G.R. No. 183409, June 18, 2010 No. 05-07, and DAR Memorandum No.
No. 05-07, and DAR Memorandum No. 88, for having been issued by the
CHAMBER OF REAL ESTATE AND BUILDERS ASSOCIATIONS, INC.
(CREBA)
VS.
THE SECRETARY OF AGRARIAN REFORM
CREBA, a private non-stock, non-profit corporation duly organized and existing under the
laws of the Republic of the Philippines, is the umbrella organization of some 3,500 private
corporations, partnerships, single proprietorships and individuals directly or indirectly involved in land
and housing development, building and infrastructure construction, materials production and supply,
and services in the various related fields of engineering, architecture, community planning and
development financing.
* Secretary of Agrarian Reform- issued the following Orders:
-DAR AO No. 07-97, entitled "Omnibus Rules and Procedures Governing
Conversion of Agricultural Lands to Non-Agricultural Uses," which consolidated all
existing implementing guidelines related to land use conversion. The aforesaid rules
embraced all private agricultural lands regardless of tenurial arrangement and
commodity produced, and all untitled agricultural lands and agricultural lands
reclassified by LGUs into non-agricultural uses after 15 June 1988.
-DAR AO No. 01-99, entitled "Revised Rules and Regulations on the
Conversion of Agricultural Lands to Non-agricultural Uses," amending and
updating the previous rules on land use conversion. Its coverage includes the
following agricultural lands, to wit:
(1) those to be converted to residential, commercial, industrial, institutional and other non-
agricultural purposes;
(2) those to be devoted to another type of agricultural activity such as livestock, poultry, and
fishpond-the effect of which is to exempt the land from the CARP coverage;
(3) those to be converted to non-agricultural use other than that previously authorized; and
(4) those reclassified to residential, commercial, industrial, or other non-agricultural uses on
or after the effectivity of Republic Act No. 6657.
-issued DAR AO No. 01-02, entitled "2002 Comprehensive Rules on Land
Use Conversion," which further amended the two previous AO, and repealed all
issuances inconsistent therewith. The aforesaid DAR AO No. 01-02 covers all
applications for conversion from agricultural to non-agricultural uses or to another
agricultural use.
-amended certain provisions of DAR AO No. 01-02 by formulating DAR
AO No. 05-07, particularly addressing land conversion in time of exigencies and
calamities.
-issued Memorandum No. 88 on 15 April 2008, which temporarily
suspended the processing and approval of all land use conversion applications.
* CREBA- filed a Petition for Certiorari and Prohibition seeking to nullify and
prohibit the enforcement of DAR AO No. 01-02, as amended by DAR AO
Secretary of Agrarian Reform with grave abuse of discretion amounting to
lack or excess of jurisdiction as some provisions of the aforesaid
administrative issuances are illegal and unconstitutional.
-- claims that by reason thereof, there is an actual slowdown of housing
projects, which, in turn, aggravated the housing shortage, unemployment and illegal
squatting problems to the substantial prejudice not only of the petitioner and its
members but more so of the whole nation.
(1ST) holds that under R.A. No. 6657 and R.A. No. 8435, the term
agricultural lands refers to "lands devoted to or suitable for the cultivation of the soil, planting
of crops, growing of fruit trees, raising of livestock, poultry or fish, including the harvesting of such
farm products, and other farm activities and practices performed by a farmer in conjunction with such
farming operations done by a person whether natural or juridical, and not classified by the law as
mineral, forest, residential, commercial or industrial land." When the Secretary issued DAR
AO No. 01-02, as amended, he included in the definition of agricultural lands "lands
not reclassified as residential, commercial, industrial or other non-agricultural uses
before 15 June 1988." In effect, lands reclassified from agricultural to residential,
commercial, industrial, or other non-agricultural uses after 15 June 1988 are
considered to be agricultural lands for purposes of conversion, redistribution, or
otherwise. In so doing, the Secretary has no authority to expand or enlarge the legal
signification of the term agricultural lands through DAR AO No. 01-02. Being a
mere administrative issuance, it must conform to the statute it seeks to implement,
i.e., Republic Act No. 6657, or to the Constitution.
(2ND) Sec. 3 of DAR AO No. 01-02, as amended, was made in violation of
Section 65 of R.A. No. 6657 because it covers all applications for conversion from
agricultural to non-agricultural uses or to other agricultural uses, such as the
conversion of agricultural lands or areas that have been reclassified by the LGUs or
by way of Presidential Proclamations, to residential, commercial, industrial or other
non-agricultural uses on or after 15 June 1988. There is nothing in Section 65 that
confers to the DAR the jurisdiction or authority to require that non-awarded lands
or reclassified lands be submitted to its conversion authority.
