Department of Agrarian Reform v. Sutton
REITERATIONFacts
The Antecedents: Respondents inherited land in Aroroy, Masbate, which has been devoted exclusively to cow and calf breeding since 1948. On October 26, 1987, respondents made a Voluntary Offer to Sell (VOS) their landholdings to the Department of Agrarian Reform (DAR) to avail of incentives. However, following the 1990 Supreme Court ruling in Luz Farms v. Secretary of DAR, which declared that lands devoted to livestock are not agricultural lands, respondents filed a formal request to withdraw their VOS. Despite a Municipal Agrarian Reform Officer (MARO) inspection confirming the land was used solely for cattle-raising, the DAR ignored the withdrawal request. On December 27, 1993, DAR issued Administrative Order (A.O.) No. 9, series of 1993, which prescribed a 1:1 animal-land ratio for retention limits on livestock farms. Procedural History: On September 14, 1995, the DAR Secretary partially granted respondents' exemption application but applied the retention limits of A.O. No. 9, exempting only 1,209 hectares and ordering the rest to be placed under Compulsory Acquisition. Respondents moved for reconsideration, which was denied. They appealed to the Office of the President (OP), which affirmed the DAR's order on October 9, 2001, but left the issue of the A.O.'s constitutionality to the courts. Respondents then appealed to the Court of Appeals (CA). The CA declared DAR A.O. No. 9, series of 1993, null and void for violating the Constitution. The Petition: The DAR filed a petition for review under Rule 45, arguing that it issued A.O. No. 9 pursuant to its rule-making power under Section 49 of Republic Act (R.A.) No. 6657 (Comprehensive Agrarian Reform Law (CARL)). The DAR contended that the A.O. was necessary to prevent landowners from evading agrarian reform by converting agricultural lands into livestock farms.
Issue(s)
Whether DAR Administrative Order No. 9, series of 1993, is constitutional.
Ruling
The petition is DISMISSED. The Decision and Resolution of the Court of Appeals, declaring DAR Administrative Order No. 9, series of 1993, null and void, are AFFIRMED.
Ratio Decidendi
On Issue 1: The Supreme Court ruled that DAR Administrative Order (A.O.) No. 9, series of 1993, is unconstitutional because it contravenes the intent of the 1987 Constitution. Applying the precedent in Luz Farms v. Secretary of DAR, the Court emphasized that livestock, swine, and poultry-raising are industrial activities, not agricultural ones, and thus fall outside the definition of 'agricultural land' subject to agrarian reform. The Court noted that the 1987 Constitutional Commission explicitly intended to exclude such lands from the Comprehensive Agrarian Reform Law (CARL). Furthermore, the Court held that while administrative agencies possess rule-making powers, they cannot use such powers to enlarge their jurisdiction or abridge constitutional mandates. The DAR exceeded its authority by attempting to regulate and limit the retention of livestock farms that were already exempted by the Constitution. The Court also pointed out that Congress, through Republic Act (R.A.) No. 7881, amended the CARL to align with this constitutional intent by dropping commercial livestock from the definition of 'agricultural activity.' Finally, the Court found no evidence that the respondents were attempting to evade the law, as their cattle-breeding business predated the CARL by decades.
Main Doctrine
Lands devoted to the raising of livestock, poultry, and swine are classified as industrial, not agricultural, and are therefore exempt from the coverage of the Comprehensive Agrarian Reform Law (CARL). Any administrative order, such as Department of Agrarian Reform (DAR) Administrative Order (A.O.) No. 9, series of 1993, which attempts to impose retention limits or animal-to-land ratios on such lands, is unconstitutional as it exceeds the agency's rule-making power and contravenes the intent of the 1987 Constitution. Administrative agencies cannot enlarge the scope of their authority beyond what is provided by the Constitution and the enabling statute.