Luz Farms v.
Secretary of DAR the constitutionally mandated agrarian reform program of the
G.R. No. 86889 December 4, 1990
Facts:
On 10 June 1988, RA 6657 was approved by the President of the
Philippines, which includes, among others, the raising of livestock,
poultry and swine in its coverage.
Petitioner Luz Farms, a corporation engaged in the livestock and
poultry business, avers that it would be adversely affected by the
enforcement of sections 3(b), 11, 13, 16 (d), 17 and 32 of the said law.
Hence, it prayed that the said law be declared unconstitutional. The
mentioned sections of the law provides, among others, the product-
sharing plan, including those engaged in livestock and poultry
business.
Luz Farms further argued that livestock or poultry raising is not
similar with crop or tree farming. That the land is not the primary
resource in this undertaking and represents no more than 5% of the
total investments of commercial livestock and poultry raisers. That
the land is incidental but not the principal factor or consideration in
their industry. Hence, it argued that it should not be included in the
coverage of RA 6657 which covers “agricultural lands”.
Issue: Whether or not certain provisions of RA 6657 is
unconstitutional for including in its definition of “Agriculture” the
livestock and poultry industry?
Ruling: The Court held YES.
Looking into the transcript of the Constitutional Commission on the
meaning of the word “agriculture”, it showed that the framers never
intended to include livestock and poultry industry in the coverage of
government.
Further, Commissioner Tadeo pointed out that the reason why they
used the term “farmworkers” rather than “agricultural workers” in
the said law is because “agricultural workers” includes the livestock
and poultry industry, hence, since they do not intend to include the
latter, they used “farmworkers” to have distinction.
Hence, there is merit on the petitioner’s argument that the product-
sharing plan applied to “corporate farms” in the contested provisions
is unreasonable for being consficatory and violative of the due
process of law.
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Central Mindanao University vs. Department of Agrarian Reform
Facts:
On 16 January 1958, President Carlos Garcia issued Proclamation No.
467 reserving for the Mindanao Agricultural College, now the CMU, a
piece of land to be used as its future campus.
In 1984, CMU embarked on a project titled "Kilusang Sariling Sikap"
wherein parcels of land were leased to its faculty members and
employees. Under the terms of the program, CMU will assist faculty
members and employee groups through the extension of technical
know-how, training and other kinds of assistance. In turn, they paid
the CMU a service fee for use of the land. The agreement explicitly
provided that there will be no tenancy relationship between the
lessees and the CMU.
When the program was terminated, a case was filed by the
participants of the "Kilusang Sariling Sikap" for declaration of status
as tenants under the CARP. In its resolution, DARAB, ordered, among
others, the segregation of 400 hectares of the land for distribution
under CARP. The land was subjected to coverage on the basis of
DAR's determination that the lands do not meet the condition for
exemption, that is, it is not "actually, directly, and exclusively used"
for educational purposes.
Issue:
Is the CMU land covered by CARP? Who determines whether lands
reserved for public use by presidential proclamation is no longer
actually, directly and exclusively used and necessary for the purpose
for which they are reserved?
Held:
The land is exempted from CARP. CMU is in the best position to
resolve and answer the question of when and what lands are found
necessary for its use. The Court also chided the DARAB for resolving
this issue of exemption on the basis of "CMU's present needs." The
Court stated that the DARAB decision stating that for the land to be
exempt it must be "presently, actively exploited and utilized by the
university in carrying out its present educational program with its
present student population and academic faculty" overlooked the
very significant factor of growth of the university in the years to
come.
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Natalia Realty, Inc. vs. Department of Agrarian Reform
225 SCRA 278 (1993)
Facts:
Petitioner Natalia Realty, Inc. is the owner of a 125.0078-ha land set
aside by Presidential Proclamation No. 1637 (1979) as townsite area
for the Lungsod Silangan Reservation. Estate Developers and
Investors Corporation (EDIC), the developer of the area, was granted
preliminary approval and locational clearances by the then Human
Settlements Regulatory Commission (HSRC) for the establishment of
the Antipolo Hills Subdivision therein. In November 1990, a Notice of
Coverage was issued by DAR on the undeveloped portion of the
landholding. The developer filed its objections and filed this case
imputing grave abuse of discretion to respondent DAR for including
