Republic of the Philippines

DEPARTMENT OF AGRARIAN REFORM

Elliptical Road, Diliman, Quezon City

IN RE: PETITION FOR REVOCATION

OF CONVERSION ORDER DATED
AUGUST 14, 1996 INVOLVING
450.0000 HECTARES OF LAND
LOCATED POBLACION II, IMUS CAVITE
(SAMAIC) represented by its Chairman,
RC LOPEZ
Petitioner,

SMC CORPORATION, represented by

its President, JM MARQUEZ,
Respondent.

x-------------------------------------------------------x

DECISION

Comes now this Honorable Office ruling on the matter initiated in a petition by Samahan ng
Nagkakaisang Magsasaka sa Imus Cavite (SAMAIC) against respondent, SMC Corporation, represented
by its President, JM Marquez.

The facts of the case are undisputed as follows:

1. On 10 August 1995, respondent SMC Corporation filed an application for Land Use Conversion,
under R.A. 6657, otherwise known as the Comprehensive Agrarian Reform Law (CARL) on its real
properties which is the subject of the dispute. The subject land properties, totaling 450.0000
hectares are described as follows:
Lot No. Landowner OCT/TCT No. Area per Title Area Applied for
(has.) Conversion
1 SMC Corp. 240197 8.7763 8.7763
2 SMC Corp. 258719 149.7733 149.7733
3 SMC Corp. 236741 1,594.2008 291.4504
Total 450.0000

2. The conversion of the subject property was approved on 14 August 1996 by then DAR Secretary
Ernesto Garilao under DARCO Conversion Order No. 123-456-7890, Series of 1996.
3. After the issuance of the DARCO Conversion Order, petitioner states that the subject properties
were merely transferred to three (3) other corporations in a sequence of cessions, sales and
dacion en pago. Petitioner alleges that recipients of the subject properties are actually owned
 by SMC Corporation and that the acts of transferring subject properties were for purposes of
exempting the same from CARP coverage.
4. For their part, respondents SMC Corporation alleges three (3) arguments:

4.1 The Petition is barred by prescription due to the fact that DAR A.O. No. 1, Series of 2002
expressly states that a petition for revocation or cancellation of conversion order must be
filed within 90 days from the time of the discovery of the facts warranting revocation, but
not more than one (1) year from issuance thereof.
4.2 The DAR Conversion dated 14 August 1996 has long become final and executory by
operation of law. Hence, the same is already immutable, unalterable and can no longer be
modified in whatever respect.
4.3 DAR Conversion Order dated 14 August 1996 can no longer be revoked considering that
development projects have already been undertaken on the converted lands.
4.4 The subject properties can no longer be placed under CARP coverage considering that the
authority of the DAR to issue notice of coverage has already expired.
5. In sum, respondent maintains that the subject properties cannot come within the ambit of the
petition since petitioners have slept on their rights in questioning the conversion order and that
the subject properties shall likewise cannot be reverted under the coverage of the
Comprehensive Agrarian Reform Program.
6. This Honorable Office shall then adjudicate the matter based on the merits of the case.

I.

Respondent’s Arguments on prescription does not hold water

With due respect to the respondent, this Honorable Office shall point out the errors that they have
raised in their Comment/Opposition that they have filed against the petitioners.

A. Anent the matter on the bar by prescription as per DAR A.O. No. 1, Series of 2002.

Respondents are correct in stating that there is a bar by prescription as provided by DAR A.O.
No. 1, Series of 2002. The relevant provisions in the A.O. are written viz:

Section 46. Filing of Petition – any person may file a petition to

revoke, and the landowner may file a petition to withdraw, the
Conversion Order before the approving authority within ninety (90)
days from discovery of facts warranting revocation or withdrawal,
but not more than one (1) year from issuance of the Conversion
Order. When the petitioner alleges any of the grounds in the
enumeration in the next section, the filing period shall be within
ninety (90) days from discovery of such facts but not beyond the
development period stipulated in the Conversion Order. Within the
 DAR, only the Secretary may resolve petitions that question the
jurisdiction of the recommending body or approving authority.

Section 47. Grounds – The following acts or omissions shall warrant

revocation of the Conversion Order.

47.1 Lack of jurisdiction of the approving authority;

47.2 Misrepresentation or concealment of facts material to the
grant of conversion;
47.3 Non-compliance with the conditions of the Conversion Order;
47.4 Non-compliance with the agreement on disturbance
compensation payment;
47.5 Conversion to a use other than that authorized in the
Conversion Order; or
47.6 Any other serious violation of agrarian laws.

