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Case digest · Reclassification vs. conversion; the DAR’s conversion authority
Chamber of Real Estate and Builders Associations, Inc. (CREBA) vs. Secretary of Agrarian Reform
In April 2008, during a worsening rice shortage, the Secretary of Agrarian Reform temporarily suspended the processing and approval of all land use conversion applications. An umbrella group of real estate developers went straight to the Supreme Court.
Facts
The petitioner
CREBA is the umbrella organization of some 3,500 private corporations, partnerships, single proprietorships and individuals involved in land and housing development, construction and related fields.
1997–2007
The Secretary of Agrarian Reform issued a series of rules on land use conversion. DAR AO No. 01-02, as amended by DAR AO No. 05-07, applied the conversion rules to agricultural lands reclassified by an LGU or by Presidential Proclamation to non-agricultural uses on or after June 15, 1988, and included in the definition of agricultural lands “lands not reclassified as residential, commercial, industrial or other non-agricultural uses before 15 June 1988.”
April 15, 2008
To address the unabated conversion of prime agricultural lands for real estate development, the Secretary issued Memorandum No. 88, which temporarily suspended the processing and approval of all land use conversion applications. CREBA claimed that this slowed down housing projects.
The petition
CREBA filed a petition for certiorari and prohibition directly with the Supreme Court. It argued that the DAR had no jurisdiction over lands already reclassified by LGUs, that the administrative order violated Sec. 65 of R.A. No. 6657, Sec. 20 of R.A. No. 7160 and local autonomy, that it denied due process and equal protection, and that Memorandum No. 88 was not a valid exercise of police power.
Issue
Did the Secretary of Agrarian Reform gravely abuse his discretion in subjecting lands reclassified on or after June 15, 1988 to the DAR’s conversion authority, and in suspending the processing of conversion applications?
Ruling
No. The Court dismissed the petition, with costs against CREBA.
On procedure, the petition should have been filed first with the Court of Appeals under the hierarchy of courts. In essence it sought a declaration that the issuances were unconstitutional or illegal, which is declaratory relief over which the Supreme Court has only appellate jurisdiction. Certiorari also did not lie, because the Secretary issued the rules in the exercise of quasi-legislative and administrative functions, not judicial or quasi-judicial ones. Even setting these aside, the petition failed. Executive Order No. 129-A authorized the DAR to approve or disapprove the conversion of agricultural lands into non-agricultural uses and to issue rules for agrarian reform. After June 15, 1988, reclassified agricultural lands must go through conversion, while lands reclassified before that date are exempt. Sec. 20 of the Local Government Code recognizes the DAR’s authority, so the power of LGUs to reclassify is not absolute and local autonomy was not violated. The penalties merely implement Secs. 73 and 74 of R.A. No. 6657 and Sec. 11 of R.A. No. 8435. Memorandum No. 88, issued on the President’s instruction because of the worsening rice shortage, was made pursuant to the general welfare.
“Reclassification of agricultural lands is one thing, conversion is another. Agricultural lands that are reclassified to non-agricultural uses do not ipso facto allow the landowner thereof to use the same for such purpose.”
Doctrine
Conversion and reclassification differ. Summarizing Alarcon vs. Court of Appeals, the Court described conversion as changing the current use of agricultural land into some other use as approved by the DAR, and reclassification as specifying how agricultural lands shall be utilized for non-agricultural uses, as embodied in the land use plan. The DAR’s conversion authority began when R.A. No. 6657 took effect: “Any reclassification, therefore, of agricultural lands to residential, commercial, industrial or other non-agricultural uses either by the LGUs or by way of Presidential Proclamations enacted on or after 15 June 1988 must undergo the process of conversion, despite having undergone reclassification, before agricultural lands may be used for other purposes.” Lands already reclassified before that date are exempt from conversion. Conversion is also not necessary when a Presidential Proclamation reserves public agricultural lands for a public use or purpose.
Compare: before June 15, 1988
In Natalia Realty, Inc. vs. Department of Agrarian Reform, G.R. No. 103302, August 12, 1993, land set aside as a townsite in 1979 and developed under housing permits before the CARL took effect needed no DAR approval: “Since the NATALIA lands were converted prior to 15 June 1988, respondent DAR is bound by such conversion.”
Bar tip
Answer a reclassification question with CREBA’s line, “Reclassification of agricultural lands is one thing, conversion is another,” then check the date: reclassification on or after June 15, 1988 still needs DAR conversion. Note the procedural lesson too: going straight to the Supreme Court without special and important reasons runs against the hierarchy of courts.
Hear it explained
Land Titles Jurisprudence Ep. 3, at 5:58
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This digest is general legal information for education, not legal advice, and it is not a substitute for reading the decision. Quoted passages are taken word for word from the full text.