G.R. No.

182332

February 23, 2011

MILESTONE FARMS, INC., Petitioner,

vs.
OFFICE OF THE PRESIDENT, Respondent.
DECISION
NACHURA, J.:
Before this Court is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Civil
Procedure, seeking the reversal of the Court of Appeals (CA) Amended Decision 2 dated October 4,
2006 and its Resolution3 dated March 27, 2008.
The Facts
Petitioner Milestone Farms, Inc. (petitioner) was incorporated with the Securities and Exchange
Commission on January 8, 1960.4 Among its pertinent secondary purposes are: (1) to engage in the
raising of cattle, pigs, and other livestock; to acquire lands by purchase or lease, which may be
needed for this purpose; and to sell and otherwise dispose of said cattle, pigs, and other livestock
and their produce when advisable and beneficial to the corporation; (2) to breed, raise, and sell
poultry; to purchase or acquire and sell, or otherwise dispose of the supplies, stocks, equipment,
accessories, appurtenances, products, and by-products of said business; and (3) to import cattle,
pigs, and other livestock, and animal food necessary for the raising of said cattle, pigs, and other
livestock as may be authorized by law.5
On June 10, 1988, a new agrarian reform law, Republic Act (R.A.) No. 6657, otherwise known as the
Comprehensive Agrarian Reform Law (CARL), took effect, which included the raising of livestock,
poultry, and swine in its coverage. However, on December 4, 1990, this Court, sitting en banc, ruled
in Luz Farms v. Secretary of the Department of Agrarian Reform 6 that agricultural lands devoted to
livestock, poultry, and/or swine raising are excluded from the Comprehensive Agrarian Reform
Program (CARP).
Thus, in May 1993, petitioner applied for the exemption/exclusion of its 316.0422-hectare property,
covered by Transfer Certificate of Title Nos. (T-410434) M-15750, (T-486101) M-7307, (T-486102)
M-7308, (T-274129) M-15751, (T-486103) M-7309, (T-486104) M-7310, (T-332694) M-15755, (T486105) M-7311, (T-486106) M-7312, M-8791, (T-486107) M-7313, (T-486108) M-7314, M-8796, (T486109) M-7315, (T-486110) M-9508, and M-6013, and located in Pinugay, Baras, Rizal, from the
coverage of the CARL, pursuant to the aforementioned ruling of this Court in Luz Farms.
Meanwhile, on December 27, 1993, the Department of Agrarian Reform (DAR) issued Administrative
Order No. 9, Series of 1993 (DAR A.O. No. 9), setting forth rules and regulations to govern the
exclusion of agricultural lands used for livestock, poultry, and swine raising from CARP coverage.
Thus, on January 10, 1994, petitioner re-documented its application pursuant to DAR A.O. No. 9. 7
Acting on the said application, the DARs Land Use Conversion and Exemption Committee (LUCEC)
of Region IV conducted an ocular inspection on petitioners property and arrived at the following
findings:

[T]he actual land utilization for livestock, swine and poultry is 258.8422 hectares; the area which
served as infrastructure is 42.0000 hectares; ten (10) hectares are planted to corn and the remaining
five (5) hectares are devoted to fish culture; that the livestock population are 371 heads of cow, 20
heads of horses, 5,678 heads of swine and 788 heads of cocks; that the area being applied for
exclusion is far below the required or ideal area which is 563 hectares for the total livestock
population; that the approximate area not directly used for livestock purposes with an area of 15
hectares, more or less, is likewise far below the allowable 10% variance; and, though not directly
used for livestock purposes, the ten (10) hectares planted to sweet corn and the five (5) hectares
devoted to fishpond could be considered supportive to livestock production.
The LUCEC, thus, recommended the exemption of petitioners 316.0422-hectare property from the
coverage of CARP. Adopting the LUCECs findings and recommendation, DAR Regional Director
Percival Dalugdug (Director Dalugdug) issued an Order dated June 27, 1994, exempting petitioners
316.0422-hectare property from CARP.8
The Southern Pinugay Farmers Multi-Purpose Cooperative, Inc. (Pinugay Farmers), represented by
Timiano Balajadia, Sr. (Balajadia), moved for the reconsideration of the said Order, but the same
was denied by Director Dalugdug in his Order dated November 24, 1994. 9 Subsequently, the
Pinugay Farmers filed a letter-appeal with the DAR Secretary.
Correlatively, on June 4, 1994, petitioner filed a complaint for Forcible Entry against Balajadia and
company before the Municipal Circuit Trial Court (MCTC) of Teresa-Baras, Rizal, docketed as Civil
Case No. 781-T.10 The MCTC ruled in favor of petitioner, but the decision was later reversed by the
Regional Trial Court, Branch 80, of Tanay, Rizal. Ultimately, the case reached the CA, which, in its
Decision11 dated October 8, 1999, reinstated the MCTCs ruling, ordering Balajadia and all
defendants therein to vacate portions of the property covered by TCT Nos. M-6013, M-8796, and M8791. In its Resolution12 dated July 31, 2000, the CA held that the defendants therein failed to timely
file a motion for reconsideration, given the fact that their counsel of record received its October 8,
1999 Decision; hence, the same became final and executory.
In the meantime, R.A. No. 6657 was amended by R.A. No. 7881, 13 which was approved on February
20, 1995. Private agricultural lands devoted to livestock, poultry, and swine raising were excluded
from the coverage of the CARL. On October 22, 1996, the fact-finding team formed by the DAR
Undersecretary for Field Operations and Support Services conducted an actual headcount of the
livestock population on the property. The headcount showed that there were 448 heads of cattle and
more than 5,000 heads of swine.
The DAR Secretarys Ruling
On January 21, 1997, then DAR Secretary Ernesto D. Garilao (Secretary Garilao) issued an Order
exempting from CARP only 240.9776 hectares of the 316.0422 hectares previously exempted by
Director Dalugdug, and declaring 75.0646 hectares of the property to be covered by CARP.14
Secretary Garilao opined that, for private agricultural lands to be excluded from CARP, they must
already be devoted to livestock, poultry, and swine raising as of June 15, 1988, when the CARL took
effect. He found that the Certificates of Ownership of Large Cattle submitted by petitioner showed
that only 86 heads of cattle were registered in the name of petitioners president, Misael Vera, Jr.,
prior to June 15, 1988; 133 were subsequently bought in 1990, while 204 were registered from 1992
to 1995. Secretary Garilao gave more weight to the certificates rather than to the headcount
because "the same explicitly provide for the number of cattle owned by petitioner as of June 15,
1988."