Respondent harps on the undisputed fact that SAMAIC filed their petition on 30 June 2014,
which they claim is almost more than eighteen (18) years from the issuance of the Conversion
Order dated last 14 August 1996. However, respondent failed to acknowledge a subsequent
amendment dated 7 August 2009 of R.A. 6657 (CARL), made by R.A. 9700. Thus, Section 65 of
CARL now provides:

SEC. 65. Conversion of Lands. - After the lapse of five (5) years
from its award, when the land ceases 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, the DAR, upon
application of the beneficiary or the landowner with respect only
to his/her retained area which is tenanted, with due notice to the
affected parties, and subject to existing laws, may authorize the
reclassification or conversion of the land and its disposition:
Provided, That if the applicant is a beneficiary under agrarian laws
and the land sought to be converted is the land awarded to
him/her or any portion thereof, the applicant, after the conversion
is granted, shall invest at least ten percent (10%)of the proceeds
coming from the conversion in government securities: Provided,
further, That the applicant upon conversion shall fully pay the price
of the land: Provided, furthermore, That irrigated and irrigable
lands, shall not be subject to conversion: Provided, finally, That the
National Irrigation Administration shall submit a consolidated data
on the location nationwide of all irrigable lands within one (1) year
from the effectivity of this Act.
 "Failure to implement the conversion plan within five (5) years
from the approval of such conversion plan or any violation of the
conditions of the conversion order due to the fault of the
applicant shall cause the land to automatically be covered by
CARP (emphasis supplied).

It is elementary in statutory construction that later statutes encapsulate more accurately the
will of the legislature. Assuming arguendo that petitioner did in fact slept on their rights anent
questioning the conversion made on the subject properties, R.A. 9700 provides them the
springboard from which they can still proceed with their queries.

It is to be noted that the conversion dated 14 August 1996 specifies the following conditions:

1. The approval of the application for conversion shall in no way amend, diminish or alter the
undertaking and obligations of SMC Corporation as contained in the Stock Distribution Plan
approved on 21 November 1989;
2. The benefits, wages and the like, presently received by the farm-worker beneficiaries
(FWBs) shall not in any way be reduced or adversely affected. Three percent of the gross
selling price of the sale of the converted land shall be awarded to the beneficiaries of the
Stock Distribution Option (SDO);
3. Posting of Notice of Approved Order of Conversion in most conspicuous place of the project
area using appropriate material with minimum size of one (1) meter by two (2) meters.
4. The development of the land should be completed within the period of five (5) years
(emphasis supplied), from the issuance of this Order; and
5. The DAR reserves the right to withdraw or cancel this order in the event of
misrepresentation of facts integral to the issuance of this order and for violation of the rules
and regulations on land use conversion.

Respondent has not complied with the abovementioned conditions of the conversion
order/plan. What it did was to merely transfer the subject properties to three different
corporations, who are in essence successors-in-interest, but have also failed in complying with
the above provisions.

Also, as per R.A. 9700, Section 73 of the CARL is likewise amended:

"SEC. 73. Prohibited Acts and Omissions. - The following are prohibited:

xxxx
 "(c) Any conversion by, any landowner of his/her agricultural' land into any non-agricultural
use with intent to avoid the application of this Act to his/her landholdings and to dispossess
his/her bona fide tenant farmers (emphasis supplied):

Respondent’s act of transferring subject properties must not be in such a way to curtail or to go
around the provisions of the CARL. If petitioners’ allegations were in fact proven and the
transfers were indeed made to other Corporations that the respondent in fact owns then the
latter must be made to pay the consequences of their actions.

II.

Respondent must stay true on the Conversion Order lest subject properties shall once more be
covered under CARP

Regarding their contestation on the DAR Conversion Order Dated 14 August 1996, the respondent is
correct in their argument.

B. Anent the immutability and unalterability of the DAR Conversion Order

Respondent is astute in raising the case of Villonte vs. Aplaya Laiya Corp.1 ruled by the Supreme
Court. At this juncture, it is beneficial to raise the ruling in said case regarding DAR Conversion
Orders stated below:

Indubitably, the Conversion Order of the DAR was a final order,

because it resolved the issue of whether the subject property may
be converted to non-agricultural use. The finality of such
Conversion Order is not dependent upon the subsequent
determination, either by agreement of the parties or by the DAR,
of the compensation due to the tenants/occupants of the
property caused by its conversion to non-agricultural use. Once
final and executory, the Conversion Order can no longer be
questioned2 (emphasis supplied).

