CAT Realty Corporation v. Department of Agrarian Reform
REITERATIONFacts
The Antecedents: Central Azucarera de Tarlac (predecessor of CAT Realty Corporation) sought conversion of 23 parcels of agricultural land (386.7992 hectares) in Bayambang, Pangasinan, for residential, commercial, industrial, and urban purposes. Then DAR Secretary Conrado Estrella issued an Order dated September 4, 1975, granting the conversion, subject to conditions including payment of disturbance compensation, allocation of homelots, and priority in employment for tenants. Procedural History: On December 15, 2004, private respondents (CARET, ACCORD, et al.) filed a petition for revocation of the Conversion Order, alleging failure to develop and continued agricultural use. DAR Secretary Nasser Pangandaman initially granted this, partially revoking the order on August 2, 2006. CAT Realty moved for reconsideration, and the DAR Secretary reinstated the Conversion Order on October 11, 2006, finding compliance with disturbance compensation and no specified development period. Private respondents moved for reconsideration, which was granted, reinstating the partial revocation on September 6, 2007. CAT Realty's subsequent motion for reconsideration was denied on August 15, 2008. CAT Realty appealed to the Court of Appeals (CA), which affirmed the DAR Secretary's order on June 19, 2012, and denied reconsideration on July 31, 2013. The Petition: CAT Realty filed a petition for review on certiorari with the Supreme Court, assailing the CA's decision and resolution, and seeking to reinstate the original Conversion Order.
Issue(s)
Whether the Court of Appeals erred in sustaining the Department of Agrarian Reform's partial revocation of the Conversion Order. Whether the undeveloped areas of the subject property can be subjected to agrarian reform coverage.
Ruling
The petition is GRANTED. The assailed Decision dated June 19, 2012, and Resolution dated July 31, 2013, of the Court of Appeals are REVERSED and SET ASIDE. The Order dated September 4, 1975, of the Secretary of the Department of Agrarian Reform is REINSTATED.
Ratio Decidendi
On the issue of whether the Court of Appeals erred in sustaining the Department of Agrarian Reform's partial revocation of the Conversion Order: The Supreme Court found merit in the petition. It held that the Conversion Order dated September 4, 1975, had long attained finality. Citing Berboso v. Court of Appeals, the Court reiterated that once a land conversion order becomes final and executory, it can no longer be questioned, modified, or reversed. The private respondents' petition for revocation, filed on December 15, 2004, was filed almost thirty (30) years after the issuance of the Conversion Order, clearly violating the prescriptive period for filing such petitions, which is generally within ninety (90) days from discovery of facts warranting revocation but not more than one (1) year from issuance of the order. Therefore, the private respondents were barred by estoppel from assailing the order. On the issue of whether the undeveloped areas of the subject property can be subjected to agrarian reform coverage: The Court ruled that the subject property cannot be subjected to agrarian reform coverage. The Conversion Order dated September 4, 1975, declared the land suitable for non-agricultural purposes, and this declaration was made prior to the effectivity of Republic Act No. 6657 (Comprehensive Agrarian Reform Law or CARL) on June 15, 1988. Citing Hermosa v. Court of Appeals and Natalia Realty, Inc. v. Department of Agrarian Reform, the Court held that lands not devoted to agricultural activity or those previously converted to non-agricultural uses before June 15, 1988, are outside the coverage of CARL. The DAR is bound by such conversion. Furthermore, the Court found that CAT Realty had substantially complied with the conditions of the Conversion Order, including the payment of disturbance compensation. The prevailing law at the time, RA 6389, did not impose a specific period for the landowner to develop the property, and the Conversion Order itself did not stipulate one. The continued cultivation of untenanted portions by tenants was permissible until development occurred, as stated in the order.
Main Doctrine
A land conversion order issued under RA 3844, as amended by RA 6389, which has attained finality and whose conditions have been complied with, cannot be revoked or subjected to agrarian reform coverage, especially if the conversion was declared prior to the effectivity of RA 6657 (CARL).