Applying the animal-land ratio (1 hectare for grazing for every head of cattle/carabao/horse) and the
infrastructure-animal ratio (1.7815 hectares for 21 heads of cattle/carabao/horse, and 0.5126
hectare for 21 heads of hogs) under DAR A.O. No. 9, Secretary Garilao exempted 240.9776
hectares of the property, as follows:
1. 86 hectares for the 86 heads of cattle existing as of 15 June 1988;
2. 8 hectares for infrastructure following the ratio of 1.7815 hectares for every 21 heads of
cattle;
3. 8 hectares for the 8 horses;
4. 0.3809 square meters of infrastructure for the 8 horses; [and]
5. 138.5967 hectares for the 5,678 heads of swine. 15
Petitioner filed a Motion for Reconsideration,16 submitting therewith copies of Certificates of Transfer
of Large Cattle and additional Certificates of Ownership of Large Cattle issued to petitioner prior to
June 15, 1988, as additional proof that it had met the required animal-land ratio. Petitioner also
submitted a copy of a Disbursement Voucher dated December 17, 1986, showing the purchase of
100 heads of cattle by the Bureau of Animal Industry from petitioner, as further proof that it had been
actively operating a livestock farm even before June 15, 1988. However, in his Order dated April 15,
1997, Secretary Garilao denied petitioners Motion for Reconsideration. 17
Aggrieved, petitioner filed its Memorandum on Appeal18 before the Office of the President (OP).
The OPs Ruling
On February 4, 2000, the OP rendered a decision19 reinstating Director Dalugdugs Order dated June
27, 1994 and declared the entire 316.0422-hectare property exempt from the coverage of CARP.
However, on separate motions for reconsideration of the aforesaid decision filed by farmer-groups
Samahang Anak-Pawis ng Lagundi (SAPLAG) and Pinugay Farmers, and the Bureau of Agrarian
Legal Assistance of DAR, the OP issued a resolution20 dated September 16, 2002, setting aside its
previous decision. The dispositive portion of the OP resolution reads:
WHEREFORE, the Decision subject of the instant separate motions for reconsideration is hereby
SET ASIDE and a new one entered REINSTATING the Order dated 21 January 1997 of then DAR
Secretary Ernesto D. Garilao, as reiterated in another Order of 15 April 1997, without prejudice to the
outcome of the continuing review and verification proceedings that DAR, thru the appropriate
Municipal Agrarian Reform Officer, may undertake pursuant to Rule III (D) of DAR Administrative
Order No. 09, series of 1993.
SO ORDERED.21
The OP held that, when it comes to proof of ownership, the reference is the Certificate of Ownership
of Large Cattle. Certificates of cattle ownership, which are readily available being issued by the
appropriate government office ought to match the number of heads of cattle counted as existing
during the actual headcount. The presence of large cattle on the land, without sufficient proof of
ownership thereof, only proves such presence.

Taking note of Secretary Garilaos observations, the OP also held that, before an ocular investigation
is conducted on the property, the landowners are notified in advance; hence, mere reliance on the
physical headcount is dangerous because there is a possibility that the landowners would increase
the number of their cattle for headcount purposes only. The OP observed that there was a big
variance between the actual headcount of 448 heads of cattle and only 86 certificates of ownership
of large cattle.
Consequently, petitioner sought recourse from the CA.22
The Proceedings Before the CA and Its Rulings
On April 29, 2005, the CA found that, based on the documentary evidence presented, the property
subject of the application for exclusion had more than satisfied the animal-land and infrastructureanimal ratios under DAR A.O. No. 9. The CA also found that petitioner applied for exclusion long
before the effectivity of DAR A.O. No. 9, thus, negating the claim that petitioner merely converted the
property for livestock, poultry, and swine raising in order to exclude it from CARP coverage.
Petitioner was held to have actually engaged in the said business on the property even before June
15, 1988. The CA disposed of the case in this wise:
WHEREFORE, the instant petition is hereby GRANTED. The assailed Resolution of the Office of the
President dated September 16, 2002 is hereby SET ASIDE, and its Decision dated February 4, 2000
declaring the entire 316.0422 hectares exempt from the coverage of the Comprehensive Agrarian
Reform Program is hereby REINSTATED without prejudice to the outcome of the continuing review
and verification proceedings which the Department of Agrarian Reform, through the proper Municipal
Agrarian Reform Officer, may undertake pursuant to Policy Statement (D) of DAR Administrative
Order No. 9, Series of 1993.
SO ORDERED.23
Meanwhile, six months earlier, or on November 4, 2004, without the knowledge of the CA as the
parties did not inform the appellate court then DAR Secretary Rene C. Villa (Secretary Villa) issued
DAR Conversion Order No. CON-0410-001624 (Conversion Order), granting petitioners application
to convert portions of the 316.0422-hectare property from agricultural to residential and golf courses
use. The portions converted with a total area of 153.3049 hectares were covered by TCT Nos.
M-15755 (T-332694), M-15751 (T-274129), and M-15750 (T-410434). With this Conversion Order,
the area of the property subject of the controversy was effectively reduced to 162.7373 hectares.
On the CAs decision of April 29, 2005, Motions for Reconsideration were filed by farmer-groups,
namely: the farmers represented by Miguel Espinas25 (Espinas group), the Pinugay Farmers,26 and
the SAPLAG.27 The farmer-groups all claimed that the CA should have accorded respect to the
factual findings of the OP. Moreover, the farmer-groups unanimously intimated that petitioner already
converted and developed a portion of the property into a leisure-residential-commercial estate
known as the Palo Alto Leisure and Sports Complex (Palo Alto).
Subsequently, in a Supplement to the Motion for Reconsideration on Newly Secured Evidence
pursuant to DAR Administrative Order No. 9, Series of 199328 (Supplement) dated June 15, 2005,
the Espinas group submitted the following as evidence:
1) Conversion Order29 dated November 4, 2004, issued by Secretary Villa, converting
portions of the property from agricultural to residential and golf courses use, with a total area
of 153.3049 hectares; thus, the Espinas group prayed that the remaining 162.7373 hectares
(subject property) be covered by the CARP;

