Milestone Farms v. Office of the President
REITERATIONFacts
1. The Antecedents: Petitioner Milestone Farms, Inc. (Milestone Farms) was incorporated in 1960 with secondary purposes including the raising of livestock, poultry, and swine, and acquiring land for these purposes. Upon the effectivity of Republic Act No. 6657 (Comprehensive Agrarian Reform Law or CARL) on June 10, 1988, which included livestock raising within its coverage, Milestone Farms applied for the exemption of its 316.0422-hectare property in Baras, Rizal, from CARP coverage. This application was based on the Supreme Court's ruling in Luz Farms v. Secretary of the Department of Agrarian Reform, which excluded agricultural lands devoted to livestock, poultry, and swine raising from CARP. The Department of Agrarian Reform (DAR) issued Administrative Order No. 9 in 1993 to govern such exclusions. 2. Procedural History: Initially, DAR Regional Director Percival Dalugdug recommended and issued an order exempting the entire 316.0422-hectare property. However, farmer groups appealed, and DAR Secretary Ernesto D. Garilao, applying specific animal-land and infrastructure-animal ratios, issued an order in 1997 exempting only 240.9776 hectares and placing 75.0646 hectares under CARP. Milestone Farms' motion for reconsideration was denied. The case then moved to the Office of the President (OP), which initially reinstated the Director's order but later set aside its decision, reinstating the DAR Secretary's order. Milestone Farms then appealed to the Court of Appeals (CA). The CA initially granted the petition, reinstating the OP's February 4, 2000 decision exempting the entire property. However, subsequent developments, including a DAR Conversion Order for a portion of the property and new evidence presented by farmer groups, led the CA to amend its decision. In its amended decision, the CA lifted the exemption for the remaining 162.7373 hectares, declaring it covered by CARP, citing evidence that the property was no longer exclusively used for livestock farming. 3. The Petition: Milestone Farms filed a Petition for Review on Certiorari under Rule 45 of the Rules of Civil Procedure, seeking to reverse the CA's Amended Decision dated October 4, 2006, and its Resolution dated March 27, 2008. The petition argues that lands devoted to livestock farming, as defined by Luz Farms and Sutton, are exempt from CARL coverage and are considered industrial, not agricultural, lands. Milestone Farms contends that the CA erred in holding that these exempt lands are subject to DAR's continuing verification and may be reverted to agricultural classification. It asserts that the DAR lacks jurisdiction over such matters once a land is declared exempt and that the CA improperly assumed the role of a trier of facts. Furthermore, Milestone Farms disputes the CA's finding that the property is no longer used for livestock farming, arguing that the evidence presented by the farmer groups and the MARO reports were either improperly admitted or contradicted by other findings, and that the certificates of ownership for cattle were issued after the exemption was lifted, suggesting an attempt to create a semblance of livestock operation.
Issue(s)
Whether the Court of Appeals gravely erred in holding that lands devoted to livestock farming are subject to the DAR’s continuing verification as to use, and may be ordered reverted to agricultural classification and compulsory acquisition. Whether the proceedings for reversion of exempt lands belong to the exclusive original jurisdiction of the DAR, and not the Court of Appeals exercising appellate jurisdiction. Whether the Court of Appeals gravely erred and committed grave abuse of discretion in holding that the property in dispute is no longer being used for livestock farming.
Ruling
The Petition is denied. The Court of Appeals' Amended Decision dated October 4, 2006, and Resolution dated March 27, 2008, are affirmed. The exemption of the 162.7373-hectare agricultural portion of the subject landholding from the coverage of the Comprehensive Agrarian Reform Program is lifted, and this portion is declared covered by the Comprehensive Agrarian Reform Program.
Ratio Decidendi
On the issue of continuing verification and reversion of exempt lands: The Court held that while lands exclusively devoted to livestock, poultry, and swine raising are considered industrial and excluded from CARP coverage, this exemption is not absolute and is subject to continuing verification by the DAR. The DAR, as the lead agency in agrarian reform implementation, retains the authority to determine the applicability of CARP coverage based on the actual use of the land. The declaration of DAR Administrative Order No. 9 (DAR A.O. No. 9) as unconstitutional did not divest the DAR of its inherent power to oversee and verify the use of lands claimed to be exempt. The CA's amended decision was justified by new evidence showing the property was no longer exclusively used for livestock farming, thus warranting its inclusion in CARP. On the jurisdiction of the Court of Appeals versus the DAR: The Court affirmed that issues of exclusion and/or exemption are Agrarian Law Implementation (ALI) cases falling under the DAR Secretary's competence and jurisdiction. However, the CA, in exercising its appellate jurisdiction under Rule 43 of the Rules of Civil Procedure, can, in the interest of justice, entertain and resolve factual issues, especially when new evidence emerges. The CA did not usurp the DAR's jurisdiction but rather reviewed the factual findings in light of the evidence presented, including those that arose after the initial DAR rulings. The Court emphasized that procedural rules are meant to serve substantial justice, and a deviation from rigid enforcement may be allowed. On whether the property is still used for livestock farming: The Court found substantial evidence supporting the CA's conclusion that the property was no longer exclusively devoted to livestock farming. Petitioner's admission of leasing another ranch for its livestock since 2001, coupled with the lack of police or barangay reports regarding alleged harm to its cattle by occupants, weakened its claim. Furthermore, the Certificates of Ownership of Large Cattle submitted by petitioner were dated after the CA lifted the exemption, suggesting an effort to create a semblance of livestock operation. The MARO reports and the Investigating Team's report, while having some differences, consistently indicated that the cattle, though owned by petitioner, were pastured outside the subject property. The conversion of a significant portion of the property for residential and golf course use further supported the finding that it was no longer exclusively a livestock farm.
Main Doctrine
Lands exclusively devoted to livestock, poultry, and swine raising are industrial activities and are excluded from the coverage of the Comprehensive Agrarian Reform Program (CARP). However, the exemption is not absolute and is subject to continuing verification by the Department of Agrarian Reform (DAR) to ensure that the property is indeed and exclusively used for such purposes. The DAR retains jurisdiction to determine the applicability of CARP coverage based on the actual use of the land.