An application for land conversion can be validly denied if the subject property has already been placed under the coverage of the Comprehensive Agrarian Reform Program (CARP) prior to the application, and a party aggrieved by a DAR Secretary's decision must first exhaust available administrative remedies, such as an appeal to the Office of the President as provided by DAR rules, before resorting to a petition for certiorari in court, unless grave abuse of discretion is clearly shown and no other plain, speedy, and adequate remedy exists.

The case revolves around a 124-hectare parcel of land in Barrio Cadlan, Pili, Camarines Sur, owned by the petitioners. In 1994, this property was placed under the coverage of the Comprehensive Agrarian Reform Program (CARP) by the Municipal Agrarian Reform Officer (MARO). Subsequently, the petitioners applied for the conversion of this land from agricultural to residential/commercial use, which was denied by the DAR, leading to this legal dispute.

• Petitioners are owners of a 124-hectare land in Barrio Cadlan, Pili, Camarines Sur.
• On November 15, 1994, the Municipal Agrarian Reform Officer (MARO) of Pili issued a notice of coverage, placing the property under the Comprehensive Agrarian Reform Program (CARP); petitioners did not protest this notice.
• On July 1, 1996, petitioners filed an application with the Department of Agrarian Reform (DAR) for the conversion of the property from agricultural to residential use.
• On August 26, 1996, the Sangguniang Bayan of Pili passed Resolution No. 145, approving a Comprehensive Zoning Ordinance that reclassified the subject property from agricultural to highly urbanized, intended for mixed residential and commercial use.
• Petitioners then requested DAR Regional Director Percival C. Dalugdug to set aside the November 15, 1994 notice of coverage, arguing the land had been reclassified and was no longer suitable for agricultural purposes.
• On November 13, 1996, Director Dalugdug denied their request, citing DAR-Administrative Order (AO) No. 12, s. 1994, which states that no application for conversion shall be accepted on lands for compulsory acquisition already given notices of coverage unless such notice is lifted.
• Respondent DAR Secretary Ernesto Garilao upheld Director Dalugdug's decision and denied petitioners' application for conversion because the property had already been placed under CARP.
• Petitioners' subsequent motions for reconsideration to the DAR Secretary were denied.

• The Court of Appeals erred in dismissing their petition for certiorari on the ground that they violated the rule on exhaustion of administrative remedies.
• The act of a department secretary may be directly challenged in a petition for certiorari without appealing to the Office of the President.
• The DAR Secretary acted with grave abuse of discretion when he denied their application for conversion.
• The issuance of a mere notice of coverage, as opposed to a notice of acquisition, was not a valid ground for the denial of their conversion application.

• The property had already been placed under the Comprehensive Agrarian Reform Program (CARP) prior to the application for conversion.
• DAR-Administrative Order No. 12, s. 1994, prohibits the acceptance of conversion applications for lands already issued notices of coverage for compulsory acquisition.
• (Implicitly, as reasoned by the CA and SC) Petitioners failed to exhaust administrative remedies by not appealing the DAR Secretary's decision to the Office of the President as provided under DAR-AO No. 7, s. 1997.

• Whether the Court of Appeals erred in dismissing the petitioners' petition for certiorari due to non-exhaustion of administrative remedies.
• Whether the respondent DAR Secretary committed grave abuse of discretion in denying the petitioners' application for land conversion.

• The Supreme Court dismissed the petition and affirmed the resolutions of the Court of Appeals.
• The Court held that while the doctrine of qualified political agency generally allows direct challenge to a department secretary's act via certiorari, this applies when there is grave abuse of discretion and no other plain, speedy, and adequate remedy.
• The respondent DAR Secretary did not commit grave abuse of discretion because the denial of the conversion application was based on DAR-AO No. 12, s. 1994, as the property was already under CARP coverage when the application was filed.
• DAR-AO No. 7, s. 1997, provided a plain, speedy, and adequate remedy in the form of an appeal of the DAR Secretary's decision to the Office of the President.
• Petitioners' failure to appeal to the Office of the President before filing a petition for certiorari violated the doctrine of exhaustion of administrative remedies, rendering their petition premature.