2) Letter30 dated June 7, 2005 of both incoming Municipal Agrarian Reform Officer (MARO)
Bismark M. Elma (MARO Elma) and outgoing MARO Cesar C. Celi (MARO Celi) of Baras,
Rizal, addressed to Provincial Agrarian Reform Officer (PARO) II of Rizal, Felixberto Q.
Kagahastian, (MARO Report), informing the latter, among others, that Palo Alto was already
under development and the lots therein were being offered for sale; that there were actual
tillers on the subject property; that there were agricultural improvements thereon, including
an irrigation system and road projects funded by the Government; that there was no existing
livestock farm on the subject property; and that the same was not in the possession and/or
control of petitioner; and
3) Certification31 dated June 8, 2005, issued by both MARO Elma and MARO Celi,
manifesting that the subject property was in the possession and cultivation of actual
occupants and tillers, and that, upon inspection, petitioner maintained no livestock farm
thereon.
Four months later, the Espinas group and the DAR filed their respective Manifestations. 32 In its
Manifestation dated November 29, 2005, the DAR confirmed that the subject property was no longer
devoted to cattle raising. Hence, in its Resolution33 dated December 21, 2005, the CA directed
petitioner to file its comment on the Supplement and the aforementioned Manifestations. Employing
the services of a new counsel, petitioner filed a Motion to Admit Rejoinder,34 and prayed that the
MARO Report be disregarded and expunged from the records for lack of factual and legal basis.
With the CA now made aware of these developments, particularly Secretary Villas Conversion Order
of November 4, 2004, the appellate court had to acknowledge that the property subject of the
controversy would now be limited to the remaining 162.7373 hectares. In the same token, the
Espinas group prayed that this remaining area be covered by the CARP.35
On October 4, 2006, the CA amended its earlier Decision. It held that its April 29, 2005 Decision was
theoretically not final because DAR A.O. No. 9 required the MARO to make a continuing review and
verification of the subject property. While the CA was cognizant of our ruling in Department of
Agrarian Reform v. Sutton,36 wherein we declared DAR A.O. No. 9 as unconstitutional, it still resolved
to lift the exemption of the subject property from the CARP, not on the basis of DAR A.O. No. 9, but
on the strength of evidence such as the MARO Report and Certification, and the Katunayan 37 issued
by the Punong Barangay, Alfredo Ruba (Chairman Ruba), of Pinugay, Baras, Rizal, showing that the
subject property was no longer operated as a livestock farm. Moreover, the CA held that the lease
agreements,38 which petitioner submitted to prove that it was compelled to lease a ranch as
temporary shelter for its cattle, only reinforced the DARs finding that there was indeed no existing
livestock farm on the subject property. While petitioner claimed that it was merely forced to do so to
prevent further slaughtering of its cattle allegedly committed by the occupants, the CA found the
claim unsubstantiated. Furthermore, the CA opined that petitioner should have asserted its rights
when the irrigation and road projects were introduced by the Government within its property. Finally,
the CA accorded the findings of MARO Elma and MARO Celi the presumption of regularity in the
performance of official functions in the absence of evidence proving misconduct and/or dishonesty
when they inspected the subject property and rendered their report. Thus, the CA disposed:
WHEREFORE, this Courts Decision dated April 29, 2005 is hereby amended in that the exemption
of the subject landholding from the coverage of the Comprehensive Agrarian Reform Program is
hereby lifted, and the 162.7373 hectare-agricultural portion thereof is hereby declared covered by
the Comprehensive Agrarian Reform Program.
SO ORDERED.39

Unperturbed, petitioner filed a Motion for Reconsideration.40 On January 8, 2007, MARO Elma, in
compliance with the Memorandum of DAR Regional Director Dominador B. Andres, tendered
another Report41 reiterating that, upon inspection of the subject property, together with petitioners
counsel-turned witness, Atty. Grace Eloisa J. Que (Atty. Que), PARO Danilo M. Obarse, Chairman
Ruba, and several occupants thereof, he, among others, found no livestock farm within the subject
property. About 43 heads of cattle were shown, but MARO Elma observed that the same were inside
an area adjacent to Palo Alto. Subsequently, upon Atty. Ques request for reinvestigation, designated
personnel of the DAR Provincial and Regional Offices (Investigating Team) conducted another ocular
inspection on the subject property on February 20, 2007. The Investigating Team, in its
Report42 dated February 21, 2007, found that, per testimony of petitioners caretaker, Rogelio
Ludivices (Roger),43 petitioner has 43 heads of cattle taken care of by the following individuals: i)
Josefino Custodio (Josefino) 18 heads; ii) Andy Amahit 15 heads; and iii) Bert Pangan 2 heads;
that these individuals pastured the herd of cattle outside the subject property, while Roger took care
of 8 heads of cattle inside the Palo Alto area; that 21 heads of cattle owned by petitioner were seen
in the area adjacent to Palo Alto; that Josefino confirmed to the Investigating Team that he takes
care of 18 heads of cattle owned by petitioner; that the said Investigating Team saw 9 heads of cattle
in the Palo Alto area, 2 of which bore "MFI" marks; and that the 9 heads of cattle appear to have
matched the Certificates of Ownership of Large Cattle submitted by petitioner.
Because of the contentious factual issues and the conflicting averments of the parties, the CA set
the case for hearing and reception of evidence on April 24, 2007.44 Thereafter, as narrated by the
CA, the following events transpired:
On May 17, 2007, [petitioner] presented the Judicial Affidavits of its witnesses, namely, [petitioners]
counsel, [Atty. Que], and the alleged caretaker of [petitioners] farm, [Roger], who were both crossexamined by counsel for farmers-movants and SAPLAG. [Petitioner] and SAPLAG then marked their
documentary exhibits.
On May 24, 2007, [petitioners] security guard and third witness, Rodolfo G. Febrada, submitted his
Judicial Affidavit and was cross-examined by counsel for fa[r]mers-movants and SAPLAG. Farmersmovants also marked their documentary exhibits.
Thereafter, the parties submitted their respective Formal Offers of Evidence. Farmers-movants and
SAPLAG filed their objections to [petitioners] Formal Offer of Evidence. Later, [petitioner] and
farmers-movants filed their respective Memoranda.
In December 2007, this Court issued a Resolution on the parties offer of evidence and considered
[petitioners] Motion for Reconsideration submitted for resolution. 45
Finally, petitioners motion for reconsideration was denied by the CA in its Resolution 46 dated March
27, 2008. The CA discarded petitioners reliance on Sutton. It ratiocinated that the MARO Reports
and the DARs Manifestation could not be disregarded simply because DAR A.O. No. 9 was declared
unconstitutional. The Sutton ruling was premised on the fact that the Sutton property continued to
operate as a livestock farm. The CA also reasoned that, in Sutton, this Court did not remove from the
DAR the power to implement the CARP, pursuant to the latters authority to oversee the
implementation of agrarian reform laws under Section 5047 of the CARL. Moreover, the CA found:
Petitioner-appellant claimed that they had 43 heads of cattle which are being cared for and pastured
by 4 individuals. To prove its ownership of the said cattle, petitioner-appellant offered in evidence 43
Certificates of Ownership of Large Cattle. Significantly, however, the said Certificates were all dated
and issued on November 24, 2006, nearly 2 months after this Court rendered its Amended Decision
lifting the exemption of the 162-hectare portion of the subject landholding. The acquisition of such

