, the petition is GRANTED. The January 11, 2006 decision of the Court of Appeals is REVERSEDand SET ASIDE and the decision of the Department of Agrarian Reform Adjudication Board is REINSTATED. SO ORDERED.