G.R. No. 16483 - Philippine Trust Co. vs. Philippine National Bank

Petitioner: The Local Government Unit of Sta. Cruz, Davao del Sur, represented by its Municipal Mayor, Atty. Joel Ray L. Lopez.
Respondent: The Provincial Office of the Department of Agrarian Reform (DAR), Digos City, Davao del Sur.
Subject Property: The Tan Kim Kee Estate, comprising approximately 220 hectares, originally designated as an industrial zone.

The Tan Kim Kee Estate was classified as an industrial zone through the Municipal Comprehensive Development Plan/Land Use Plan and Zoning Ordinances (MCDP/LUP and ZOs) for the periods CY 1991–2000 and CY 2000–2012.
Such classification was approved by various local and regional bodies including the Municipal Development Council, the Sangguniang Bayan, the Sangguniang Panlalawigan, the Regional Development Council, and inter-agency committees.
The LGU’s intent was to support an agro-industrial program and promote the area as an export processing zone.

In 1994, Braulo Lim, et al., the private landowners of the estate, filed an application to convert the agricultural land into commercial/industrial use.
The conversion was conditionally approved subject to the requirement that the conversion plan be implemented within five years; the period was later extended on further application.
Before the lapse of the prescribed period, the same landowners filed an application seeking to exclude the estate from the Comprehensive Agrarian Reform Program (CARP) by asserting that the land was actually, exclusively, and directly used for cattle raising.
In 2012, however, the DAR subsequently placed the estate under CARP coverage, and in a January 3, 2013 order, it denied the application for exclusion.

The petitioner (LGU of Sta. Cruz) filed a petition for an injunction with an application for a permanent restraining order against the DAR to prevent the inclusion of the estate within the coverage of the CARP.
The petitioner contended that the reclassification of the estate as industrial land—taken as an exercise of local government autonomy—should ensure the area is not subject to CARP, thereby safeguarding the approved development plans and future economic benefits.
In a supplemental petition, arguments were advanced that failure to grant the injunction would cause irreparable harm to both the LGU and potential investors, prejudicing the approved town plans.

The respondent argued that the legally prescribed conversion process was not satisfied by the landowners, justifying the placement under CARP.
It was raised that the proper remedy for challenging a DAR decision under the Comprehensive Agrarian Reform Law (CARL) is through a petition for certiorari filed with the Court of Appeals, not directly before the Supreme Court.
In addition, the issue of standing was raised since the petitioner, as an LGU and not the registered owner, did not qualify as the real party in interest under Rule 3, Section 2 of the Rules of Court.
A concurring opinion further stressed that the lack of concrete evidence and the reliance on speculative future benefits rendered the petitioner’s claims insufficient to overcome these procedural defects.

Whether the petition for injunctive relief was properly filed in the correct judicial forum, considering that Section 54 of the CARL mandates that disputes against DAR decisions be brought before the Court of Appeals.
Whether the application of the doctrine of hierarchy of courts precludes this Court from directly assuming jurisdiction over the petition.

Whether the petitioner, being the LGU of Sta. Cruz and not the actual owner of the Tan Kim Kee Estate, qualifies as the real party in interest capable of initiating the suit.

Whether the reclassification of the Tan Kim Kee Estate as industrial land by the LGU is sufficient to remove the property from the coverage of the Comprehensive Agrarian Reform Law (CARL).
Whether the failure to comply with the DAR’s conversion plan conditions validates the estate’s inclusion under CARP despite the local reclassification.