cattle after the lifting of the exemption clearly reveals that petitioner-appellant was no longer
operating a livestock farm, and suggests an effort to create a semblance of livestock-raising for the
purpose of its Motion for Reconsideration.48
On petitioners assertion that between MARO Elmas Report dated January 8, 2007 and the
Investigating Teams Report, the latter should be given credence, the CA held that there were no
material inconsistencies between the two reports because both showed that the 43 heads of cattle
were found outside the subject property.
Hence, this Petition assigning the following errors:
I.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED WHEN IT HELD THAT
LANDS DEVOTED TO LIVESTOCK FARMING WITHIN THE MEANING OF LUZ FARMS
AND SUTTON, AND WHICH ARE THEREBY EXEMPT FROM CARL COVERAGE, ARE
NEVERTHELESS SUBJECT TO DARS CONTINUING VERIFICATION AS TO USE, AND,
ON THE BASIS OF SUCH VERIFICATION, MAY BE ORDERED REVERTED TO
AGRICULTURAL CLASSIFICATION AND COMPULSORY ACQUISITION[;]
II.
GRANTING THAT THE EXEMPT LANDS AFORESAID MAY BE SO REVERTED TO
AGRICULTURAL CLASSIFICATION, STILL THE PROCEEDINGS FOR SUCH PURPOSE
BELONGS TO THE EXCLUSIVE ORIGINAL JURISDICTION OF THE DAR, BEFORE
WHICH THE CONTENDING PARTIES MAY VENTILATE FACTUAL ISSUES, AND AVAIL
THEMSELVES OF USUAL REVIEW PROCESSES, AND NOT TO THE COURT OF
APPEALS EXERCISING APPELLATE JURISDICTION OVER ISSUES COMPLETELY
UNRELATED TO REVERSION [; AND]
III.
IN ANY CASE, THE COURT OF APPEALS GRAVELY ERRED AND COMMITTED GRAVE
ABUSE OF DISCRETION WHEN IT HELD THAT THE PROPERTY IN DISPUTE IS NO
LONGER BEING USED FOR LIVESTOCK FARMING.49
Petitioner asseverates that lands devoted to livestock farming as of June 15, 1988 are classified as
industrial lands, hence, outside the ambit of the CARP; that Luz Farms, Sutton, and R.A. No. 7881
clearly excluded such lands on constitutional grounds; that petitioners lands were actually devoted
to livestock even before the enactment of the CARL; that livestock farms are exempt from the CARL,
not by reason of any act of the DAR, but because of their nature as industrial lands; that petitioners
property was admittedly devoted to livestock farming as of June 1988 and the only issue before was
whether or not petitioners pieces of evidence comply with the ratios provided under DAR A.O. No. 9;
and that DAR A.O. No. 9 having been declared as unconstitutional, DAR had no more legal basis to
conduct a continuing review and verification proceedings over livestock farms. Petitioner argues that,
in cases where reversion of properties to agricultural use is proper, only the DAR has the exclusive
original jurisdiction to hear and decide the same; hence, the CA, in this case, committed serious
errors when it ordered the reversion of the property and when it considered pieces of evidence not
existing as of June 15, 1988, despite its lack of jurisdiction; that the CA should have remanded the
case to the DAR due to conflicting factual claims; that the CA cannot ventilate allegations of fact that
were introduced for the first time on appeal as a supplement to a motion for reconsideration of its
first decision, use the same to deviate from the issues pending review, and, on the basis thereof,

declare exempt lands reverted to agricultural use and compulsorily covered by the CARP; that the
"newly discovered [pieces of] evidence" were not introduced in the proceedings before the DAR,
hence, it was erroneous for the CA to consider them; and that piecemeal presentation of evidence is
not in accord with orderly justice. Finally, petitioner submits that, in any case, the CA gravely erred
and committed grave abuse of discretion when it held that the subject property was no longer used
for livestock farming as shown by the Report of the Investigating Team. Petitioner relies on the 1997
LUCEC and DAR findings that the subject property was devoted to livestock farming, and on the
1999 CA Decision which held that the occupants of the property were squatters, bereft of any
authority to stay and possess the property.50
On one hand, the farmer-groups, represented by the Espinas group, contend that they have been
planting rice and fruit-bearing trees on the subject property, and helped the National Irrigation
Administration in setting up an irrigation system therein in 1997, with a produce of 1,500 to 1,600
sacks of palay each year; that petitioner came to court with unclean hands because, while it sought
the exemption and exclusion of the entire property, unknown to the CA, petitioner surreptitiously filed
for conversion of the property now known as Palo Alto, which was actually granted by the DAR
Secretary; that petitioners bad faith is more apparent since, despite the conversion of the 153.3049hectare portion of the property, it still seeks to exempt the entire property in this case; and that the
fact that petitioner applied for conversion is an admission that indeed the property is agricultural. The
farmer-groups also contend that petitioners reliance on Luz Farms and Sutton is unavailing because
in these cases there was actually no cessation of the business of raising cattle; that what is being
exempted is the activity of raising cattle and not the property itself; that exemptions due to cattle
raising are not permanent; that the declaration of DAR A.O. No. 9 as unconstitutional does not at all
diminish the mandated duty of the DAR, as the lead agency of the Government, to implement the
CARL; that the DAR, vested with the power to identify lands subject to CARP, logically also has the
power to identify lands which are excluded and/or exempted therefrom; that to disregard DARs
authority on the matter would open the floodgates to abuse and fraud by unscrupulous landowners;
that the factual finding of the CA that the subject property is no longer a livestock farm may not be
disturbed on appeal, as enunciated by this Court; that DAR conducted a review and monitoring of
the subject property by virtue of its powers under the CARL; and that the CA has sufficient discretion
to admit evidence in order that it could arrive at a fair, just, and equitable ruling in this case. 51
On the other hand, respondent OP, through the Office of the Solicitor General (OSG), claims that the
CA correctly held that the subject property is not exempt from the coverage of the CARP, as
substantial pieces of evidence show that the said property is not exclusively devoted to livestock,
swine, and/or poultry raising; that the issues presented by petitioner are factual in nature and not
proper in this case; that under Rule 43 of the 1997 Rules of Civil Procedure, questions of fact may
be raised by the parties and resolved by the CA; that due to the divergence in the factual findings of
the DAR and the OP, the CA was duty bound to review and ascertain which of the said findings are
duly supported by substantial evidence; that the subject property was subject to continuing review
and verification proceedings due to the then prevailing DAR A.O. No. 9; that there is no question that
the power to determine if a property is subject to CARP coverage lies with the DAR Secretary; that
pursuant to such power, the MARO rendered the assailed reports and certification, and the DAR
itself manifested before the CA that the subject property is no longer devoted to livestock farming;
and that, while it is true that this Courts ruling in Luz Farms declared that agricultural lands devoted
to livestock, poultry, and/or swine raising are excluded from the CARP, the said ruling is not without
any qualification.52
In its Reply53 to the farmer-groups and to the OSGs comment, petitioner counters that the farmergroups have no legal basis to their claims as they admitted that they entered the subject property
without the consent of petitioner; that the rice plots actually found in the subject property, which were
subsequently taken over by squatters, were, in fact, planted by petitioner in compliance with the
directive of then President Ferdinand Marcos for the employer to provide rice to its employees; that

