3. NATALIA REALTY, INC. VS. DEPARTMENT OF AGRARIAN REFORM On 18 April 1979, Presidential Proclamation No.

April 1979, Presidential Proclamation No. 1637 set aside 20,312 hectares of land located
in the Municipalities of Antipolo, San Mateo and Montalban as townsite areas to absorb the
225 SCRA 278, G.R. No. 103302 August 12, 1993 population overspill in the metropolis which were designated as the Lungsod Silangan Townsite.
The NATALIA properties are situated within the areas proclaimed as townsite reservation.
NATALIA REALTY, INC., and ESTATE DEVELOPERS AND INVESTORS CORP.,
petitioners, vs. DEPARTMENT OF AGRARIAN REFORM, SEC. BENJAMIN T. LEONG and Since private landowners were allowed to develop their properties into low-cost housing
DIR. WILFREDO LEANO, DAR REGION IV, respondents. subdivisions within the reservation, petitioner Estate Developers and Investors Corporation
(EDIC, for brevity), as developer of NATALIA properties, applied for and was granted
Agrarian Reform Law; Coverage; Commercial, industrial and residential lands not included.—
preliminary approval and locational clearances by the Human Settlements Regulatory
We now determine whether such lands are covered by the CARL. Section 4 of R.A. 6657
Commission. The necessary permit for Phase I of the subdivision project, which consisted of
provides that the CARL shall “cover, regardless of tenurial arrangement and commodity
13.2371 hectares, was issued sometime in 1982;4 for Phase II, with an area of 80.0000 hectares,
produced, all public and private agricultural lands.” As to what constitutes “agricultural land,”
on 13 October 1983;5 and for
it is referred to as “land devoted to agricultural activity as defined in this Act and not classified
as mineral, forest, residential, commercial or industrial land.” The deliberations of the Phase III, which consisted of the remaining 31.7707 hectares, on 25 April 1986.6 Petitioners
Constitutional Commission confirm this limitation. “Agricultural lands” are only those lands were likewise issued development permits7 after complying with the requirements. Thus the
which are “arable and suitable agricultural lands” and “do not include commercial, industrial NATALIA properties later became the Antipolo Hills Subdivision.
and residential lands.” Based on the foregoing, it is clear that the undeveloped portions of the
Antipolo Hills Subdivision cannot in any language be considered as “agricultural lands.” These On 15 June 1988, R.A. 6657, otherwise known as the “Comprehensive Agrarian Reform Law
lots were intended for residential use. They ceased to be agricultural lands upon approval of of 1988” (CARL, for brevity), went into effect. Conformably therewith, respondent Department
their inclusion in the Lungsod Silangan Reservation. Even today, the areas in question continue of Agrarian Reform (DAR, for brevity), through its Municipal Agrarian Reform Officer, issued
to be developed as a low-cost housing subdivision, albeit at a snail’s pace. This can readily be on 22 November 1990 a Notice of Coverage on the undeveloped portions of the Antipolo Hills
gleaned from the fact that SAMBA members even instituted an action to restrain petitioners Subdivision which consisted of roughly 90.3307 hectares. NATALIA immediately registered
from continuing with such development. The enormity of the resources needed for developing its objection to the Notice of Coverage.
a subdivision may have delayed its completion but this does not detract from the fact that these
lands are still residential lands and outside the ambit of the CARL. EDIC also protested to respondent Director Wilfredo Leano of the DAR Region IV Office and
twice wrote him requesting the cancellation of the Notice of Coverage.
PETITION for certiorari to review the Notice of Coverage of the Department of Agrarian
Reform. On 17 January 1991, members of the Samahan ng Magsasaka sa Bundok Antipolo, Inc.
(SAMBA, for brevity), filed a complaint against NATALIA and EDIC before the DAR Regional
The facts are stated in the opinion of the Court. Adjudicator to restrain petitioners from developing areas under cultivation by SAMBA
members.8 The Regional Adjudicator temporarily restrained petitioners from proceeding with
Lino M. Patajo for petitioners. the development of the subdivision. Petitioners then moved to dismiss the complaint; it was
denied. Instead, the Regional Adjudicator issued on 5 March 1991 a Writ of Preliminary
The Solicitor General for respondents.
Injunction.
BELLOSILLO, J.:
Petitioners NATALIA and EDIC elevated their cause to the DAR Adjudication Board
Are lands already classified for residential, commercial or industrial use, as approved by the (DARAB); however, on 16 December 1991 the DARAB merely remanded the case to the
Housing and Land Use Regulatory Board and its precursor agencies1 prior to 15 June 1988,2 Regional Adjudicator for further proceedings.9
covered by R.A. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988?
In the interim, NATALIA wrote respondent Secretary of Agrarian Reform reiterating its request
This is the pivotal issue in this petition for certiorari assailing the Notice of Coverage3 of the
to set aside the Notice of Coverage. Neither respondent Secretary nor respondent Director took
Department of Agrarian Reform over parcels of land already reserved as townsite areas before
action on the protest-letters, thus compelling petitioners to institute this proceeding more than a
the enactment of the law.
year thereafter.

