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.