Luz Farms vs.

Secretary of agrarian Reform

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 . .

Argument of Luz Farms: Congress in enacting the said law has transcended the mandate of the
Constitution, in including land devoted to the raising of livestock, poultry and swine in its coverage.
Livestock or poultry raising is not similar to crop or tree farming. Land is not the primary resource in this
undertaking and represents no more than five percent (5%) of the total investment of commercial
livestock and poultry raisers.
The use of land is incidental to but not the principal factor or consideration in productivity in this
industry. Including backyard raisers, about 80% of those in commercial livestock and poultry production
occupy five hectares or less. The remaining 20% are mostly corporate farms. Argument of public
respondent: Livestock and poultry raising is embraced in the term "agriculture" and the inclusion of such
enterprise under Section 3(b) of R.A. 6657 is proper.

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: ARTICLE XIII AGRARIAN AND NATURAL RESOURCES REFORM Section 4. The State
shall, by law, undertake an agrarian reform program founded on the right of farmers and regular
farmworkers, who are landless, to own directly or collectively the lands they till or, in the case of other
farmworkers, to receive a just share of the fruits thereof. To this end, the State shall encourage and
undertake the just distribution of all agricultural lands, subject to such priorities and reasonable retention
limits as the Congress may prescribe, taking into account ecological, developmental, or equity
considerations, and subject to the payment of just compensation. In determining retention limits, the State
shall respect the rights of small landowners. The State shall further provide incentives for voluntary land-
sharing. 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. The Committee adopted the definition of "agricultural land" as defined under Section
166 of R.A. 3844, as land devoted to any growth, including but not limited to crop lands, saltbeds,
fishponds, idle and abandoned land.

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De Guzman v. CA

Facts:
Petitioners contend that despite the conversion of the land for a commercial purpose, they have
remained tenants of the land devoting it for agricultural production. Though the earlier tenancy
relationship had been terminated upon the payment of disturbance compensation pursuant to the
1979 compromise agreement, petitioners posit that a tenancy relationship was created anew
between them and the municipality when the latter allowed petitioners to cultivate the land after
the expropriation proceeding.

Issue:
whether the subject land can be reclassified to agricultural after the purpose of its conversion to a
non-agricultural land had not materialized.

Held:
Petitioner’s reliance on the provisions of A.O. No. 20, series of 1992, issued by then President
Fidel Ramos is misplaced. A.O. No. 20, which sets forth the guidelines to be observed by local
government units and government agencies on agricultural land use conversion, cannot be
applied to the subject land for the reason that the land had already been classified as commercial
long before its issuance. Indeed, A.O. No. 20 cannot be applied retroactively.
Association of small Landowners v. Secretary of AR

Facts:
Nicolas Manaay questioned the validity of the agrarian reform laws (PD 27, EO 228, and 229) on
the ground that these laws already valuated their lands for the agrarian reform program and that
the specific amount must be determined by the Department of Agrarian Reform (DAR). Manaay
averred that this violated the principle in eminent domain which provides that only courts can
determine just compensation. This, for Manaay, also violated due process for under the
constitution, no property shall be taken for public use without just compensation.

Manaay also questioned the provision which states that landowners may be paid for their land in
bonds and not necessarily in cash. Manaay averred that just compensation has always been in the
form of money and not in bonds.

Issue:
Whether or not just compensation, under the agrarian reform program, must be in terms of cash.

Held:
No. Money as [sole] payment for just compensation is merely a concept in traditional exercise of
eminent domain. The agrarian reform program is a revolutionary exercise of eminent domain.
The program will require billions of pesos in funds if all compensation have to be made in cash –
if everything is in cash, then the government will not have sufficient money hence, bonds, and
other securities, i.e., shares of stocks, may be used for just compensation.
Hacienda Luicitta v. PARC

Facts:
Republic v. Salvador

Facts:
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. T-12637 and T-
12639 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).

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:
On the assumption that five thousand five hundred forty-eight (5,548) coconut trees were
existing on the Lopez land (TCT No. T-12637), the DAR did not refute the findings of the
MARO that these coconut trees were merely incidental.

SNLABCs treatment of the land for non-livestock purposes is highlighted by its undue delay in
filing the application for exemption of the Limot lands. SNLABC filed the application only on
07 February 1994, or three years after the Notice of Coverage was issued

Lands devoted to raising of livestock, poultry and swine have been classified as industrial, not
agricultural, lands and thus exempt from agrarian reform.
DAR v. Sutton

Facts:
In view of the Luz Farm ruling, respondent filed with petitioner DAR a formal request to withdraw their
VOS as their landholding was exclusively to cattle-raising and thus exempted from the coverage of the
CARL. Petitioner ignored their request.

Petitioner ordered the rest of respondents’ landholding to be segregated and placed under Compulsory
Acquisition.

Issue:
Did respondent intentionally converted the land to non-agri to be excempted from CARP?

Held:
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.

In raising livestock etc., no land is tilled nor crops harvested.

Daez v CA

Facts:

Eudosia Daez, now deceased, was the owner of a 4.1685-hectare Riceland under a system of
share-tenancy.

Held:

Exemption and retention in agrarian reform are two (2) distinct concepts.

P.D. No. 27, which implemented the Operation Land Transfer (OLT) Program, covers tenanted
rice or corn lands. The requisites for coverage under the OLT program are the following: (1) the
land must be devoted to rice or corn crops; and (2) there must be a system of share-crop or lease-
tenancy obtaining therein. If either requisite is absent, a landowner may apply for exemption. If
either of these requisites is absent, the land is not covered under OLT. Hence, a landowner need
not apply for retention where his ownership over the entire landholding is intact and undisturbed.

P.D. No. 27 grants each tenant of covered lands a five (5)-hectare lot, or in case the land is
irrigated, a three (3)-hectare lot constituting a family size farm. However, said law allows a
covered landowner to retain not more than seven (7) hectares of his land if his aggregate
landholding does not exceed twenty-four (24) hectares. Otherwise, his entire landholding is
covered without him being entitled to any retention right.

Consequently, a landowner may keep his entire covered landholding if its aggregate size does
not exceed the retention limit of seven (7) hectares. If a land owner is deprived of his right to
retention. He may file for a petition of cancellation of EP or CLA that may have issued to the
tenants.
Tenants of estate of Dr Jose Sison v. CA

Facts:
Pursuant to the Operation Land Transfer Program of the Government under Presidential Decree
No. 27, certificates of land transfer were issued by the Ministry of Agrarian Reform to the
petitioners, tenants of the Estate of Dr. Jose Sison, for their respective areas of cultivation. Upon
discovering that certificates of land transfer were being issued to the petitioners, the heirs of Dr.
Sison protested to the then Minister of Agrarian Reform, Conrado Estrella, who ordered that the
certificates of land transfer be marked, "UNDER PROTEST."

Issue:
Whether estoppel applies in in this case.

Held:
The failure of the private respondents to apply for retention of seven (7) hectares each of their
agricultural landholdings did not constitute an estoppel or waiver of their respective right of
retention. The omission was cured by their timely protest against the issuance of the certificates
of land transfer to the petitioners. In the 1st Indorsement by Gregorio Sapera, Legal Office, of
the Kagawarang Pangsakahan, it was noted that as early as December 20, 1973, the Heirs of Dr.
Jose Sison had been seeking exemption of their landholdings from the Operation Land Transfer.