when a land is declared exempt from the CARP on the ground that it is not agricultural as of the time
the CARL took effect, the use and disposition of that land is entirely and forever beyond DARs
jurisdiction; and that, inasmuch as the subject property was not agricultural from the very beginning,
DAR has no power to regulate the same. Petitioner also asserts that the CA cannot
uncharacteristically assume the role of trier of facts and resolve factual questions not previously
adjudicated by the lower tribunals; that MARO Elma rendered the assailed MARO reports with bias
against petitioner, and the same were contradicted by the Investigating Teams Report, which
confirmed that the subject property is still devoted to livestock farming; and that there has been no
change in petitioners business interest as an entity engaged in livestock farming since its inception
in 1960, though there was admittedly a decline in the scale of its operations due to the illegal acts of
the squatter-occupants.
Our Ruling
The Petition is bereft of merit.
Let it be stressed that when the CA provided in its first Decision that continuing review and
verification may be conducted by the DAR pursuant to DAR A.O. No. 9, the latter was not yet
declared unconstitutional by this Court. The first CA Decision was promulgated on April 29, 2005,
while this Court struck down as unconstitutional DAR A.O. No. 9, by way of Sutton, on October 19,
2005. Likewise, let it be emphasized that the Espinas group filed the Supplement and submitted the
assailed MARO reports and certification on June 15, 2005, which proved to be adverse to
petitioners case. Thus, it could not be said that the CA erred or gravely abused its discretion in
respecting the mandate of DAR A.O. No. 9, which was then subsisting and in full force and effect.
While it is true that an issue which was neither alleged in the complaint nor raised during the trial
cannot be raised for the first time on appeal as it would be offensive to the basic rules of fair play,
justice, and due process,54 the same is not without exception,55 such as this case. The CA, under
Section 3,56 Rule 43 of the Rules of Civil Procedure, can, in the interest of justice, entertain and
resolve factual issues. After all, technical and procedural rules are intended to help secure, and not
suppress, substantial justice. A deviation from a rigid enforcement of the rules may thus be allowed
to attain the prime objective of dispensing justice, for dispensation of justice is the core reason for
the existence of courts.57 Moreover, petitioner cannot validly claim that it was deprived of due
process because the CA afforded it all the opportunity to be heard. 58 The CA even directed
petitioner to file its comment on the Supplement, and to prove and establish its claim that the subject
property was excluded from the coverage of the CARP. Petitioner actively participated in the
proceedings before the CA by submitting pleadings and pieces of documentary evidence, such as
the Investigating Teams Report and judicial affidavits. The CA also went further by setting the case
for hearing. In all these proceedings, all the parties rights to due process were amply protected and
recognized.
With the procedural issue disposed of, we find that petitioners arguments fail to persuade. Its
invocation of Sutton is unavailing. In Sutton, we held:
In the case at bar, we find that the impugned A.O. is invalid as it contravenes the Constitution. The
A.O. sought to regulate livestock farms by including them in the coverage of agrarian reform and
prescribing a maximum retention limit for their ownership. However, the deliberations of the 1987
Constitutional Commission show a clear intent to exclude, inter alia, all lands exclusively devoted
to livestock, swine and poultry-raising. The Court clarified in the Luz Farms case that livestock,
swine and poultry-raising are industrial activities and do not fall within the definition of "agriculture" or
"agricultural activity." The raising of livestock, swine and poultry is different from crop or tree farming.
It is an industrial, not an agricultural, activity. A great portion of the investment in this enterprise is in

the form of industrial fixed assets, such as: animal housing structures and facilities, drainage,
waterers and blowers, feedmill with grinders, mixers, conveyors, exhausts and generators, extensive
warehousing facilities for feeds and other supplies, anti-pollution equipment like bio-gas and digester
plants augmented by lagoons and concrete ponds, deepwells, elevated water tanks, pumphouses,
sprayers, and other technological appurtenances.
Clearly, petitioner DAR has no power to regulate livestock farms which have been exempted by the
Constitution from the coverage of agrarian reform. It has exceeded its power in issuing the assailed
A.O.59
Indeed, as pointed out by the CA, the instant case does not rest on facts parallel to those of Sutton
because, in Sutton, the subject property remained a livestock farm. We even highlighted therein the
fact that "there has been no change of business interest in the case of respondents." 60 Similarly, in
Department of Agrarian Reform v. Uy,61 we excluded a parcel of land from CARP coverage due to the
factual findings of the MARO, which were confirmed by the DAR, that the property was entirely
devoted to livestock farming. However, in A.Z. Arnaiz Realty, Inc., represented by Carmen Z. Arnaiz
v. Office of the President; Department of Agrarian Reform; Regional Director, DAR Region V, Legaspi
City; Provincial Agrarian Reform Officer, DAR Provincial Office, Masbate, Masbate; and Municipal
Agrarian Reform Officer, DAR Municipal Office, Masbate, Masbate, 62 we denied a similar petition for
exemption and/or exclusion, by according respect to the CAs factual findings and its reliance on the
findings of the DAR and the OP that
the subject parcels of land were not directly, actually, and exclusively used for pasture. 63
Petitioners admission that, since 2001, it leased another ranch for its own livestock is fatal to its
cause.64 While petitioner advances a defense that it leased this ranch because the occupants of the
subject property harmed its cattle, like the CA, we find it surprising that not even a single police
and/or barangay report was filed by petitioner to amplify its indignation over these alleged illegal
acts. Moreover, we accord respect to the CAs keen observation that the assailed MARO reports and
the Investigating Teams Report do not actually contradict one another, finding that the 43 cows,
while owned by petitioner, were actually pastured outside the subject property.
Finally, it is established that issues of Exclusion and/or Exemption are characterized as Agrarian Law
Implementation (ALI) cases which are well within the DAR Secretarys competence and
jurisdiction.65 Section 3, Rule II of the 2003 Department of Agrarian Reform Adjudication Board Rules
of Procedure provides:
Section 3. Agrarian Law Implementation Cases.
The Adjudicator or the Board shall have no jurisdiction over matters involving the administrative
implementation of RA No. 6657, otherwise known as the Comprehensive Agrarian Reform Law
(CARL) of 1988 and other agrarian laws as enunciated by pertinent rules and administrative orders,
which shall be under the exclusive prerogative of and cognizable by the Office of the Secretary of
the DAR in accordance with his issuances, to wit:
xxxx
3.8 Exclusion from CARP coverage of agricultural land used for livestock, swine, and poultry raising.
Thus, we cannot, without going against the law, arbitrarily strip the DAR Secretary of his legal
mandate to exercise jurisdiction and authority over all ALI cases. To succumb to petitioners

