G.R. No. 126713 - Cruz vs. Court of Appeals

Case Summary (G.R. No. 126713)

Petitioner's allegations and claimed harms

CREBA alleged that AO No. 01-02 (as amended) and Memorandum No. 88 were issued with grave abuse of discretion and without jurisdiction because the DAR: (a) purportedly expanded the statutory definition of “agricultural lands” to include lands reclassified to non-agricultural uses on or after 15 June 1988, (b) asserted jurisdiction over lands reclassified by LGUs or Presidential proclamation after that cut-off date, (c) infringed local autonomy under RA 7160 and the Constitution, (d) violated due process and equal protection by restraining legitimate land use and imposing penalties, and (e) exceeded police power in issuing Memorandum No. 88.

Issues framed by petitioner

CREBA presented five core issues: (1) whether DAR has jurisdiction over lands reclassified as non-agricultural; (2) whether the Secretary exceeded jurisdiction/gravely abused discretion by regulating reclassified lands through AO No. 01-02; (3) whether AO No. 01-02 violates LGU autonomy; (4) whether AO No. 01-02 violates due process and equal protection; and (5) whether Memorandum No. 88 is a valid exercise of police power.

Procedural threshold: improper direct resort to the Supreme Court

The Court emphasized the judicial hierarchy doctrine: concurrent jurisdiction on certain writs does not grant unfettered choice of forum. Direct invocation of the Supreme Court’s original jurisdiction is limited to exceptional cases with special and important reasons. CREBA failed to demonstrate such reasons and thus improperly filed the petition directly in the Supreme Court instead of first resorting to the Court of Appeals. This procedural deficiency alone warranted dismissal.

Nature of relief sought and Supreme Court jurisdictional limit

Although styled as a petition for certiorari, the petition’s substance sought declaratory relief as to the unconstitutionality and illegality of the administrative issuances. Under Article VIII, Section 5 of the 1987 Constitution, the Supreme Court’s original jurisdiction over certiorari is limited and the Court’s authority to decide constitutionality of regulations generally arises on appeal or by way of direct invocation only in cases falling squarely within its original jurisdiction. The Court reiterated that it does not have original jurisdiction to entertain declaratory relief of the kind sought here.

Rule 65 requisites and inapplicability to respondent’s acts

The Court reviewed the requisites for certiorari under Rule 65: (1) the writ is directed against a tribunal/board/officer exercising judicial or quasi-judicial functions; (2) such body acted without or in excess of jurisdiction or with grave abuse of discretion; and (3) there is no other plain, speedy, and adequate remedy. The Secretary’s issuance of AO No. 01-02 (as amended) and Memorandum No. 88 were administrative and quasi-legislative acts, not judicial or quasi-judicial adjudications. The Secretary did not resolve parties’ legal rights through adjudication in issuing the rules; thus, certiorari under Rule 65 was not the appropriate remedy.

DAR’s statutory and executive authority to promulgate conversion rules

The Court found that Executive Order No. 129-A vested the DAR with responsibility to implement CARP and expressly authorized the DAR to promulgate operational policies, rules, regulations, and to approve or disapprove land conversion. Sections cited in the order (e.g., Sections 4(k), 5(c), 5(l), and 7) supply the DAR Secretary with the authority to define the scope of conversion and to promulgate implementing rules. Thus, issuance of AO No. 01-02 and its definition of agricultural lands for conversion purposes fell within the Secretary’s delegated administrative authority.

Definition of “agricultural lands” and the 15 June 1988 cut-off

AO No. 01-02 included, for conversion purposes, lands “not reclassified as residential, commercial, industrial or other non-agricultural uses before 15 June 1988,” identifying the date of RA 6657’s effectivity as the cut-off. The Court validated this formulation: after RA 6657’s effectivity DAR conversion authority applies to reclassifications made on or after that date, while lands reclassified before that date are exempted from DAR conversion clearance. The inclusion, therefore, clarifies which reclassifications remain subject to DAR’s conversion jurisdiction and does not unlawfully expand the statutory meaning of “agricultural lands.”

Distinction between reclassification and conversion; practical effect

The Court reiterated and applied established jurisprudence: reclassification (by LGUs or Presidential proclamation) specifies intended land use in land-use plans but does not itself change the current use; conversion is the administrative act authorizing change in actual use. Thus, even when lands are reclassified to non-agricultural uses, conversion clearance from DAR is required before the landowner may change the land’s actual use, except for certain public land reservations by Presidential proclamation which, being public-domain reservations for public use, do not require conversion.

Relationship with Local Government Code (LGU autonomy)

Section 20 of RA 7160 recognizes local authority to reclassify but explicitly provides that nothing in that section repeals or modifies RA 6657. The Court concluded AO No. 01-02’s requirement that reclassification be subject to conversion procedures does not violate LGU autonomy. DAR’s conversion authority coexists with LGU reclassification power; reclassification is not dispositive of conversion

Case Syllabus (G.R. No. 126713)

Case Citation and Court

Reported at 635 Phil. 283.
First Division of the Supreme Court of the Philippines.
G.R. No. 183409, June 18, 2010.
Decision authored by Justice Perez; Chief Justice Corona (Chairperson), Justices Velasco, Jr., Leonardo-De-Castro, and Del Castillo concur.

