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

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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.