G.R. No. 162070 Case Digest

G.R. No. 162070, October 19, 2005

DAR

vs Delia Sutton,etc.

Ponente: Puno

Facts:

Respondents inherited a land in Masbate which has been exclusively devoted to cow and calf breeding, the respondents made a voluntary offer to sell their land to DAR to avail of certain incentives under the law. When CARP took effect, it included to its coverage farms used for raising livestock, poultry and swine.

Since, SC en banc declared lands devoted to poultry and livestock not included in the definition of agricultural land in Luz Farms Case, respondents filed with DAR a formal request to withdraw their offer to sell saying that their land is exempted from the coverage of CARL.

In 1995, DAR partially granted the application of the respondents for exemption applying the retention limits (1hectare:1head of animal) with such, some portion of respondent's land were exempted, some portion were segregated and placed under Compulsory Acquisition. Respondents moved for reconsideration saying that the entire portion of the land must be exempted because it was solely devoted to cattle-raising, their motion was denied.

They filed a notice of appeal with the Office of the President assailing the constitutionality of CARL and pushing their application for exemption. The President affirmed the order of DAR. On appeal, CA declared the DAR Administrative Order (retention limits) null and void, favoring the respondents.

Issue: Whether DAR A.O prescribing a maximum retention limit for owners of lands devoted to livestock raising constitutional.

Ruling:

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 poultry- raising. The Court clarified in the Luz Farms case that livestock, swine and poultry-raising 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, anti-pollution equipment like bio-gas and digester plants augmented by lagoons and concrete ponds, deepwells, elevated water tanks, pumphouses, sprayers, and other technological appurtenances.

Lands devoted to raising of livestock, poultry and swine have been classified as industrial, not agricultural, lands and thus exempt from agrarian reform. Petitioner DAR argues that, in issuing the impugned A.O., it was seeking to address the reports it has received that some unscrupulous landowners have been converting their agricultural lands to livestock farms to avoid their coverage by the agrarian reform. Again, we find neither merit nor logic in this contention. The undesirable scenario which petitioner seeks to prevent with the issuance of the A.O. clearly does not apply in this case. Respondents family acquired their landholdings as early as 1948. They have long been in the business of breeding cattle in Masbate which is popularly known as the cattle-breeding capital of the Philippines. Petitioner DAR does not dispute this fact. Indeed, there is no evidence on record that respondents have just recently engaged in or converted to the business of breeding cattle after the enactment of the CARL that may lead one to suspect that respondents intended to evade its coverage. It must be stressed that what the CARL prohibits is the conversion of agricultural lands for non-agricultural purposes after the effectivity of the CARL. There has been no change of business interest in the case of respondents.