Case Digest: Republic vs. Salvador N. Lopez Agri Business Corp. G.R. No. 178895, Jan. 10, 2011,639 SCRA 49 (2011)

Republic vs. Salvador N. Lopez Agri Business Corp.
G.R. No. 178895, Jan. 10, 2011,
639 SCRA 49 (2011)

Facts:
Subject of this petition are four (4) parcels of land with an aggregate area of 160.1161 hectares registered in the name of Salvador N. Lopez AgriBusiness Corporation. Said parcels of land are hereinafter described as follows:Lot No. 1293-B Psd-65835 under TCT No. T12639 except Lot No. 1298, Cad. 286 of TCT No. T12637 which is already covered under the Compulsory Acquisition (CA) Scheme and had already been valued by the Land Valuation Office, Land Bank of the Philippines.

On June 24, 1993, TCT No. T12635 covering Lots 1454A and 1296 was cancelled and a new one issued in the name of the Republic of the Philippines under RP T16356. On February 7, 1994, petitioner through its President, Salvador N. Lopez, Jr., executed a letter affidavit addressed to the respondent Secretary requesting for the exclusion from CARP coverage of Lots 1454A and 1296 on the ground that they needed the additional area for its livestock business. On March 28, 1995, petitioner filed before the DAR Regional Director of Davao City an application for the exemption from CARP coverage of Lots 1454A and 1296 stating that it has been operating grazing lands even prior to June 15, 1988 and that the said two (2) lots form an integral part of its grazing land.
The DAR Regional Director, after inspecting the properties, issued an Order dated March 5, 1997 denying the application for exemption of Lots 1454A and 1296 on the ground that it was not clearly shown that the same were actually, directly and exclusively used for livestock raising since in its application, petitioner itself admitted that it needs the lots for additional grazing area. The application for exemption, however of the other two (2) parcels of land was approved.

On its partial motion for reconsideration, petitioner argued that Lots 1454A and 1296 were taken beyond the operation of the CARP pursuant to its reclassification to a Pollutive Industrial District (Heavy Industry) per Resolution No. 39 of the Sangguniang Bayan of Mati, Davao Oriental, enacted on April 7, 1992. The DAR Regional Director denied the Motion.
The petitioner appealed the Regional Directors Orders to respondent DAR. On June 10, 1998, the latter issued its assailed Order affirming the Regional Directors ruling on Lots 1454A and 1296 and further declared Lots 1298 and 1293B as covered by the CARP.
On October 17, 2002, petitioners Motion for Reconsideration was denied by respondent prompting the former to file the instant petition.
The Court of Appeals partially granted the SNLABC Petition and excluded the two (2) parcels of land (Transfer Certificate of Title [TCT] Nos. T12637 and T12639) located in Barrio Don Enrique Lopez (the Lopez lands) from coverage of the CARL.
However, it upheld the Decisions of the Regional Director and the DAR Secretary denying the application for exemption withrespect to Lots 1454A and 1296 (previously under TCT No. T12635) in Barrio Limot (the Limot lands). These lots were already covered by a new title under the name of the Republic of the Philippines (RP T16356). The DAR and SNLABC separately sought a partial reconsideration of the assailed Decision of the Court of Appeals, but their motions for reconsideration were subsequently denied.

Issue:
Whether or not 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 under the Court’s ruling in Luz Farms v. DAR.

Held:
The Lopez lands of SNLABC are actually and directly being used for livestock and are thus exempted from the coverage of the CARL. However, the Limot lands of SNLABC are not actually and directly being used for livestock and should thus be covered by the CARL.

In Luz Farms v. Secretary of the Department of Agrarian Reform, the Court declared unconstitutional the CARL provisions that included lands devoted to livestock under the coverage of the CARP.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 existence of the cattle prior to the enactment of the CARL was positively affirmed by the farm workers and the overseer who were interviewed by the MARO. Considering these factual findings and the fact that the lands were in fact being used for SNLABC’s livestock business even prior to 15 June 1988, the DAR Regional Director ordered the exemption of the Lopez lands from CARP coverage. 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.
The tax declarations of the Lopez lands as agricultural lands are not conclusive or final, so as to prevent their exclusion from CARP coverage as lands devoted to livestock-raising. Indeed, the MARO’s on-site inspection and actual investigation showing that the Lopez lands were being used for livestock-grazing are more convincing in the determination of the nature of those lands. 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.
Verily, the MARO itself, in the Investigation Report cited by no less than SNLABC, found that the livestock were only moved to the Limot lands sporadically and were not permanently designated there. The DAR Secretary even described SNLABC’s use of the area as a "seasonal extension of the applicant’s ‘grazing lands’ during the summer." Therefore, the Limot lands cannot be claimed to have been actually, directly and exclusively used for SNLABC’s livestock business, especially since these were only intermittently and secondarily used as grazing areas. The said lands are more suitable -- and are in fact actually, directly and exclusively being used -- for agricultural purposes.