Luz Farms vs Sec of DAR

FACTS:

Luz Farms is a corporation engaged in the livestock and poultry business allegedly stands to be adversely
affected by the enforcement of some provisions of CARP.

Luz Farms questions the following provisions of R.A. 6657, insofar as they are made to apply to it:

(a) Section 3(b) which includes the "raising of livestock (and poultry)" in the definition of "Agricultural,
Agricultural Enterprise or Agricultural Activity.

(b) Section 11 which defines "commercial farms" as "private agricultural lands devoted to commercial,
livestock, poultry and swine raising . . ."

(c) Section 13 which calls upon petitioner to execute a production-sharing plan.

(d) Section 16(d) and 17 which vest on the Department of Agrarian Reform the authority to summarily
determine the just compensation to be paid for lands covered by the Comprehensive Agrarian Reform
Law

(e) Section 32 which spells out the production-sharing plan mentioned in Section 13

". . . (W)hereby three percent (3%) of the gross sales from the production of such lands are distributed
within sixty (60) days of the end of the fiscal year as compensation to regular and other farmworkers in
such lands over and above the compensation they currently receive xxx

ISSUE: The main issue in this petition is the constitutionality of Sections 3(b), 11, 13 and 32 of R.A. No.
6657 (the Comprehensive Agrarian Reform Law of 1988), insofar as the said law includes the raising of
livestock, poultry and swine in its coverage

HELD:

Said provisions are unconstitutional.

The transcripts of the deliberations of the Constitutional Commission of 1986 on the meaning of the
word "agricultural," clearly show that it was never the intention of the framers of the Constitution to
include livestock and poultry industry in the coverage of the constitutionally-mandated agrarian reform
program of the Government.
Commissioner Tadeo: Ipinaaalam ko kay Commissioner Regalado na hindi namin inilagay ang agricultural
worker sa kadahilanang kasama rito ang piggery, poultry at livestock workers. Ang inilagay namin dito ay
farm worker kaya hindi kasama ang piggery, poultry at livestock workers.

It is evident from the foregoing discussion that Section II of R.A. 6657 which includes "private
agricultural lands devoted to commercial livestock, poultry and swine raising" in the definition of
"commercial farms" is invalid, to the extent that the aforecited agro-industrial activities are made to be
covered by the agrarian reform program of the State. There is simply no reason to include livestock and
poultry lands in the coverage of agrarian reform.

Luz Farms v. Secretary of DAR

G.R. No. 86889 December 4, 1990

Facts:

On 10 June 1988, RA 6657 was approved by the President of the Philippines, which includes, among
others, the raising of livestock, poultry and swine in its coverage.

Petitioner Luz Farms, a corporation engaged in the livestock and poultry business, avers that it would be
adversely affected by the enforcement of sections 3(b), 11, 13, 16 (d), 17 and 32 of the said law. Hence,
it prayed that the said law be declared unconstitutional. The mentioned sections of the law provies,
among others, the product-sharing plan, including those engaged in livestock and poultry business.

Luz Farms further argued that livestock or poultry raising is not similar with crop or tree farming. That
the land is not the primary resource in this undertaking and represents no more than 5% of the total
investments of commercial livestock and poultry raisers. That the land is incidental but not the principal
factor or consideration in their industry. Hence, it argued that it should not be included in the coverage
of RA 6657 which covers “agricultural lands”.

Issue: Whether or not certain provisions of RA 6657 is unconstitutional for including in its definition of
“Agriculture” the livestock and poultyr industry?

Ruling:
The Court held YES.

Looking into the transcript of the Constitutional Commission on the meaning of the word “agriculture”,
it showed that the framers never intended to include livestock and poultry industry in the coverage of
the constitutionally mandated agrarian reform program of the government.

Further, Commissioner Tadeo pointed out that the reasin why they used the term “farmworkers” rather
than “agricultural workers” in the said law is because “agricultural workers” includes the livestock and
poultry industry, hence, since they do not intend to include the latter, they used “farmworkers” to have
distinction.

Hence, there is merit on the petitioner’s argument that the product-sharing plan applied to “corporate
farms” in the contested provisions is unreasonable for being consficatory and violative of the due
process of aw.

Monday, November 25, 2013

Association of Small Landowners in the Philippines vs. Honorable Secretary of Agrarian Reform

G.R. No. 78742 July 14, 1989

Petitioner: Association of Small Landowners in the Philippines

Respondent: Honorable Secretary of Agrarian Reform

Facts: These are consolidated cases which involve common legal, including serious challenges to the
constitutionality of the several measures such as P.D. No. 27, E.O. No. 228, Presidential Proclamation
No. 131, E.O. No. 229, and R.A. No. 6657.