Section 1, Rule 43 of the Rules of Court provides that final orders of

quasi-judicial bodies in the exercise of their quasi-judicial functions,
including the DAR under Republic Act No. 6657, may be appealed to
the CA via a petition for review. Under Section 4 of the Rule, the
petition should be filed within 15 days from notice of the said final
order or from the date of its last publication, if publication is
required by law for its effectivity, or of the denial of the petitioners

1
G.R. No. 145013 31 March 2005
2
National Housing Authority v. Heirs of Isidro Guivelondo, G.R. No. 154411, 19 June 2003
 motion for reconsideration duly filed in accordance with the
governing law of the court or agency a quo.

Since the DAR Conversion Order Dated 14 August 1996 is indeed a final order, there remains
nothing for the respondents to do but to comply with said order and follow the conditions
stated therein. However, it is clear that in light of respondent’s actuations in merely transferring
the subject properties in the name of other Corporations, it is clear as day that they did not
follow the tenor of the DAR Conversion Order.

This Honorable Office reiterates that the contested DAR Conversion Order is final and executory.
As would be discussed more aptly in the following sections, respondent has failed to adhere and
comply with said order. Hence, due to respondent’s own fault, subject properties would be
reverted and would be automatically covered by CARP3.

III.
The DAR Conversion Order can be revoked in light of the minimal and protracted development
on two of the three subject properties

Respondent relies heavily on the technicality of the finality of the DAR Conversion Order that in a way,
it slept on its rights due to the delays in developing subject properties.

C. Anent the development of subject properties

This Honorable Office took it upon itself to conduct an ocular inspection and investigation of the
450.0000 hectare subject property last 14 December 2015 through the efforts of the Bureau of
Agrarian Legal Assistance (BALA) Monitoring Team.

As stated, there were three (3) lots that were subject to conversion that were owned
respectively by JKL Corporation, DEFCO and XYZ Bank. Out of these lots, only DEFCO’s property
has undergone significant development with the construction of road networks, water facilities
and further developments introduced by Metro Solar Corporation.

As for the other properties owned by JKL Corporation and XYZ Bank, there has been no land
developments observed on these properties. Respondent is mistaken on relying too much on
the DAR Conversion Order dated 14 August 1996. The has been a significant time already that
have lapsed ever since the conversion totaling eighteen (18) years counting up to 2014.

A review of the relevant provision of CARL4 states that any development in line with the
conversion order must be performed in a span of five (5) years. The same period of time was in
fact stated in the said Conversion Order.

3
Amendments to Sec. 65 of R.A. 6657 as per R.A. 9700
4
Supra
 Further, respondent cannot merely rely on the separate opinions of Justice Brion and Justice
Sereno in the Hacienda Luisita Case5 that it has cited on its comment/opposition. Doing so
would be beside the point. As stated by the Honorable Justices in their opinions, there have
been significant developments already on the converted lands that have rendered the
properties in the Hacienda Luisita Case no longer economically feasible to serve any agricultural
purpose.

Once more, in light of the protracted development done by respondent in the case at bar, the
DAR Conversion Order can be reverted in order for the FWBs to still salvage parts of the subject
properties, specifically Lots 1 and 3, that have been merely transferred to JFK Corporation and
XYZ Bank sans the required development that has been repeatedly stated by both the
amendments introduced by R.A. 9700 and the DAR Conversion Order.

IV.

The Subject Properties can still be placed under CARP Coverage

Lastly, this Honorable Office will rule on the matter concerning on whether or not, the subject
properties can still be placed under CARP Coverage.

D. Anent respondent’s argument that DAR’s Authority to issue Notice of Coverage (NOC) has
already expired.

Respondent is correct in citing Section 7 of R.A. 9700 which provides that the DAR can only issue
NOCs until 30 June 2014. However, respondent have missed the point that the same law in fact
provides that (and we reiterate as per amendments introduced by R.A. 9700):

"Failure to implement the conversion plan within five (5) years

from the approval of such conversion plan or any violation of the
conditions of the conversion order due to the fault of the
applicant shall cause the land to automatically be covered by
CARP (emphasis supplied).

By mere operation of law, due to the fact that there has been no implementation of the
conversion plan, subject property shall in effect be once more covered by the CARP. Again, this
Honorable Office reiterates that respondent has failed to comply with the Conversion Order and
took its time in implementing marginal developments on the subject properties. Due to this
delay, the respondent must be made to suffer the consequences and not be allowed to deprive
the FWBs of their rights to till and benefit from the subject properties—a right that is still
provided for them amply by the CARP.

5
G.R. No. 171101, 5 July 2011