the undeveloped portions of its landholding within the coverage of
CARP.
Issue:
Are lands already classified for residential, commercial or industrial
use, and approved by HLURB and its precursor agencies prior to 15
June 1988, covered by RA 6657?
Held:
Sec. 4 of RA 6657 states that the CARL covers "regardless of tenurial
arrangement and commodity produced, all public and private and
agricultural lands" and as per the transcripts of the Constitutional
Commission, "agricultural lands" covered by agrarian reform refers
only to those which are "arable and suitable lands" and "do not
include commercial, industrial and residential lands." The land
subject of the controversy has been set aside for the Lungsod
Silangan Reservation by Proclamation No. 1637 prior to the
effectivity of RA 6657 and in effect converted these lands into
residential use. Since the Natalia lands were converted prior to 15
June 1988, DAR is bound by such conversion, and thus it was an error
to include these within the coverage of CARL.
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DAR vs Sutton
Facts:
Respondent inherited a land in Aroroy, Masbate devoted exclusively
to cow and calf breeding. On October 26, 1987, pursuant to the
existing agrarian reform program of the government, respondent
made a voluntary offer to sell (VOS) their landholdings to petitioner
DAR to avail incentives under the law.
On June 10, 1988, a new agrarian law, RA 6657 known as
Comprehensive Agrarian Reform Law (CARL) of 1988 took effect. It
included in its coverage farms used for raising livestock, poultry and
swine.
An en banc decision in the case of Luz Farms vs. Secretary of DAR,
ruled that land devoted to livestock and poultry-raising are not
included in the definition of agricultural land.
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.
DAR issue A.O No. 9, series of 1993, which provided that only portion
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 animal-land ratio and the
ration of 1.7815 hectares for livestock infrastructure for every 21
heads of cattle shall likewise be excluded from the operation of the
CARL.
DAR Secretary Garilao issue an Order partially granting the
application of respondents for exemption from the coverage of CARL
applying the retention limit outlined in the DAR A.O No. 9. Petitioner
ordered the rest of respondents’ landholding to be segregated and
placed under Compulsory Acquisition.
On October 2001, the Office of the President affirmed the impugned
Order of petitioner DAR. It ruled that DAR A.O. no. 9 does not run
counter to the Luz Farm case as the A.O provided the guidelines to
determine whether a certain parcel of land is being used for cattle-
raising.
Issue:
Whether DAR A.O No.9 is unconstitutional?
Held:
Administrative agencies are endowed with powers legislative in
nature. They have been granted by Congress with the authority to
issue rules to regulate the implementation of a law entrusted to
them. Delegated rule-making has become a practical necessity in
modern governance due to the increasing complexity and variety of
public functions. However, while administrative rules and
regulations have the force and effect of law, they are not immune
from judicial review. They may be properly challenged before the
courts to ensure that they do not violate the Constitution and no
grave abuse of administrative discretion is committed by the
administrative body concerned.
The fundamental rule in administrative law is that, to be valid,
administrative rules and regulations must be issued by authority of a
law and must not contravene the provisions of the Constitution. The
rule-making power of an administrative agency may not be used to
abridge the authority given to it by Congress or by the Constitution.
Nor can it be used to enlarge the power of the administrative agency
beyond the scope intended. Constitutional and statutory provisions
control with respect to what rules and regulations may be
promulgated by administrative agencies and the scope of their
regulations.
In the case at bar, SC 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.
terms “agricultural activity” and “commercial farming” by dropping
from its coverage lands that are devoted to commercial livestock,
poultry and swine-raising. With this significant modification,
Congress clearly sought to align the provisions of our agrarian laws
with the intent of the 1987 Constitutional Commission to exclude
livestock farms from the coverage of agrarian reform.

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.

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.

It is a fundamental rule of statutory construction that the

reenactment of a statute by Congress without substantial change is
an implied legislative approval and adoption of the previous law. On
the other hand, by making a new law, Congress seeks to supersede
an earlier one. In the case at bar, after the passage of the 1988 CARL,
Congress enacted R.A. No. 7881 which amended certain provisions of
the CARL. Specifically, the new law changed the definition of the