G.R. No. 79777

The petitioners are questioning P.D. No. 27 and E.O. Nos. 228 and 229 on grounds inter alia of
separation of powers, due process, equal protection and the constitutional limitation that no private
property shall be taken for public use without just compensation. G.R. No. 79310

G.R. No. 79310

This petition seeks to prohibit the implementation of Proc. No. 131 and E.O. No. 229. They contend that
taking must be simultaneous with payment of just compensation as it is traditionally understood, i.e.,
with money and in full, but no such payment is contemplated in Section 5 of the E.O. No. 229.

G.R. No. 79744

The petitioner argues that E.O. Nos. 228 and 229 are violative of the constitutional provision that no
private property shall be taken without due process or just compensation.

G.R. No. 78742

Petitioners claim they cannot eject their tenants and so are unable to enjoy their right of retention
because the Department of Agrarian Reform has so far not issued the implementing rules required
under the above-quoted decree.

Issue: Whether agrarian reform is an exercise of police power or eminent domain

Ruling: There are traditional distinctions between the police power and the power of eminent domain
that logically preclude the application of both powers at the same time on the same subject. Property
condemned under the police power is noxious or intended for a noxious purpose, such as a building on
the verge of collapse, which should be demolished for the public safety, or obscene materials, which
should be destroyed in the interest of public morals. The confiscation of such property is not
compensable, unlike the taking of property under the power of expropriation, which requires the
payment of just compensation to the owner.

The cases before us present no knotty complication insofar as the question of compensable taking is
concerned. To the extent that the measures under challenge merely prescribe retention limits for
landowners, there is an exercise of the police power for the regulation of private property in accordance
with the Constitution. But where, to carry out such regulation, it becomes necessary to deprive such
owners of whatever lands they may own in excess of the maximum area allowed, there is definitely a
taking under the power of eminent domain for which payment of just compensation is imperative. The
taking contemplated is not a mere limitation of the use of the land. What is required is the surrender of
the title to and the physical possession of the said excess and all beneficial rights accruing to the owner
in favor of the farmer-beneficiary. This is definitely an exercise not of the police power but of the power
of eminent domain

DAR vs SALVADOR N. LOPEZ AGRIBUSINESS CORP, G.R. No. 179071 January 10, 2011 - Case Digest
REPUBLIC OF THE PHILIPPINES, represented by the DEPARTMENT OF AGRARIAN REFORM, through the
HON. SECRETARY NASSER C. PANGANDAMAN, Petitioner,

vs

SALVADOR N. LOPEZ AGRIBUSINESS CORP., represented by SALVADOR N. LOPEZ, JR., President and
General Manager, Respondent.

G.R. No. 178895

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

SALVADOR N. LOPEZ AGRIBUSINESS CORP., represented by SALVADOR N. LOPEZ, JR., President and
General Manager, Petitioner,

vs

DEPARTMENT OF AGRARIA REFORM, through the Honorable Secretary, Respondent.

G.R. No. 179071 January 10, 2011

FACTS:

Subject of this petition are four (4) parcels of land with an aggregate area of 160.1161 hectares
registered in the name of Salvador N. Lopez AgriBusiness Corporation. Said parcels of land are
hereinafter described as follows:

On August 2, 1991, Municipal Agrarian Reform Officer (MARO) Socorro C. Salga issued a Notice of
Coverage to petitioner with regards (sic) to the aforementioned landholdings which were subsequently
placed under Compulsory Acquisition pursuant to R.A. 6657 (Comprehensive Agrarian Reform Law).
On December 10, 1992, petitioner filed with the Provincial Agrarian Reform Office (PARO), Davao
Oriental, an Application for Exemption of the lots covered by TCT No. T12637 and T12639 from CARP
coverage. It alleged that pursuant to the case of Luz Farms v. DAR Secretary said parcels of land are
exempted from coverage as the said parcels of land with a total area of 110.5455 hectares are used for
grazing and habitat of petitioners 105 heads of cattle, 5 carabaos, 11 horses, 9 heads of goats and 18
heads of swine, prior to the effectivity of the Comprehensive Agrarian Reform Law (CARL).

On December 13, 1992 and March 1, 1993, the MARO conducted an onsite investigation on the two
parcels of land confirming the presence of the livestock as enumerated. The Investigation Report dated
March 9, 1993 stated:

“Cognitive thereto, we are favorably recommending for the exemption from the coverage of CARP
based on LUZ FARMS as enunciated by the Supreme Court the herein Lot No. 1293-B Psd-65835 under
TCT No. T12639 except Lot No. 1298, Cad. 286 of TCT No. T12637 which is already covered under the
Compulsory Acquisition (CA) Scheme and had already been valued by the Land Valuation Office, Land
Bank of the Philippines.”

