G.R. No. 204232, October 16, 2019
THE LOCAL GOVERNMENT OF STA. CRUZ, DAVAO DEL SUR, AS REPRESENTED BY ITS MUNICIPAL MAYOR, ATTY. JOEL RAY L. LOPEZ, PETITIONER, V. PROVINCIAL OFFICE OF THE DEPARTMENT OF AGRARIAN REFORM, DIGOS CITY, DAVAO DEL SUR, RESPONDENT.

FACTS

The Local Government Unit (LGU) of Sta. Cruz, Davao del Sur, filed a Petition for Injunction with Application for Permanent Restraining Order directly with the Supreme Court against the Provincial Office of the Department of Agrarian Reform (DAR) in Digos City. The petition sought to prevent the DAR from placing the Tan Kim Kee Estate under the coverage of the Comprehensive Agrarian Reform Program (CARP). The subject property had been designated as an industrial park by the LGU’s land use plan and zoning ordinance in 1991. In 1994, the landowners, Braulio A. Lim, et al., filed an application for conversion of the land for commercial/industrial uses, which the DAR approved with the condition that the conversion plan be implemented within five years. This period was later extended for a non-extendible two years. Before this period lapsed, the landowners filed an application for exclusion from CARP coverage, claiming the land was used for cattle raising. In 2012, the DAR, finding the conversion condition unfulfilled, issued Notices of Coverage to place the land under CARP. Subsequently, in 2013, the DAR denied the application for exclusion.

ISSUE

1. Whether the Supreme Court has jurisdiction over the petition filed directly by the LGU of Sta. Cruz.
2. Whether the LGU of Sta. Cruz is the real party-in-interest in filing the petition.
3. Whether agricultural lands reclassified by an LGU after June 15, 1988, are automatically excluded from CARP coverage without undergoing DAR conversion.

RULING

1. The Supreme Court does not have jurisdiction over the petition. Under Section 54 of the Comprehensive Agrarian Reform Law (R.A. 6657), decisions, orders, awards, or rulings of the DAR pertaining to agrarian disputes or the application of agrarian reform laws must be brought to the Court of Appeals via a petition for certiorari. The petitioner resorted to an improper remedy by filing directly with the Supreme Court. Furthermore, the doctrine of hierarchy of courts precludes the Supreme Court from taking cognizance of the petition absent special and important reasons, which were not present.
2. The LGU of Sta. Cruz is not the real party-in-interest. The subject property is owned by private landowners, Braulio A. Lim, et al., and not by the petitioner LGU. A real party-in-interest is one who would be benefited or injured by the judgment and has a present substantial interest. The LGU’s interest—that the area be converted for future industrial benefit—constitutes a mere expectancy or future contingent interest, not a present substantial interest. The lack of a real party-in-interest warrants the dismissal of the petition.
3. No. Agricultural lands reclassified by an LGU after the effectivity of R.A. 6657 on June 15, 1988, are not automatically excluded from CARP coverage. They must undergo the DAR conversion process. The power of LGUs to reclassify agricultural lands under the Local Government Code of 1991 (R.A. 7160) is not absolute and does not repeal the provisions of the CARL. Reclassification alone does not allow a change in land use; conversion approval from the DAR is still required. The cut-off date for automatic reclassification (without need for DAR conversion) is June 15, 1988. Since the LGU of Sta. Cruz reclassified the subject property in 1991 (after the cut-off), DAR conversion was necessary. The DAR’s 1994 conversion approval was conditional, and the failure to comply with the condition (implementation within the prescribed period) rightfully led to the land being placed under CARP coverage.