CASE FACTS
Natalia  Natalia Realty is the owner of 3 parcel of land in Antipolo, Rizal
Realty  1979 -PD 1637 - set aside land located in Antipolo as townsite
v. DAR areas to absorb the population overspill in the metropolis -
Lungsod Silangan Townsite. (18 April 1979)
 NATALIA properties within the areas proclaimed as townsite
reservation
 1982- EDIC, developer of NATALIA properties, was granted to
develop their properties into low-cost housing subdivision -
Antipolo Hills Subdivision.
 1988 - R.A. 6657 the "Comprehensive Agrarian Reform Law of
1988" went effect
(15 June 1988)
 DAR issued a Notice of Coverage on the undeveloped portion
of Antipolo Hills Subdivision
 NATALIA and EDIC protested to DAR
 1991 - Samahan ng Magsasaka sa Bundok Antipolo, Inc.
(SAMBA) filed a complaint against NATALIA and EDIC to
restrain petitioners from developing areas under cultivation by
SAMBA members
 NATALIA wrote to Sec. of DAR to set aside the Notice of
Coverage – but no avail of action from the Sec.
 NATALIA and EDIC both impute grave abuse of discretion to
respondent DAR >argued NATALIA properties already ceased to
be agricultural lands when they were included in the areas
reserved by PD 1637 for the townsite reservation.
 DAR, through OSG > maintains that permits granted were not
valid because they did not comply with the implementing
Standards, Rules and Regulations of P.D. 957, otherwise known
as "The Subdivision and Condominium Buyers Protective
Decree + no application for conversion of the NATALIA lands
from agricultural residential was ever filed with the DAR
o there was no valid conversion
Roxas  Roxas & Co owner of three haciendas, namely, Haciendas Palico,
ISSUE HELD
WON the subject NATALIA and EDIC did in fact comply with all the requirements of law.
land are  Preliminary Approval and Locational Clearances and Development
included in the Permits – reveals that they complied with the requirements of law
coverage of o 1st: secured favorable recommendations from Lungsod
CARL. Silangan Development Corporation, agency tasked to oversee
-NO the implementation
o 2nd :they had permits from Human Settlements
Regulatory Commission
o The permits stated > they are in conformity with the
Standard, Rules and Regulation of "The Subdivision and
Condominium Buyers Protective Decree”
As a matter of fact, no need for petitioners to secure a clearance or prior
approval from DAR
 NATALIA properties > within the areas set aside for the Lungsod
Silangan Reservation.
 PD 1637, in effect, the agricultural land into land for residential use.
 With compliance with all relevant rules and requirement > valid
conversion
 PD 1637 referred only to the Lungsod Silangan Reservation, which
makes it a special law> special law prevails over PD 957
Coverage of CARL
 Section 4 of R.A. 6657: ARL shall "cover, regardless of tenurial
arrangement and commodity produced, all public and private
agricultural lands."
what constitutes "agricultural land,"
 as "land devoted to agricultural activity as defined in this Act and not
classified as mineral, forest, residential, commercial or industrial
land." 
 Based on the deliberation of the Constitutional Commission
THUS, the undeveloped portions of the Antipolo Hills Subdivision cannot
be considered as "agricultural lands."
 lots were intended for residential use.
 Ceased to be agricultural upon approval of their inclusion in the
Lungsod Silangan Reservation.
 Though the development may had been delayed > but this does not
detract from the fact that these lands are still residential lands and
outside the ambit of the CARL.
Lands not devoted to agricultural activity are outside the coverage of CARL
 These include lands previously converted to non-agricultural uses
prior to the effectivity of CARL by government agencies other than
respondent DAR
 Since the NATALIA lands were converted prior to 15 June 1988 ,
respondent DAR is bound by such conversion.
 therefore error to include the undeveloped portions of the Antipolo
Hills Subdivision within the coverage of CARL.
WON the subject Under DAR A.O. No. 2 the application for conversion is filed with the MARO
& Co v. Banilad and Caylaway in Nasugbu, Batangas.
CA,  Before the law's effectivity, on May 6, 1988, Roxas & CO. –
DAR applied for Voluntary Offer to Sell Hacienda Caylaway, pursuant
to EO 229
 June 15, 1988. – RA 6657, CARL took effect
 Haciendas Palico and Banilad were placed under compulsory
acquisition, pursuant to CARL
o December 12, 1989- Palico and Banilad“Notice of
Acquisition”
 August 6, 1992, - Roxas & Co>letter withdrawing its VOS of
Hacienda Caylaway
o claimed that in 1975, Pres. Marcos issued PD 1520
– declaring Nasugbu as a tourist zone (the
haciendas were reclassified as non-agricultural 13
years before the effectivity of R. A. No. 6657. )
o also claimed-Pursuant to PD 1520, the
Sangguniang Bayan of Nasugbu allegedly
authorized the reclassification of Hacienda
Caylaway from agricultural to non-agricultural,
through Resolution No. 19 on March 20, 1992 >
approved on March 8, 1993
o Further claims that PD 1520 was upheld by DAR
in 1991, whan it approved the conversion in
Nasugbu into a tourist area as Batulao Resort
Complex
o Thus, as these areas are adjacent to the hacienda,
haciendas should likewise be converted.
o DAR replied: such reclassification would not
exempt it from agrarian reform
lands are within where the property is located > The findings of the MARO are subject to review
the coverage of and evaluation by the Provincial Agrarian Reform Officer (PARO) > then further
CARL investigate to RARO
-YES o DAR's mandate over applications for conversion was reiterated in the
CARL
o mandated to "approve or disapprove applications for conversion,
restructuring or readjustment of agricultural lands into non-
agricultural uses,"
These A.O.'s and other implementing guidelines, including Presidential
issuances and national policies related to land use conversion have been
consolidated in DAR A.O. No. 07, Series of 1997.
- guiding principle: to preserve prime agricultural lands for food production
while, at the same time, recognizing the need of the other sectors of society
(housing, industry and commerce) for land when coinciding with the objectives
of the Comprehensive Agrarian Reform Law to promote social justice,
industrialization and the optimum use of land as a national resource for public
welfare. 
"Land Use" refers to the manner of utilization of land
"Land Use Conversion" refers to the act or process of changing the current use
of a piece of agricultural land into some other use approved by DAR
The power to determine whether Haciendas Palico, Banilad and Caylaway are
non-agricultural, hence, exempt from the coverage of the CARL lies with the
DAR, not with this Court.