Nature of the Action and Reliefs Sought

Petition for Certiorari and Prohibition under Rule 65 of the 1997 Revised Rules of Civil Procedure.
Accompanied by application for Temporary Restraining Order and/or Writ of Preliminary Injunction.
Principal relief sought: nullification and prohibition of enforcement of Department of Agrarian Reform (DAR) Administrative Order No. 01-02 (as amended by DAR AO No. 05-07) and DAR Memorandum No. 88 on grounds of grave abuse of discretion amounting to lack or excess of jurisdiction, illegality, and unconstitutionality.

Parties

Petitioner: Chamber of Real Estate and Builders Associations, Inc. (CREBA) — private non-stock, non-profit corporation; umbrella organization of some 3,500 private corporations, partnerships, single proprietorships, and individuals involved in land and housing development, construction, materials production and supply, and related services.
Respondent: The Secretary of Agrarian Reform — head of the Department of Agrarian Reform (DAR), the official issuing the administrative orders at issue.

Antecedent Facts and Chronology of Administrative Issuances

29 October 1997: DAR AO No. 07-97 — "Omnibus Rules and Procedures Governing Conversion of Agricultural Lands to Non-Agricultural Uses," consolidating implementing guidelines related to land use conversion; embraced private agricultural lands regardless of tenure and certain untitled and LGU-reclassified agricultural lands after 15 June 1988.
30 March 1999: DAR AO No. 01-99 — "Revised Rules and Regulations on the Conversion of Agricultural Lands to Non-agricultural Uses," amending and updating previous rules; coverage described (conversions to residential/commercial/industrial/institutional and other scenarios affecting CARP coverage).
28 February 2002: DAR AO No. 01-02 — "2002 Comprehensive Rules on Land Use Conversion," further amended DAR AO No. 07-97 and DAR AO No. 01-99 and repealed inconsistent issuances; covered all applications for conversion from agricultural to non-agricultural uses or to another agricultural use.
2 August 2007: DAR AO No. 05-07 — amendment to certain provisions of DAR AO No. 01-02, particularly addressing conversion in times of exigency and calamity (notably amending Sections 3.1 and 6.2).
15 April 2008: DAR Memorandum No. 88 — temporarily suspended processing and approval of all land use conversion applications to address unabated conversion of prime agricultural lands for real estate development.

Legal and Statutory Background Emphasized by the Court

Republic Act No. 6657 (The Comprehensive Agrarian Reform Law of 1988) — effectivity date 15 June 1988; includes Section 65 on conversion of lands and other provisions governing agrarian reform.
Republic Act No. 7160 (The Local Government Code of 1991) — Section 20 on Reclassification of Lands (LGU power to reclassify and limitations; explicit preservation of RA 6657 provisions).
Republic Act No. 8435 (The Agriculture and Fisheries Modernization Act of 1997) — Section 11 penalizing premature or illegal conversion and administrative sanctions.
Executive Order No. 129-A (The Reorganization Act of the Department of Agrarian Reform, approved 26 July 1987) — vests responsibility upon DAR to implement CARP; Sections authorizing DAR to promulgate operational policies, approve/disapprove conversion, and vesting authority in the Secretary.
Department of Justice Opinion No. 44, Series of 1990 — DOJ view that DAR's authority to approve land conversions may be exercised from RA 6657’s effectivity (15 June 1988).

Provisions of DAR AO No. 01-02 (as amended) that are the Subject of the Petition

Section 3 (Applicability of Rules) — applies to "all applications for conversion, from agricultural to non-agricultural uses or to another agricultural use" and includes subsection 3.4: "Conversion of agricultural lands or areas that have been reclassified by the LGU or by way of a Presidential Proclamation, to residential, commercial, industrial, or other non-agricultural uses on or after the effectivity of RA 6657 on 15 June 1988."
Section 2.19 (Article I) — definition of "Reclassification of Agricultural Lands" stating reclassification is subject to the requirements and procedure for land use conversion, undertaken by LGUs in accordance with Section 20 of RA 7160 and relevant joint memoranda/circulars; includes reversion of non-agricultural lands to agricultural use.
Administrative and criminal penalties in the order implement Sections 73 and 74 of RA 6657 and penalties in RA 8435.

Issues Presented by Petitioner (as framed in its Memorandum)

I. Whether the DAR Secretary has jurisdiction over lands that have been reclassified as residential, commercial, industrial, or for other non-agricultural uses.
II. Whether the DAR Secretary acted in excess of his jurisdiction and gravely abused his discretion by issuing and enforcing DAR AO No. 01-02 (as amended) to regulate reclassified lands.
III. Whether DAR AO No. 01-02 (as amended) violates the local autonomy of Local Government Units (LGUs).
IV. Whether DAR AO No. 01-02 (as amended) violates due process and equal protection clauses of the Constitution.
V. Whether Memorandum No. 88 is a valid exercise of police power.

Petitioner’s Principal Contentions and Legal Arguments

DAR has no authority to expand the legal signification of "agricultural lands" by administrative issuance; inclusion of "lands not reclassified ... before 15 June 1988" effectively treats lands reclassified after that date as still agricultural for conversion/redistribution purposes.
DAR AO No. 01-02 (as amended) improperly requires reclassified lands or non-awarded lands to submit to DAR conversion authority despite no statutory grant in Section 65 or elsewhere; issuance thus constituted grave abuse of discretion amounting to lack or excess of jurisdiction.
Section 2.19 of DAR AO No. 01-02 violates Section 20 of RA 7160 and the constitutional guarantees of local autonomy (Sections 25, Article II and Section 2, Article X of the 1987 Constitution).
The administrative order results in deprivation of liberty and property without due process and offends equal protection by favoring the peasantry over other sectors.
Memora