Republic of the Philippines vs. Salvador N. Lopez Agri-business Corp.

G.R. No. 178895. January 10, 2011

Salvador N. Lopez Agri-business Corp. vs. Republic of the Philippines
G.R. No. 179071. January 10, 2011

FACTS:
Subject of this case are four (4) parcels of land described as follows:
Title No. Area
1. TCT No. T-12635 49.5706 has. Limot Lands
(Lot 1454-A & 1296)
2. TCT No. T-12637 42.5706 has. Lopez lands
3. TCT No. T-12639 67.8633 has.

MARO Socorro C. Salga Issued a Notice of Coverage to petitioner with

regards to the aforementioned landholdings which were subsequently placed
under Compulsory Acquisition pursuant to R.A. 6657 (CARL).
Petitioner filed with the PARO an application for Exemption of lots covered
by TCT No. T-12637 and T-12639 from CARP coverage. It alleged that pursuant
to the case of Luz Farms v. DAR Secretary the Lopez lands are used for grazing
and habitat of 105 heads of cattle, 5 carabaos, 11 horses, 9 heads of goats and
18 heads of swine, prior to the effectivity of the CARL.
The MARO conducted an onsite investigation on the Lopez lands
confirming the presence of livestock as enumerated and recommends the
exemption from the coverage of CARP. Thus, the application for exemption of
Lopez lands was approved.
Consequently, TCT No. T-12635 covering Limot lands was cancelled and a
new one issued in the name of Republic of the Philippines. The petitioner filed
before the DAR Regional Director an application for the exemption from CARP
coverage of Limot lands. The DAR Regional Director denied the application on
the ground that it was not clearly shown that the Limot lands were actually,
directly and exclusively used for livestock raising.

ISSUE:
Whether 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.
HELD:
The Lopez lands are actually and directly being used for livestock and are
exempted from the coverage of CARL, whereas the Limot lands are not actually
and directly being used for livestock and therefore covered by the CARL.
RULING:
The SC reiterated the ruling in Luz Farms v. DAR Secretary where the
court declared unconstitutional the CARL provisions that included lands devoted
to livestock under the coverage of CARP. Thus, lands devoted to the raising of
livestock, poultry and swine has been classified as industrial, not agricultural,
and thus exempt from agrarian reform. Under the rules then prevailing, it was
the MARO who was primarily responsible for investigating the legal status, type
and areas of the land sought to be excluded; and for ascertaining whether the
area subject of the application for exemption had been devoted to livestock-
raising as of 15 June 1988.
As the primary official in charge of investigating the land sought to be
exempted as livestock land, the MARO's findings on the use and nature of the
land, if supported by substantial evidence on record, are to be accorded greater
weight, if not finality.
In the instant case, the MARO in its ocular inspection found on the Lopez
lands several heads of cattle, carabaos, horses, goats and pigs, some of which
were covered by several certificates of ownership. There were likewise structures
on the Lopez lands used for its livestock business, structures consisting of two
chutes where the livestock were kept during nighttime.
The Court gives great probative value to the actual, on-site investigation
made by the MARO as affirmed by the DAR Regional Director. The Court finds
that the Lopez lands were in fact actually, directly and exclusively being used as
industrial lands for livestock-raising.
In contrast, 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.
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.
Department of Agrarian Reform vs. Court of Appeals
[G.R. No. 170018. September 23, 2013]
FACTS:
Basilan Agricultural Trading Corporation (BATCO) was the owner of
several parcels of agricultural land situated in the Province of Basilan covered
by TCT Nos. T-7454, T-7455 and T-7456. The lands were voluntarily offered for
sale (VOS) to the government, pursuant to Section 19 of RA 6657 (CARL).
BATCO was notified that a portion of the lands was being placed under the
compulsory acquisition scheme by the DAR. The PARO issued a notice of Land
Valuation and Acquisition amounting to P7,501,228.39 but BATCO rejected and
opposed the valuation before the DARAB.
Following the procedure under section 16 (e) of CARL, the DAR directed
the LBP to deposit the compensation in cash and in agrarian reform bonds and
thereafter requested the Registry of Deeds to issue TCTs in the name of the RP.
In the meantime, 54 members of Maloong Canal, Farmers Agrarian Reform
Multi-purpose Cooperative (MCFARMCO) were identified as beneficiaries and the
DAR Regional Director directed the PARO to generate and issue the
corresponding CLOAs. Even over BATCO’s protest, the DAR Secretary directed
the DAR Regional Director to proceed with the registration and distribution of
CLOAs.
BATCO filed before the DAR Regional Office a petition for the exemption of
the subject portion from the coverage of the government’s Comprehensive
Agrarian Reform Program (CARP). It alleged that almost all of the entire subject
lands have been devoted to cattle and livestock production since their acquisition
in 1987 which would warrant the exemption to the coverage of CARP pursuant
to the ruling on Luz Farms v. DAR Secretary and DAR AO 09-93. Meanwhile,
BATCO’s certificate of title over the subject portion were cancelled and new titles
were issued in the name of the Republic of the Philippines.
Consequently, the Republic’s certificate of title were cancelled with the
registration of CLOAs in the name of MCFARMCO for the benefit of its 54
members. The DAR Regional Director denied the petition for the exemption filed
by BATCO which was affirmed by the DAR Secretary. Upon appeal, the CA
reversed the Order of the DAR Secretary and ruled in favor of BATCO. It cancelled
the TCT in the name of MCFARMCO.

ISSUE:
Whether the subject portion of the lands is exempted/ excluded from the
coverage of CARP.

HELD:
No. The land is covered by CARP because it is not exclusively devoted to
livestock, swine or poultry raising.
RULING:
The SC held that the determination of the land’s classification as either an
agricultural or industrial land must be primarily threshed out before the DAR
Secretary. Considering the DAR Secretary’s technical expertise on the matter,
courts cannot simply brush aside his pronouncement regarding the status of the
land in dispute. It is settled that in order to be entitled to exclusion/exemption,
it must be shown that the land is exclusively devoted to livestock, swine or
poultry raising. The land must be shown to have been used for such purposes
as of the effectivity of RA 6657, or on June 15, 1988.
The denial of the petition was clearly outlined in the Order of the DAR Secretary
who observed that: (a) none of the 156 certificate of livestock ownership
submitted by BATCO predates the effectivity of RA 6657; (b) more than half (80
out of 156) of the cattle was brought into the property only a few months before
the petition was filed; (c) the municipal agriculturist certified the presence of only
120 heads of cattle which is short of the minimum requirement under DAR AO
09-93; and (d) no evidence of was presented to prove the presence of hogs and
goats as well as of BATCO having met the infrastructure requirements under
DAR AO 09-93.
Under DAR AO 09-93, in order to be entitled to exemption, the applicant
must prove that: (a) the land sought to be excluded from CARP coverage is
exclusively, directly and actually used for livestock, poultry and swine raising as
of June 15, 1988; (b) there should be one head of cattle per hectare of land and
seven heads of goat per hectare of land; and (c) there should be 21 heads of cattle
for every 1.7815 has. of infrastructure, 147 heads of goat or sheep for every
0.7205 hectare of infrastructure, and 21 heads of swine for every 0.5126 hectare
of infrastructure.
The SC sustains the findings of the DAR Secretary which is based on
ocular inspection/investigation.