NATALIA and EDIC both impute grave abuse of discretion to respondent DAR for including
Petitioner Natalia Realty, Inc. (NATALIA, for brevity) is the owner of three (3) contiguous undeveloped portions of the Antipolo Hills Subdivision within the coverage of the CARL. They
parcels of land located in Banaba, Antipolo, Rizal, with areas of 120.9793 hectares, 1.3205 argue that NATALIA properties already ceased to be agricultural lands when they were included
hectares and 2.7080 hectares, or a total of 125.0078 hectares, and embraced in Transfer in the areas reserved by presidential fiat for townsite reservation.
Certificate of Title No. 31527 of the Register of Deeds of the Province of Rizal.
Public respondents through the Office of the Solicitor General dispute this contention. They as mineral, forest, residential, commercial or industrial land.”16 The deliberations of the
maintain that the permits granted petitioners were not valid and binding because they did not Constitutional Commission confirm this limitation. “Agricultural lands” are only those lands
comply with the implementing Standards, Rules and Regulations of P.D. 957, otherwise known which are “arable and suitable agricultural lands” and “do not include commercial, industrial
as “The Subdivision and Condominium Buyers’ Protective Decree,” in that no application for and residential lands.”17
conversion of the NATALIA lands from agricultural to residential was ever filed with the DAR.
In other words, there was no valid conversion. Moreover, public respondents allege that the Based on the foregoing, it is clear that the undeveloped portions of the Antipolo Hills
instant petition was prematurely filed because the case instituted by SAMBA against petitioners Subdivision cannot in any language be considered as “agricultural lands.” These lots were
before the DAR Regional Adjudicator has not yet terminated. Respondents conclude, as a intended for residential use. They ceased to be agricultural lands upon approval of their inclusion
consequence, that petitioners failed to fully exhaust administrative remedies available to them in the Lungsod Silangan Reservation. Even today, the areas in question continued to be
before coming to court. developed as a low-cost housing subdivision, albeit at a snail’s pace. This can readily be gleaned
from the fact that SAMBA members even instituted an action to restrain petitioners from
The petition is impressed with merit. A cursory reading of the Preliminary Approval and continuing with such development. The enormity of the resources needed for developing a
Locational Clearances as well as the Development Permits granted petitioners for Phases I, II subdivision may have delayed its completion but this does not detract from the fact that these
and III of the Antipolo Hills Subdivision reveals that contrary to the claim of public respondents, lands are still residential lands and outside the ambit of the CARL.
petitioners NATALIA and EDIC did in fact comply with all the requirements of law.
Indeed, lands not devoted to agricultural activity are outside the coverage of CARL. These
Petitioners first secured favorable recommendations from the Lungsod Silangan Development include lands previously converted to non-agricultural uses prior to the effectivity of CARL by
Corporation, the agency tasked to oversee the implementation of the development of the government agencies other than respondent DAR. In its Revised Rules and Regulations
townsite reservation, before applying for the necessary permits from the Human Settlements Governing Conversion of Private Agricultural Lands to Non-Agricultural Uses,18 DAR itself
Regulatory Commission.10 And, in all permits granted to petitioners, the Commission stated defined “agricultural land” thus—
invariably therein that the applications were in “conformance”11 or “conformity”12 or
“conforming”13 with the implementing Standards, Rules and Regulations of P.D. 957. Hence, “x x x Agricultural land refers to those devoted to agricultural activity as defined in R.A. 6657
the argument of public respondents that not all of the requirements were complied with cannot and not classified as mineral or forest by the Department of Environment and Natural Resources