• Doctrine of Qualified Political Agency (Alter Ego Principle) — Department secretaries are considered alter egos or assistants of the President, and their official acts are presumed to be those of the President unless disapproved or reprobated by him. The Court acknowledged this doctrine allows, as a rule, an aggrieved party affected by a cabinet secretary's decision to directly file a petition for certiorari in the Court of Appeals without appealing to the Office of the President, but emphasized this rule is subject to exceptions, such as the availability of a plain, speedy, and adequate remedy.
• Exhaustion of Administrative Remedies — This doctrine requires that a party aggrieved by an order of an administrative official must first appeal to the higher administrative authority before seeking judicial relief. In this case, the Court found that petitioners failed to exhaust administrative remedies by not appealing the DAR Secretary's denial of their conversion application to the Office of the President, as provided by DAR-AO No. 7, s. 1997, thus rendering their petition for certiorari premature.
• Grave Abuse of Discretion (for Certiorari under Rule 65) — For a petition for certiorari to prosper on the ground of grave abuse of discretion, it must be shown that the public respondent patently and grossly abused his discretion, and such abuse amounted to an evasion of positive duty or a virtual refusal to perform a duty enjoined by law, or to act at all in contemplation of law, by exercising power arbitrarily and despotically due to passion or hostility. The Court found no grave abuse of discretion on the part of the DAR Secretary as his denial of the conversion application was based on valid grounds (existing DAR regulations and prior CARP coverage).
• Plain, Speedy, and Adequate Remedy (Requirement for Certiorari) — Section 1 of Rule 65 of the Rules of Court provides that a petition for certiorari is available only when there is no appeal, or any plain, speedy, and adequate remedy in the ordinary course of law. The Court ruled that an appeal to the Office of the President under DAR-AO No. 7, s. 1997 constituted such a remedy, which the petitioners failed to utilize.

• "Under the doctrine of qualified political agency, department secretaries are alter egos or assistants of the President and their acts are presumed to be those of the latter unless disapproved or reprobated by him."
• "In a petition for certiorari premised on grave abuse of discretion, it must be shown that public respondent patently and grossly abused his discretion and that such abuse amounted to an evasion of positive duty or a virtual refusal to perform a duty enjoined by law or to act at all in contemplation of law. In other words, the public respondent exercised his power arbitrarily and despotically by reason of passion or hostility."
• "Needless to state, elevating the matter to the OP was consistent with the doctrine of exhaustion of administrative remedies. A party aggrieved by an order of an administrative official should first appeal to the higher administrative authority before seeking judicial relief. Otherwise, as in this case, the complaint will be dismissed for being premature or for having no cause of action."

• DENR v. DENR Region 12 Employees — Cited to support the explanation of the doctrine of qualified political agency.
• Ruben E. Agpalo, Philippine Administrative Law 1999 ed. — Referenced for the general rule that a decision of a department secretary may be directly assailed in the Court of Appeals via certiorari.
• Aggabao v. Commission on Elections — Cited as an example illustrating the definition of grave abuse of discretion for certiorari to prosper.
• Zarate v. Maybank — Cited as an example illustrating the definition of grave abuse of discretion for certiorari to prosper.
• Agustin v. Court of Appeals — Cited as an example illustrating the definition of grave abuse of discretion for certiorari to prosper.
• Pangasinan State University v. Court of Appeals — Cited to support the consequence that failure to exhaust administrative remedies leads to dismissal of the complaint for being premature or for having no cause of action.

• DAR-Administrative Order (AO) No. 12, s. 1994 — This order states that "no application for conversions shall be accepted on lands for compulsory acquisition already given notices of coverage." It was the primary basis for the DAR Regional Director and the DAR Secretary in denying the petitioners' application for conversion, as the subject property had already received a notice of CARP coverage.
• DAR-Administrative Order (AO) No. 7, s. 1997, par. XIV — This provision outlines the appeal process from decisions of the DAR Undersecretary or Secretary, stating that an appeal "from the Secretary [shall be made] to the Office of the President or the Court of Appeals as the case may be." The Court cited this to show that petitioners had a plain, speedy, and adequate administrative remedy (appeal to the Office of the President) which they failed to exhaust.
• Rules of Court, Rule 65, Section 1 — This rule governs petitions for certiorari and requires, for the petition to prosper, that the public respondent acted without or in excess of jurisdiction or with grave abuse of discretion, and that there is no appeal or any plain, speedy, and adequate remedy in the ordinary course of law. The Court applied this rule in evaluating the propriety of the petitioners' certiorari petition to the CA.