contention that "when a land is declared exempt from the CARP on the ground that it is not
agricultural as of the time the CARL took effect, the use and disposition of that land is entirely and
forever beyond DARs jurisdiction" is dangerous, suggestive of self-regulation. Precisely, it is the
DAR Secretary who is vested with such jurisdiction and authority to exempt and/or exclude a
property from CARP coverage based on the factual circumstances of each case and in accordance
with law and applicable jurisprudence. In addition, albeit parenthetically, Secretary Villa had already
granted the conversion into residential and golf courses use of nearly one-half of the entire area
originally claimed as exempt from CARP coverage because it was allegedly devoted to livestock
production.
lawphil1

In sum, we find no reversible error in the assailed Amended Decision and Resolution of the CA
which would warrant the modification, much less the reversal, thereof.
WHEREFORE, the Petition is DENIED and the Court of Appeals Amended Decision dated October
4, 2006 and Resolution dated March 27, 2008 are AFFIRMED. No costs.
SO ORDERED.
ANTONIO EDUARDO B. NACHURA
Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
DIOSDADO M. PERALTA
Associate Justice

ROBERTO A. ABAD
Associate Justice

MARTIN S. VILLARAMA, JR.*

Associate Justice
ATT E S TATI O N
I attest that the conclusions in the above Decision had been reached in consultation before the case
was assigned to the writer of the opinion of the Courts Division.
ANTONIO T. CARPIO
Associate Justice
Chairperson, Second Division
C E R TI F I C ATI O N
Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson's Attestation, I
certify that the conclusions in the above Decision had been reached in consultation before the case
was assigned to the writer of the opinion of the Courts Division.
RENATO C. CORONA
Chief Justice

G.R. No. 183409

June 18, 2010

CHAMBER OF REAL ESTATE AND BUILDERS ASSOCIATIONS, INC. (CREBA), petitioner,

vs.
THE SECRETARY OF AGRARIAN REFORM, Respondent.
DECISION
PEREZ, J.:
This case is a Petition for Certiorari and Prohibition (with application for temporary restraining order
and/or writ of preliminary injunction) under Rule 65 of the 1997 Revised Rules of Civil Procedure,
filed by herein petitioner Chamber of Real Estate and Builders Associations, Inc. (CREBA) seeking
to nullify and prohibit the enforcement of Department of Agrarian Reform (DAR) Administrative Order
(AO) No. 01-02, as amended by DAR AO No. 05-07,1and DAR Memorandum No. 88,2 for having
been issued by the 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.
Petitioner 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. The Secretary of Agrarian Reform is named respondent as he is the duly
appointive head of the DAR whose administrative issuances are the subject of this petition.
The Antecedent Facts
The Secretary of Agrarian Reform issued, on 29 October 1997, DAR AO No. 07-97, 3 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 Local
Government Units (LGUs) into non-agricultural uses after 15 June 1988.
Subsequently, on 30 March 1999, the Secretary of Agrarian Reform issued DAR AO No. 0199,4 entitled "Revised Rules and Regulations on the Conversion of Agricultural Lands to Nonagricultural 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 Comprehensive Agrarian Reform Program (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. 66575 on 15 June 1988 pursuant to Section 206 of Republic Act No. 71607 and other
pertinent laws and regulations, and are to be converted to such uses.

On 28 February 2002, the Secretary of Agrarian Reform issued another Administrative Order, i.e.,
DAR AO No. 01-02, entitled "2002 Comprehensive Rules on Land Use Conversion," which further
amended DAR AO No. 07-97 and DAR AO No. 01-99, 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.
Thereafter, on 2 August 2007, the Secretary of Agrarian Reform amended certain provisions 8 of DAR
AO No. 01-02 by formulating DAR AO No. 05-07, particularly addressing land conversion in time of
exigencies and calamities.
To address the unabated conversion of prime agricultural lands for real estate development, the
Secretary of Agrarian Reform further issued Memorandum No. 88 on 15 April 2008, which
temporarily suspended the processing and approval of all land use conversion applications.
By reason thereof, petitioner claims that there is an actual slow down 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.
Hence, this petition.
The Issues
In its Memorandum, petitioner posits the following issues:
I.
WHETHER THE DAR SECRETARY HAS JURISDICTION OVER LANDS THAT HAVE BEEN
RECLASSIFIED AS RESIDENTIAL, COMMERCIAL, INDUSTRIAL, OR FOR OTHER NONAGRICULTURAL 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]
WHICH SEEK TO REGULATE RECLASSIFIED LANDS.
III.
WHETHER [DAR AO NO. 01-02, AS AMENDED] VIOLATE[S] THE LOCAL AUTONOMY OF LOCAL
GOVERNMENT UNITS.
IV.
WHETHER [DAR AO NO. 01-02, AS AMENDED] VIOLATE[S] THE DUE PROCESS AND EQUAL
PROTECTION CLAUSE[S] OF THE CONSTITUTION.
V.

WHETHER MEMORANDUM NO. 88 IS A VALID EXERCISE OF POLICE POWER.9

The subject of the submission that the DAR Secretary gravely abused his discretion is AO No. 0102, as amended, which states:
Section 3. Applicability of Rules. These guidelines shall apply to all applications for conversion,
from agricultural to non-agricultural uses or to another agricultural use, such as:
xxxx
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, x x x. [Emphasis supplied].
Petitioner holds that under Republic Act No. 6657 and Republic Act No. 8435, 10 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 of Agrarian Reform, however, 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, petitioner avows that the Secretary of Agrarian
Reform acted without jurisdiction as he 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,
otherwise, its validity or constitutionality may be questioned.
In the same breath, petitioner contends that DAR AO No. 01-02, as amended, was made in violation
of Section 6511of Republic Act 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. According to petitioner, there is nothing in Section 65 of Republic Act No. 6657 or in any
other provision of law that confers to the DAR the jurisdiction or authority to require that nonawarded lands or reclassified lands be submitted to its conversion authority. Thus, in issuing and
enforcing DAR AO No. 01-02, as amended, the Secretary of Agrarian Reform acted with grave
abuse of discretion amounting to lack or excess of jurisdiction.
Petitioner further asseverates that Section 2.19, 12 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 Republic Act No. 7160, because it was not provided therein that
reclassification by LGUs shall be subject to conversion procedures or requirements, or that the
DARs approval or clearance must be secured to effect reclassification. The said Section 2.19 of
DAR AO No. 01-02, as amended, also contravenes the constitutional mandate on local autonomy
under Section 25,13 Article II and Section 2,14 Article X of the 1987 Philippine Constitution.