On June 24, 1993, TCT No. T12635 covering Lots 1454A & 1296 was cancelled and a new one issued in
the name of the Republic of the Philippines under RP T16356. On February 7, 1994, petitioner through
its President, Salvador N. Lopez, Jr., executed a letteraffidavit addressed to the respondent Secretary
requesting for the exclusion from CARP coverage of Lots 1454A and 1296 on the ground that they
needed the additional area for its livestock business. On March 28, 1995, petitioner filed before the DAR
Regional Director of Davao City an application for the exemption from CARP coverage of Lots 1454A and
1296 stating that it has been operating grazing lands even prior to June 15, 1988 and that the said two
(2) lots form an integral part of its grazing land.

The DAR Regional Director, after inspecting the properties, issued an Order dated March 5, 1997
denying the application for exemption of Lots 1454A and 1296 on the ground that it was not clearly
shown that the same were actually, directly and exclusively used for livestock raising since in its
application, petitioner itself admitted that it needs the lots for additional grazing area. The application
for exemption, however of the other two (2) parcels of land was approved.

On its partial motion for reconsideration, petitioner argued that Lots 1454A & 1296 were taken beyond
the operation of the CARP pursuant to its reclassification to a Pollutive Industrial District (Heavy
Industry) per Resolution No. 39 of the Sangguniang Bayan of Mati, Davao Oriental, enacted on April 7,
1992. The DAR Regional Director denied the Motion.

The petitioner appealed the Regional Directors Orders to respondent DAR. On June 10, 1998, the latter
issued its assailed Order affirming the Regional Directors ruling on Lots 1454A & 1296 and further
declared Lots 1298 and 1293B as covered by the CARP.
On October 17, 2002, petitioners Motion for Reconsideration was denied by respondent prompting the
former to file the instant petition.

The Court of Appeals partially granted the SNLABC Petition and excluded the two (2) parcels of land
(Transfer Certificate of Title [TCT] Nos. T12637 and T12639) located in Barrio Don Enrique Lopez (the
Lopez lands) from coverage of the CARL.

However, it upheld the Decisions of the Regional Director and the DAR Secretary denying the application
for exemption with respect to Lots 1454A and 1296 (previously under TCT No. T12635) in Barrio Limot
(the Limot lands). These lots were already covered by a new title under the name of the Republic of the
Philippines (RP T16356). The DAR and SNLABC separately sought a partial reconsideration of the assailed
Decision of the Court of Appeals, but their motions for reconsideration were subsequently denied.

ISSUE: W/N the Lopez and Limot lands of SNLABC can be considered grazing lands for its livestock
business and are thus exempted from the coverage of the CARL under the Courts ruling in Luz Farms v.
DAR.

HELD:

NO. The Limot lands were found to be agricultural lands devoted to coconut trees and rubber and are
thus not subject to exemption from CARP coverage.

In the Report dated 06 April 1994, the team that conducted the inspection found that the entire Limot
lands were devoted to coconuts (41.5706 hectares) and rubber (8.000 hectares) and recommended the
denial of the application for exemption. Verily, the Limot lands were actually, directly and exclusively
used for agricultural activities, a fact that necessarily makes them subject to the CARP. These findings of
the inspection team were given credence by the DAR Regional Director who denied the application, and
were even subsequently affirmed by the DAR Secretary and the Court of Appeals.

Tthe MARO itself in the Investigation Report cited by no less than SNLABC, found that the livestock were
only moved to the Limot lands sporadically and were not permanently designated there. The DAR
Secretary even described SNLABCs use of the area as a seasonal extension of the applicants grazing
lands during the summer. Therefore, the Limot lands cannot be claimed to have been actually, directly
and exclusively used for SNLABCs livestock business, especially since these were only intermittently and
secondarily used as grazing areas. The said lands are more suitable and are in fact actually, directly and
exclusively being used for agricultural purposes.

DAR vs SUTTON, G.R. No. 162070 October 19, 2005 - Case Digest

DEPARTMENT OF AGRARIAN REFORM, represented by SECRETARY JOSE MARI B. PONCE (OIC),

Petitioner,

vs

DELIA T. SUTTON, ELLA T. SUTTONSOLIMAN and HARRY T. SUTTON, Respondents.

G.R. No. 162070 October 19, 2005

FACTS:

The case at bar involves a land in Aroroy, Masbate, inherited by respondents which has been devoted
exclusively to cow and calf breeding. On October 26, 1987, pursuant to the then existing agrarian reform
program of the government, respondents made a voluntary offer to sell (VOS) their landholdings to
petitioner DAR to avail of certain incentives under the law.