(3RD) further asseverates that Section 2.19, Article I of DAR AO No. 01-
02, as amended, making reclassification of agricultural lands subject to the
requirements and procedure for land use conversion, violates Section 20 of R.A. No.
7160, because it was not provided therein (R.A. 7160) that reclassification by LGUs
shall be subject to conversion procedures or requirements, or that the DAR's
approval or clearance must be secured to effect reclassification. It also contravenes
the constitutional mandate on local autonomy in the Constitution.
(4TH) avers that the promulgation and enforcement of DAR AO No. 01-02,
as amended, constitute deprivation of liberty and property without due process
of law because under it, lands that are not within DAR's jurisdiction are unjustly,
arbitrarily and oppressively prohibited or restricted from legitimate use on pain of
administrative and criminal penalties. More so, there is discrimination and violation
of the equal protection clause of the Constitution because the aforesaid
administrative order is patently biased in favor of the peasantry at the expense of all
other sectors of society.
(5TH) avows that DAR Memorandum No. 88 is not a valid exercise of police
power for it is the prerogative of the legislature.
ISSUES: (1) Whether the DAR Secretary has jurisdiction over lands that have
been reclassified as residential, commercial, industrial, or for other non-
agricultural uses.
(2) 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.
(3) Whether the DAR AO No. 01-02, as amended violates the local
autonomy of LGUs.
(4) Whether the DAR AO No. 01-02, as amended violates the due process
and equal protection of the Constitution.
(5) Whether Memorandum No. 88 is a valid exercise of police power.
I. YES
* E.O. No. 129-A vested upon the DAR the responsibility of implementing the
CARP. Section 5(c) of the said executive order authorized the DAR to establish and promulgate
operational policies, rules and regulations and priorities for agrarian reform implementation. Section
4(k) thereof authorized the DAR to approve or disapprove the conversion, restructuring or
readjustment of agricultural lands into non-agricultural uses. Section 5(l) of the same executive
order has given the DAR the exclusive authority to approve or disapprove conversion of agricultural
lands for residential, commercial, industrial, and other land uses as may be provided for by law.
* As to the first contention of CREBA, the Secretary of Agrarian Reform merely
acted within the scope of his authority stated in the aforesaid sections of Executive
Order No. 129-A, which is to promulgate rules and regulations for agrarian reform
implementation and that includes the authority to define agricultural lands for
purposes of land use conversion. Further, the definition of agricultural lands under
DAR AO No. 01-02, as amended, merely refers to the category of agricultural lands
that may be the subject for conversion to non-agricultural uses and is not in any way
confined to agricultural lands in the context of land redistribution as provided for
under Republic Act No. 6657.
* The authority of the Secretary of Agrarian Reform to include "lands not
reclassified as residential, commercial, industrial or other non-agricultural uses
before 15 June 1988" in the definition of agricultural lands finds basis in
jurisprudence. In Ros v. Department of Agrarian Reform, this Court has enunciated
that after the passage of Republic Act No. 6657, agricultural lands, though
reclassified, have to go through the process of conversion, jurisdiction over which
is vested in the DAR. However, agricultural lands, which are already reclassified
before the effectivity of Republic Act No. 6657 which is 15 June 1988, are
exempted from conversion.
* It bears stressing that the said date of effectivity of Republic Act No. 6657 served
as the cut-off period for automatic reclassifications or rezoning of agricultural
lands that no longer require any DAR conversion clearance or authority. It
necessarily follows that any reclassification made thereafter can be the subject of
DAR's conversion authority. Having recognized the DAR's conversion authority
over lands reclassified after 15 June 1988, it can no longer be argued that the
Secretary of Agrarian Reform was wrongfully given the authority and power to
include "lands not reclassified as residential, commercial, industrial or other non-
agricultural uses before 15 June 1988" in the definition of agricultural lands.
* As to the second contention of CREBA, it is true that the DAR's express power
over land use conversion provided for under Section 65 of Republic Act No. 6657 is
limited to cases in which agricultural lands already awarded have, after five years,
ceased to be economically feasible and sound for agricultural purposes, or the
locality has become urbanized and the land will have a greater economic value for
residential, commercial or industrial purposes. To suggest, however, that these are
the only instances that the DAR can require conversion clearances would open a
loophole in Republic Act No. 6657 which every landowner may use to evade
compliance with the agrarian reform program.