be sustained. (DENR) and its predecessor agencies, and not classified in town plans and zoning ordinances
as approved by the Housing and Land Use Regulatory Board (HLURB) and its preceding
As a matter of fact, there was even no need for petitioners to secure a clearance or prior approval competent authorities prior to 15 June 1988 for residential, commercial or industrial use.”
from DAR. The NATALIA properties were within the areas set aside for the Lungsod Silangan
Reservation. Since Presidential Proclamation No. 1637 created the townsite reservation for the Since the NATALIA lands were converted prior to 15 June 1988, respondent DAR is bound by
purpose of providing additional housing to the burgeoning population of Metro Manila, it in such conversion. It was therefore error to include the undeveloped portions of the Antipolo Hills
effect converted for residential use what were erstwhile agricultural lands provided all requisites Subdivision within the coverage of CARL.
were met. And, in the case at bar, there was compliance with all relevant rules and requirements.
Be that as it may, the Secretary of Justice, responding to a query by the Secretary of Agrarian
Even in their applications for the development of the Antipolo Hills Subdivision, the
Reform, noted in an Opinion19 that lands covered by Presidential Proclamation No. 1637, inter
predecessor agency of HLURB noted that petitioners NATALIA and EDIC complied with all
alia, of which the NATALIA lands are part, having been reserved for townsite purposes “to be
the requirements prescribed by P.D. 957.
developed as human settlements by the proper land and housing agency,” are “not deemed
The implementing Standards, Rules and Regulations of P.D. 957 applied to all subdivisions and ‘agricultural lands’ within the meaning and intent of Section 3 (c) of R.A. No. 6657.” Not being
condominiums in general. On the other hand, Presidential Proclamation No. 1637 referred only deemed “agricultural lands,” they are outside the coverage of CARL.
to the Lungsod Silangan Reservation, which makes it a special law. It is a basic tenet in statutory
Anent the argument that there was failure to exhaust administrative remedies in the instant
construction that between a general law and a special law, the latter prevails.14
petition, suffice it to say that the issues raised in the case filed by SAMBA members differ from
Interestingly, the Office of the Solicitor General does not contest the conversion of portions of those of petitioners. The former involve possession; the latter, the propriety of including under
the Antipolo Hills Subdivision which have already been developed.15 Of course, this is contrary the operation of CARL lands already converted for residential use prior to its effectivity.
to its earlier position that there was no valid conversion. The applications for the developed and
Besides, petitioners were not supposed to wait until public respondents acted on their letter-
undeveloped portions of subject subdivision were similarly situated. Consequently, both did not
protests, this after sitting it out for almost a year. Given the official indifference, which under
need prior DAR approval.
the circumstances could have continued forever, petitioners had to act to assert and protect their
We now determine whether such lands are covered by the CARL. Section 4 of R.A. 6657 interests.20
provides that the CARL shall “cover, regardless of tenurial arrangement and commodity
produced, all public and private agricultural lands.” As to what constitutes “agricultural land,”
it is referred to as “land devoted to agricultural activity as defined in this Act and not classified
In fine, we rule for petitioners and hold that public respondents gravely abused their discretion
in issuing the assailed Notice of Coverage dated 22 November 1990 of land over which they no
longer have jurisdiction.

WHEREFORE, the Petition for Certiorari is GRANTED. The Notice of Coverage of 22

SO ORDERED.

Narvasa (C.J.), Cruz, Feliciano, Padilla, Bidin, Griño-Aquino, Regalado, Davide, Jr.,
Romero, Nocon, Melo, Quiason,

Puno and Vitug, JJ., concur.

Petition granted. Notice of Coverage set aside.

Note.—The classification of public lands is an exclusive prerogative of the Executive

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