On June 10, 1988, a new agrarian law, Republic Act (R.A.) No. 6657, also known as the Comprehensive
Agrarian Reform Law (CARL) of 1988, took effect. It included in its coverage farm used for raising
livestock, poultry and swine.

On December 4, 1990, in an en banc decision in the case of Luz Farms v. Secretary of DAR, this Court
ruled that lands devoted to livestock and poultryraising are not included in the definition of agricultural
land. Hence, we declared as unconstitutional certain provisions of the CARL insofar as they included
livestock farms in the coverage of agrarian reform.

In view of the Luz Farms ruling, respondents filed with petitioner DAR a formal request to withdraw their
VOS as their landholding was devoted exclusively to cattleraising and thus exempted from the coverage
of the CARL.
On December 21, 1992, the Municipal Agrarian Reform Officer of Aroroy, Masbate, inspected
respondents land and found that it was devoted solely to cattleraising and breeding. He recommended
to the DAR Secretary that it be exempted from the coverage of the CARL.

On April 27, 1993, respondents reiterated to petitioner DAR the withdrawal of their VOS and requested
the return of the supporting papers they submitted in connection therewith. Petitioner ignored their
request.

On December 27, 1993, DAR issued A.O. No. 9, series of 1993, which provided that only portions of
private agricultural lands used for the raising of livestock, poultry and swine as of June 15, 1988 shall be
excluded from the coverage of the CARL. In determining the area of land to be excluded, the A.O. fixed
the following retention limits, viz: 1:1 animalland ratio (i.e., 1 hectare of land per 1 head of animal shall
be retained by the landowner), and a ratio of 1.7815 hectares for livestock infrastructure for every 21
heads of cattle shall likewise be excluded from the operations of the CARL.

On February 4, 1994, respondents wrote the DAR Secretary and advised him to consider as final and
irrevocable the withdrawal of their VOS as, under the Luz Farms doctrine, their entire landholding is
exempted from the CARL.

On September 14, 1995, then DAR Secretary Ernesto D. Garilao issued an Order partially granting the
application of respondents for exemption from the coverage of CARL. Applying the retention limits
outlined in the DAR A.O. No. 9, petitioner exempted 1,209 hectares of respondents land for grazing
purposes, and a maximum of 102.5635 hectares for infrastructure. Petitioner ordered the rest of
respondents landholding to be segregated and placed under Compulsory Acquisition.

Respondents moved for reconsideration. They contend that their entire landholding should b exempted
as it is devoted exclusively to cattleraising. Their motion was denied.

They filed a notice of appeal with the Office of the President. On October 9, 2001, the Office of the
President affirmed the impugned Order of petitioner DAR. It ruled that DAR A.O. No. 9, s. 1993, does not
run counter to the Luz Farms case as the A.O. Provided the guidelines to determine whether a certain
parcel of land is being used for cattleraising. However, the issue on the constitutionality of the assailed
A.O. was left for the determination of the courts as the sole arbiters of such issue.

On appeal, the Court of Appeals ruled in favor of the respondents. It declared DAR A.O. No. 9, s. 1993,
void for being contrary to the intent of the 1987 Constitutional Commission to exclude livestock farms
from the land reform program of the government.

ISSUE: W/N DAR A.O. No. 9, series of 1993, which prescribes a maximum retention limit for owners of
lands devoted to livestock raising is constitutional.
HELD: NO.

In the case at bar, we find that the impugned A.O. is invalid as it contravenes the Constitution. The A.O.
sought to regulate livestock farms by including them in the coverage of agrarian reform and prescribing
a maximum retention limit for their ownership. However, the deliberations of the 1987 Constitutional
Commission show a clear intent to exclude, inter alia, all lands exclusively devoted to livestock, swine
and poultryraising. The Court clarified in the Luz Farms case that livestock, swine and poultryraising are
industrial activities and do not fall within the definition of agriculture or agricultural activity. The raising
of livestock, swine and poultry is different from crop or tree farming. It is an industrial, not an
agricultural, activity. A great portion of the investment in this enterprise is in the form of industrial fixed
assets, such as: animal housing structures and facilities, drainage, waterers and blowers, feedmill with
grinders, mixers, conveyors, exhausts and generators, extensive warehousing facilities for feeds and
other supplies, antipollution equipment like biogas and digester plants augmented by lagoons and
concrete ponds, deepwells, elevated water tanks, pumphouses, sprayers, and other technological
appurtenances.

Clearly, petitioner DAR has no power to regulate livestock farms which have been exempted by the
Constitution from the coverage of agrarian reform. It has exceeded its power in issuing the assailed A.O