Petitioner similarly 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. There is deprivation of
liberty and property without due process of law because under DAR AO No. 01-02, as amended,
lands that are not within DARs 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.
As its final argument, petitioner avows that DAR Memorandum No. 88 is not a valid exercise of
police power for it is the prerogative of the legislature and that it is unconstitutional because it
suspended the land use conversion without any basis.
The Courts Ruling
This petition must be dismissed.
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.15 In Heirs of Bertuldo Hinog v. Melicor,16citing People v. Cuaresma,17 this Court made the
following pronouncements:
This Court's original jurisdiction to issue writs of certiorari is not exclusive. It is shared by this Court
with Regional Trial Courts and with the Court of Appeals. This concurrence of jurisdiction is not,
however, to be taken as according to parties seeking any of the writs an absolute, unrestrained
freedom of choice of the court to which application therefor will be directed. There is after all a
hierarchy of courts. That hierarchy is determinative of the venue of appeals, and also serves as a
general determinant of the appropriate forum for petitions for the extraordinary writs. 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. A direct invocation of the Supreme Courts
original jurisdiction to issue these writs should be allowed only when there are special and important
reasons therefor, clearly and specifically set out in the petition. This is [an] established policy. It is a
policy necessary to prevent inordinate demands upon the Courts time and attention which are better
devoted to those matters within its exclusive jurisdiction, and to prevent further over-crowding of the
Courts docket.18 (Emphasis supplied.)
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.19
This Court thus reaffirms the judicial policy that it will not entertain direct resort to it unless the
redress desired cannot be obtained in the appropriate courts, and exceptional and compelling
circumstances, such as cases of national interest and of serious implications, justify the availment of
the extraordinary remedy of writ of certiorari, calling for the exercise of its primary jurisdiction. 20

Exceptional and compelling circumstances were held present in the following cases: (a) Chavez v.
Romulo,21 on citizens right to bear arms; (b) Government of [the] United States of America v. Hon.
Purganan,22 on bail in extradition proceedings; (c) Commission on Elections v. Judge QuijanoPadilla,23 on government contract involving modernization and computerization of voters registration
list; (d) Buklod ng Kawaning EIIB v. Hon. Sec. Zamora,24on status and existence of a public office;
and (e) Hon. Fortich v. Hon. Corona,25 on the so-called "Win-Win Resolution" of the Office of the
President which modified the approval of the conversion to agro-industrial area. 26
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, hereby failing to fulfill the conditions set forth in Heirs of Bertuldo Hinog
v. Melicor.27 The present petition should have been initially filed in the Court of Appeals in strict
observance of the doctrine on the hierarchy of courts. Failure to do so is sufficient cause for the
dismissal of this petition.
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. 28 Section 5, Article VIII of the
1987 Philippine Constitution provides:
Sec. 5. The Supreme Court shall have the following powers:
(1) Exercise original jurisdiction over cases affecting ambassadors, other public ministers
and consuls, and over petitions for certiorari, prohibition, mandamus, quo warranto, and
habeas corpus.
(2) Review, revise, reverse, modify, or affirm on appeal or certiorari as the law or the Rules of
Court may provide, final judgments and orders of lower courts in:
(a) All cases in which the constitutionality or validity of any treaty, international or
executive agreement, law, presidential decree, proclamation, order, instruction,
ordinance, or regulation is in question. (Emphasis supplied.)
With that, this Petition must necessarily fail because this Court does not have original jurisdiction
over a Petition for Declaratory Relief even if only questions of law are involved.
Even if the petitioner has properly observed the doctrine of judicial hierarchy, this Petition is still
dismissible.
The special civil action for certiorari is intended for the correction of errors of jurisdiction only or
grave abuse of discretion amounting to lack or excess of jurisdiction. Its principal office is only to
keep the inferior court within the parameters of its jurisdiction or to prevent it from committing such a
grave abuse of discretion amounting to lack or excess of jurisdiction. 29
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.30
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.31 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.32Grave 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.33
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 in
issuing the assailed DAR AO No. 01-02, as amended, as well as Memorandum No. 88 did so in
accordance with his mandate to implement the land use conversion provisions of Republic Act No.
6657. In the process, he neither acted in any judicial or quasi-judicial capacity nor assumed unto
himself any performance of judicial or quasi-judicial prerogative. A Petition for Certiorari is a special
civil action that may be invoked only against a tribunal, board, or officer exercising judicial functions.
Section 1, Rule 65 of the 1997 Revised Rules of Civil Procedure is explicit on this matter, viz.:
SECTION 1. Petition for certiorari. When any tribunal, board or officer exercising judicial or quasijudicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of
discretion amounting to lack or excess of jurisdiction, and there is no appeal, nor any plain, speedy,
and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified
petition in the proper court, alleging the facts with certainty and praying that judgment must be
rendered annulling or modifying the proceedings of such tribunal, board or officer.
1avvphi1

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 x x x 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."34
Before a tribunal, board, or officer may exercise judicial or quasi-judicial acts, it is necessary that
there be a law that gives rise to some specific rights of persons or property under which adverse
claims to such rights are made, and the controversy ensuing therefrom is brought before a tribunal,
board, or officer clothed with power and authority to determine the law and adjudicate the respective
rights of the contending parties.35
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 DAR AO No. 01-02, as amended, and Memorandum No. 88 were
done in the exercise of his quasi-legislative and administrative functions and not of judicial or quasijudicial functions. In issuing the aforesaid administrative issuances, the Secretary of Agrarian Reform

