Republic v. Lopez Agri-Business Corp.
G.R. No. 178895, 179071 (January 10, 2011)
Facts:
The case involves two petitions concerning the application for exemption of four parcels of land owned by Salvador N. Lopez Agri-Business Corporation (SNLABC) from the coverage of the Comprehensive Agrarian Reform Law (CARL) under Republic Act No. 6657. The lands in question are located in Mati, