Department of Agrarian Reform v. Sarangani Agricultural Co.
REITERATIONFacts
The Antecedents: Respondents, owners of extensive agricultural lands in Alabel, Sarangani, sought to reclassify these lands from agricultural to non-agricultural uses. This reclassification was part of the Municipality of Alabel's comprehensive land use plan and zoning ordinance, enacted to foster development and urbanization, particularly as Alabel was designated the provincial capital. A significant portion of these lands, totaling 376.5424 hectares, was initially covered by a commercial farm deferment scheme under the Comprehensive Agrarian Reform Law (CARL). Despite the reclassification, a portion of the land, specifically 154.622 hectares planted with bananas and coconuts, was identified as still viable for agriculture and was subject to a Notice of Coverage under CARP, which was opposed by local agrarian reform beneficiaries. Procedural History: The application for land use conversion by Sarangani Agricultural Company, Inc. (SACI) and other respondents was initially denied by the Department of Agrarian Reform (DAR) Secretary on November 9, 2000, citing non-compliance with documentary requirements and unresolved issues, particularly concerning the banana and coconut plantations. This denial was affirmed by the Office of the President on June 30, 2003, after dismissing the respondents' appeal. Subsequently, the respondents filed a petition for review with the Court of Appeals. On July 19, 2004, the Court of Appeals reversed the decisions of the DAR and the Office of the President, directing the DAR to issue a conversion order for the banana and coconut areas and to expedite the processing of the remaining conversion application. The DAR Secretary and his agents were enjoined from proceeding with the distribution of the lands under compulsory acquisition. The Petition: The Department of Agrarian Reform (DAR), as petitioner, seeks review under Rule 45 of the Rules of Court, challenging the Court of Appeals' decision. The DAR argues that the Court of Appeals erred in ruling that the June 16, 1998 Notice of Coverage was illegal due to a failure to observe due process, asserting that such a notice was not indispensable for placing the deferred commercial farms under CARP coverage upon expiration of the deferment period. Furthermore, the DAR contends that the Court of Appeals erred in prioritizing local government land use plans and ordinances over the basic provisions and mandates of CARP, particularly concerning the conversion of agricultural lands and the requirements for such conversion. The petition also questions the appellate court's failure to consider the basic provisions and principles of law governing land classification/conversion and the CARP mandate.
Issue(s)
Whether the June 16, 1998 Notice of Coverage was illegal for alleged failure to observe due process. Whether the Department of Agrarian Reform (DAR) should use the comprehensive land use plans and accompanying ordinances of the local Sanggunian as primary reference in assessing land use conversion applications. Whether the Supreme Court should consider the basic provisions and principles of law concerning land classification/conversion and the mandate of the Comprehensive Agrarian Reform Program (CARP).
Ruling
The petition is partly granted. The denial by the DAR of respondents' application for conversion with regard to the 154.622 hectares planted to bananas and coconuts, whose deferment period has expired, is AFFIRMED. The Orders of the DAR dated November 9, 2000 and August 28, 2002, directing the MARO of Alabel, Sarangani to proceed with the distribution of the banana and coconut areas subject of the June 16, 1998 Notice of Coverage, are REINSTATED. The Decision and Resolution of the Court of Appeals are modified accordingly.
Ratio Decidendi
On the issue of due process and the Notice of Coverage: The Court held that a notice of coverage is not an indispensable requirement before the DAR can acquire commercial farm lots covered by a deferment period under Republic Act No. 6657 (CARL). DAR Administrative Order No. 9, Series of 1998, specifically provides that upon the expiration of the deferment period, the Order of Deferment itself shall serve as the Notice of Coverage. Therefore, the respondents' contention that due process was not observed due to the absence of a separate notice of coverage must fail. The acquisition process for deferred commercial farms is outlined in DAR Administrative Order No. 9, Section 9(a)(1), which clarifies that the expired Order of Deferment functions as the Notice of Coverage. Consequently, the denial of the application for conversion concerning these specific lands is upheld. On the use of Comprehensive Land Use Plans (CLUPs) and Zoning Ordinances: The Court affirmed that DAR Administrative Order No. 7, Series of 1997, requires DAR to use CLUPs and zoning ordinances as primary references when assessing land use conversion applications, especially when lands have been reclassified by local government units (LGUs). Section 20 of Republic Act No. 7160 (Local Government Code of 1991) empowers LGUs to reclassify agricultural lands. However, the Court emphasized that this power is not absolute and must be exercised in conformity with existing laws, including R.A. No. 6657. The creation of the Province of Sarangani and the reclassification of lands by Alabel did not supersede the provisions of CARL. Therefore, while DAR should consider the LGU's plans, it must also ensure compliance with CARL's requirements, particularly for lands covered by deferment schemes. On the application of CARL and LGC provisions: The Court reiterated that Section 20(e) of the Local Government Code explicitly states that nothing therein shall be construed as repealing, amending, or modifying the provisions of R.A. No. 6657. This means that the mandate of CARL, especially concerning the acquisition and distribution of agricultural lands, remains paramount. The ten-year deferment period for commercial farms under Section 11 of CARL, which expired on June 15, 1998, subjected the lands to redistribution to CARP beneficiaries. The reclassification of these lands by the LGU did not negate this obligation. Therefore, the portion of the respondents' property that was planted with bananas and coconuts, and covered by the expired deferment scheme, remains subject to CARP coverage and distribution, notwithstanding the LGU's reclassification.
Main Doctrine
The creation of a new province and the reclassification of agricultural lands to non-agricultural uses by a local government unit do not supersede the provisions of the Comprehensive Agrarian Reform Law (CARL), particularly concerning commercial farms subject to a deferment period. A notice of coverage is not an indispensable requirement for the Department of Agrarian Reform (DAR) to acquire commercial farm lands whose deferment period has expired.