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 DAR AO No. 01-02, as amended, and Memorandum No. 88 for
he never exercised any judicial or quasi-judicial functions but merely his quasi-legislative and
administrative functions.
Furthermore, as this Court has previously discussed, the instant petition in essence 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. Thus, the adequate and proper remedy for the petitioner
therefor is to file a Petition for Declaratory Relief, which this Court has only appellate and not original
jurisdiction. It is beyond the province of certiorari to declare the aforesaid administrative issuances
unconstitutional and illegal because certiorari is confined only to the determination of the existence
of grave abuse of discretion amounting to lack or excess of jurisdiction. Petitioner cannot simply
allege grave abuse of discretion amounting to lack or excess of jurisdiction and then invoke certiorari
to declare the aforesaid administrative issuances unconstitutional and illegal. Emphasis must be
given to the fact that the writ of certiorari dealt with in Rule 65 of the 1997 Revised Rules of Civil
Procedure is a prerogative writ, never demandable as a matter of right, "never issued except in the
exercise of judicial discretion."36
At any rate, even if the Court will set aside procedural infirmities, the instant petition should still be
dismissed.
Executive Order No. 129-A37 vested upon the DAR the responsibility of implementing the CARP.
Pursuant to the said mandate and to ensure the successful implementation of 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. Similarly, 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. Section 7 of
the aforesaid executive order clearly provides that "the authority and responsibility for the exercise of
the mandate of the [DAR] and the discharge of its powers and functions shall be vested in the
Secretary of Agrarian Reform x x x."
Under DAR AO No. 01-02, as amended, "lands not reclassified as residential, commercial, industrial
or other non-agricultural uses before 15 June 1988" have been included in the definition of
agricultural lands. In so doing, 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.
More so, Department of Justice Opinion No. 44, Series of 1990, which Opinion has been recognized
in many cases decided by this Court, clarified that after the effectivity of Republic Act No. 6657 on 15
June 1988 the DAR has been given the authority to approve land conversion. 38 Concomitant to such
authority, therefore, is the authority to include in the definition of agricultural lands "lands not

reclassified as residential, commercial, industrial or other non-agricultural uses before 15 June 1988"
for purposes of land use conversion.
In the same vein, 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,39 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. 40 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.41 It necessarily follows that any reclassification made thereafter can be the
subject of DARs conversion authority. Having recognized the DARs 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. Such inclusion does not unduly expand or enlarge the definition of agricultural
lands; instead, it made clear what are the lands that can be the subject of DARs conversion
authority, thus, serving the very purpose of the land use conversion provisions of Republic Act No.
6657.
The argument of the petitioner that DAR AO No. 01-02, as amended, was made in violation of
Section 65 of Republic Act No. 6657, as it covers even those non-awarded lands and reclassified
lands by the LGUs or by way of Presidential Proclamations on or after 15 June 1988 is specious. As
explained in Department of Justice Opinion No. 44, series of 1990, it is true that the DARs 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. It should logically follow, therefore, from the said departments express
duty and function to execute and enforce the said statute that any reclassification of a private land as
a residential, commercial or industrial property, on or after the effectivity of Republic Act No. 6657 on
15 June 1988 should first be cleared by the DAR.42
This Court held in Alarcon v. Court of Appeals43 that reclassification of lands does not suffice.
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. 44
It is clear from the aforesaid distinction between reclassification and conversion 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 DARs conversion authority can only be
exercised after the effectivity of Republic Act No. 6657 on 15 June 1988. 45 The said date served as
the cut-off period for automatic reclassification or rezoning of agricultural lands that no longer require
any DAR conversion clearance or authority.46Thereafter, reclassification of agricultural lands is
already subject to DARs conversion authority. Reclassification alone will not suffice to use the
agricultural lands for other purposes. Conversion is needed to change the current use of reclassified
agricultural lands.
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. As explained in DAR Memorandum Circular No. 7,
Series of 1994, cited in the 2009 case of Roxas & Company, Inc. v. DAMBA-NFSW and the
Department of Agrarian Reform,47 reclassification of lands denotes their allocation into some specific
use and providing for the manner of their utilization and disposition or the act of specifying how
agricultural lands shall be utilized for non-agricultural uses such as residential, industrial, or
commercial, as embodied in the land use plan. For reclassified agricultural lands, therefore, to be
used for the purpose to which they are intended there is still a need to change the current use
thereof through the process of conversion. The authority to do so is vested in the DAR, which is
mandated to preserve and maintain agricultural lands with increased productivity. Thus,
notwithstanding the reclassification of agricultural lands to non-agricultural uses, they must still
undergo conversion before they can be used 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. We reiterate that
reclassification is different from conversion. Reclassification alone will not suffice and does not
automatically allow the landowner to change its use. It must still undergo conversion process before
the landowner can use such agricultural lands for such purpose. 48Reclassification 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. Stated
differently, despite having reclassified into school sites, the landowner of such reclassified
agricultural lands must apply for conversion before the DAR in order to use the same for the said
purpose.
Any reclassification, therefore, of agricultural lands to residential, commercial, industrial or other nonagricultural 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. As held in Republic v. Estonilo,49 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.50 More so, public agricultural lands already reserved for
public use or purpose no longer form part of the alienable and disposable lands of the public domain
suitable for agriculture.51 Hence, they are outside the coverage of the CARP and it logically follows
that they are also beyond the conversion authority of the DAR.
Clearly from the foregoing, the Secretary of Agrarian Reform did not act without jurisdiction or in
excess of jurisdiction or with grave abuse of discretion amounting to lack or excess of jurisdiction in
(1) including lands not reclassified as residential, commercial, industrial or other non-agricultural
uses before 15 June 1988 in the definition of agricultural lands under DAR AO No. 01-02, as
amended, and; (2) issuing and enforcing DAR AO No. 01-02, as amended, subjecting to DARs
jurisdiction for conversion lands which had already been reclassified as residential, commercial,
industrial or for other non-agricultural uses on or after 15 June 1988.
Similarly, DAR AO No. 01-02, as amended, providing that the reclassification of agricultural lands by
LGUs shall be subject to the requirements of land use conversion procedure or that DARs approval
or clearance must be secured to effect reclassification, did not violate the autonomy of the LGUs.
Section 20 of Republic Act No. 7160 states that:
SECTION 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:
xxxx
(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.
xxxx
(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 agricultural lands is
not absolute. The authority of the DAR to approve conversion of agricultural lands covered by
Republic Act No. 6657 to non-agricultural uses has been validly recognized by said Section 20 of
Republic Act No. 7160 by explicitly providing therein that, "nothing in this section shall be construed
as repealing or modifying in any manner the provisions of Republic Act No. 6657."

DAR AO No. 01-02, as amended, does not also violate the due process clause, as well as the equal
protection clause of the Constitution. In providing administrative and criminal penalties in the said
administrative order, the Secretary of Agrarian Reform simply implements the provisions of Sections
73 and 74 of Republic Act No. 6657, thus:
Sec. 73. Prohibited Acts and Omissions. The following are prohibited:
xxxx
(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;
xxxx
(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.
xxxx
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. x x x.
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.
Contrary to petitioners assertions, 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

DARs jurisdiction, i.e., "lands not reclassified as residential, commercial, industrial or for other nonagricultural uses before 15 June 1998."
The petitioners argument that DAR Memorandum No. 88 is unconstitutional, as it suspends the land
use conversion without any basis, stands on hollow ground.
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, thus, it cannot be argued that it was made without any basis.
WHEREFORE, premises considered, the instant Petition for Certiorari is DISMISSED. Costs against
petitioner.
SO ORDERED.
JOSE PORTUGAL PEREZ
Associate Justice