* Conversion and reclassification differ from each other. Conversion is the act of
changing the current use of a piece of agricultural land into some other use as
approved by the DAR while reclassification is the act of specifying how agricultural
lands shall be utilized for non-agricultural uses such as residential, industrial, and
commercial, as embodied in the land use plan, subject to the requirements and
procedures for land use conversion. In view thereof, a mere reclassification of an
agricultural land does not automatically allow a landowner to change its use. He has
to undergo the process of conversion before he is permitted to use the agricultural
land for other purposes. It is clear from the aforesaid distinction that agricultural
lands though reclassified to residential, commercial, industrial or other non-
agricultural uses must still undergo the process of conversion before they can be used
for the purpose to which they are intended. Nevertheless, emphasis must be given to
the fact that DAR's conversion authority can only be exercised after the effectivity
of Republic Act No. 6657 on 15 June 1988.
* It is of no moment whether the reclassification of agricultural lands to residential,
commercial, industrial or other non-agricultural uses was done by the LGUs or by
way of Presidential Proclamations because either way they must still undergo
conversion process. It bears stressing that the act of reclassifying agricultural lands
to non-agricultural uses simply specifies how agricultural lands shall be utilized for
non-agricultural uses and does not automatically convert agricultural lands to non-
agricultural uses or for other purposes. Even reclassification of agricultural lands by
way of Presidential Proclamations to non-agricultural uses, such as school sites,
needs conversion clearance from the DAR.
* 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.
* It is different, however, when through Presidential Proclamations public
agricultural lands have been reserved in whole or in part for public use or purpose,
i.e., public school, etc., because in such a case, conversion is no longer necessary.
only a positive act of the President is needed to segregate or reserve a piece of land
of the public domain for a public purpose. As such, reservation of public agricultural
lands for public use or purpose in effect converted the same to such use without
undergoing any conversion process and that they must be actually, directly and
exclusively used for such public purpose for which they have been reserved,
otherwise, they will be segregated from the reservations and transferred to the DAR
for distribution to qualified beneficiaries under the CARP.
II. NO.
* Primarily, although this Court, the Court of Appeals and the Regional Trial Courts
have concurrent jurisdiction to issue writs of certiorari, prohibition, mandamus, quo
warranto, habeas corpus and injunction, such concurrence does not give the
petitioner unrestricted freedom of choice of court forum. There is a hierarchy of
courts. A becoming regard for that judicial hierarchy most certainly indicates that
petitions for the issuance of extraordinary writs against first level (inferior) courts
should be filed with the Regional Trial Court, and those against the latter, with the
Court of Appeals.
* The rationale for this rule is two-fold:
(a) it would be an imposition upon the precious time of this Court; and
(b) it would cause an inevitable and resultant delay, intended or otherwise, in the adjudication
of cases, which in some instances had to be remanded or referred to the lower court as the proper forum
under the rules of procedure, or as better equipped to resolve the issues because this Court is not a trier
of facts.
* In the case at bench, petitioner failed to specifically and sufficiently set forth
special and important reasons to justify direct recourse to this Court and why this
Court should give due course to this petition in the first instance.
* Moreover, although the instant petition is styled as a Petition for Certiorari, in
essence, it seeks the declaration by this Court of the unconstitutionality or illegality
of the questioned DAR AO No. 01-02, as amended, and Memorandum No. 88. It,
thus, partakes of the nature of a Petition for Declaratory Relief over which this
Court has only appellate, not original, jurisdiction.
* Even if the petitioner has properly observed the doctrine of judicial hierarchy, this
Petition is still dismissible. The essential requisites for a Petition for Certiorari
under Rule 65 are:
(1) the writ is directed against a tribunal, a board, or an officer exercising judicial or quasi-
judicial functions;
(2) such tribunal, board, or officer has acted without or in excess of jurisdiction, or with
grave abuse of discretion amounting to lack or excess of jurisdiction; and
(3) there is no appeal or any plain, speedy, and adequate remedy in the ordinary course of
law.
* Excess of jurisdiction- as distinguished from absence of jurisdiction means that an act,
though within the general power of a tribunal, board or officer, is not authorized and invalid with respect
to the particular proceeding, because the conditions which alone authorize the exercise of the general
power in respect of it are wanting.
Without jurisdiction- means lack or want of legal power, right or authority to hear and
determine a cause or causes, considered either in general or with reference to a particular matter. It
means lack of power to exercise authority.
Grave abuse of discretion- implies such capricious and whimsical exercise of judgment as
is equivalent to lack of jurisdiction or, in other words, where the power is exercised in an arbitrary
manner by reason of passion, prejudice, or personal hostility, and it must be so patent or gross as to
amount to an evasion of a positive duty or to a virtual refusal to perform the duty enjoined or to act at
all in contemplation of law.
* In the case before this Court, the petitioner fails to meet the above-mentioned
requisites for the proper invocation of a Petition for Certiorari under Rule 65. The
Secretary of Agrarian Reform neither acted in any judicial or quasi-judicial capacity
nor assumed unto himself any performance of judicial or quasi-judicial prerogative.
* A tribunal, board, or officer is said to be exercising judicial function where it has the power to
determine what the law is and what the legal rights of the parties are, and then undertakes to determine
these questions and adjudicate upon the rights of the parties. Quasi-judicial function, on the other
hand, is a term which applies to the actions, discretion, etc., of public administrative officers or bodies
required to investigate facts or ascertain the existence of facts, hold hearings, and draw conclusions
from them as a basis for their official action and to exercise discretion of a judicial nature.
* The Secretary of Agrarian Reform does not fall within the ambit of a tribunal,
board, or officer exercising judicial or quasi-judicial functions. The issuance and
enforcement by the Secretary of Agrarian Reform of the questioned Orders were
done in the exercise of his quasi-legislative and administrative functions and not of
judicial or quasi-judicial functions as he never made any adjudication of rights of the
parties. As such, it can never be said that the Secretary of Agrarian Reform had
acted with grave abuse of discretion amounting to lack or excess of jurisdiction
in issuing and enforcing the questioned Orders.
III. NO.
* As to the 3rd contention of CREBA, Section 20 of R.A. 7160 provides that:
(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:
(3) For fourth to sixth class municipalities, five percent (5%): Provided, further,
That agricultural lands distributed to agrarian reform beneficiaries pursuant to Republic Act
Numbered Sixty-six hundred fifty-seven (R.A. No. 6657), otherwise known as "The
Comprehensive Agrarian Reform Law," shall not be affected by the said reclassification and
the conversion of such lands into other purposes shall be governed by Section 65 of said Act.
(e) Nothing in this Section shall be construed as repealing, amending, or modifying in any
manner the provisions of R.A. No. 6657.
* The aforequoted provisions of law show that the power of the LGUs to reclassify WHEREFORE, premises considered, the instant Petition for Certiorari is
agricultural lands is not absolute. The authority of the DAR to approve conversion DISMISSED.
of agricultural lands covered by Republic Act No. 6657 to non-agricultural uses has
been validly recognized by par. [e] of Section 20.

IV. NO.
* As to the 4th contention of CREBA, in providing administrative and criminal
penalties in the said administrative order, the Secretary of Agrarian Reform simply
implements the provisions of Republic Act No. 6657 thus:

Sec. 73. Prohibited Acts and Omissions. - The following are prohibited:
(c) The conversion by any landowner of his agricultural land into any non-agricultural use
with intent to avoid the application of this Act to his landholdings and to disposes his tenant farmers of
the land tilled by them;
(f) The sale, transfer or conveyance by a beneficiary of the right to use or any other
usufructuary right over the land he acquired by virtue of being a beneficiary, in order to circumvent the
provisions of this Act.

Sec. 74. Penalties. Any person who knowingly or willfully violates the provisions of this Act shall be
punished by imprisonment of not less than one (1) month to not more than three (3) years or a fine of
not less than one thousand pesos (P1,000.00) and not more than fifteen thousand pesos (P15,000.00),
or both, at the discretion of the court.
If the offender is a corporation or association, the officer responsible therefor shall be
criminally liable.

* And Section 11 of Republic Act No. 8435, which specifically provides:

Sec. 11. Penalty for Agricultural Inactivity and Premature Conversion. - Any person found guilty of
premature or illegal conversion shall be penalized with imprisonment of two (2) to six (6) years, or a
fine equivalent to one hundred percent (100%) of the government's investment cost, or both, at the
discretion of the court, and an accessory penalty of forfeiture of the land and any improvement thereon.
In addition, the DAR may impose the following penalties, after determining, in an
administrative proceedings, that violation of this law has been committed:
a. Consolation or withdrawal of the authorization for land use conversion; and
b. Blacklisting, or automatic disapproval of pending and subsequent conversion applications
that they may file with the DAR.
*The administrative and criminal penalties provided for under DAR AO No. 01-02,
as amended, are imposed upon the illegal or premature conversion of lands within
DAR's jurisdiction, i.e., "lands not reclassified as residential, commercial, industrial
or for other non-agricultural uses before 15 June 1998."

V. YES
* It bears emphasis that said Memorandum No. 88 was issued upon the instruction
of the President in order to address the unabated conversion of prime agricultural
lands for real estate development because of the worsening rice shortage in the
country at that time. Such measure was made in order to ensure that there are enough
agricultural lands in which rice cultivation and production may be carried into. The
issuance of said Memorandum No. 88 was made pursuant to the general welfare of
the public.