G.R. No.

178895               January 10, 2011

REPUBLIC OF THE PHILIPPINES, represented by the DEPARTMENT OF AGRARIAN REFORM,

through the HON. SECRETARY NASSER C. PANGANDAMAN, Petitioner
vs.
SALVADOR N. LOPEZ AGRI-BUSINESS CORP.(SNLABC), represented by SALVADOR N.
LOPEZ, JR., President and General Manager, Respondent.

x - - - - - -x

G.R. No. 179071

SALVADOR N. LOPEZ AGRI-BUSINESS CORP., represented by SALVADOR N. LOPEZ, JR.,

President and General Manager, Petitioner
vs.
DEPARTMENT OF AGRARIAN REFORM, through the Honorable Secretary, Respondent.

Facts: SNLABC owns 4 parcels of land with an area of 160.1161 hectares located in Mati, Davao
Oriental. On 1991, Municipal Agrarian Reform Officer (MARO) Socorro C. Salga issued a Notice of
Coverage to Lopez stating that the subject lands will be placed under Compulsory Acquisition
pursuant to Comprehensive Agrarian Reform Law.

On 1992, Lopez filed an Application for Exemption of the lots from CARP coverage as said parcels
of land were used for agricultural purposes prior to the effectivity of the CARL. MARO conducted
onsite investigation in the lands and thereafter recommended for the exemption of lands from the
coverage of CARP. On 1993, TCT No. T-12635 covering Lots 1454-A & 1296 (Limot Lands) was
cancelled and a new one issued in the name of the Philippines under RP T-16356. On 1994, Lopez
sent a letter to Secretary DAR requesting for the exclusion from CARP coverage of Limot Lands on
the ground that they needed the additional area for its livestock business. On 1995, Lopez filed
before the DAR RD an application for the exemption from CARP coverage of same lots. The DAR
RD denied the application for exemption on the ground that it was not clearly shown that the land
was exclusively used for livestock raising. Moreover, Lopez himself admitted that it needs the lots for
additional grazing area.

Lopez appealed to DAR Secretary but the latter affirmed the ruling on Limot Lands and further
declared Lots 1298 and 1293-B as covered by the CARP. Lopez appealed at CA but partially
granted the SNLABC petition and excluded the Lopez Lands from coverage of the CARL. However,
it upheld the decisions of the DAR RD and the DAR Secretary denying the application for exemption
with respect to Limot Lands as these lots were already under the name of the Philippines.

Issue: Whether the Lopez lands and Limot lands of SNLABC can be exempted from the coverage of
the CARL.

Ruling:

I. The Lopez lands of SNLABC are actually and directly being used for livestock and are
thus exempted from the coverage of the CARL.

In Luz Farms v. Secretary of the Department of Agrarian Reform, the Court declared unconstitutional
the CARL provisions that included lands devoted to livestock under the coverage of the CARP. The
transcripts of the deliberations of the Constitutional Commission of 1986 on the meaning of the word
“agricultural” showed that it was never the intention of the framers of the Constitution to include the
livestock and poultry industry in the coverage of the constitutionally mandated agrarian reform
program of the government. Thus, lands devoted to the raising of livestock, poultry and swine have
been classified as industrial, not agricultural, and thus exempt from agrarian reform.

MARO in its ocular inspection found on the Lopez lands several heads of cattle, carabaos, horses,
goats and pigs. There were also structures on the Lopez lands used for its livestock business,
structures consisting of two chutes where the livestock were kept during nighttime. The existence of
the cattle prior to the enactment of the CARL was positively affirmed by the farm workers and the
overseer who were interviewed. Considering these factual findings and the fact that the lands were
being used for SNLABC’s livestock business even prior to 15 June 1988. Hence, the Lopez lands
were actually, directly and exclusively being used as industrial lands for livestock-raising.

II. The Limot lands of SNLABC are not actually and directly being used for livestock and
should thus not be covered by the CARL.

SNLABC requested the exemption of the Limot lands on the ground that the corporation needed the
additional area for its livestock business. DAR RD has noted that the Limot lands were not
exclusively used for livestock raising. Further, in the investigation conducted by MARO, it found that
the livestock were only moved to the Limot lands sporadically and were not permanently designated
there and merely a "seasonal extension of the applicant’s ‘grazing lands’ during the summer."
Therefore, the Limot lands cannot be claimed to have been actually, directly and exclusively used for
SNLABC’s livestock business, especially since these were only intermittently and secondarily used
as grazing areas. Hence, the Limot lands were not being used for livestock grazing thus, do not
qualify for exemption from CARP coverage.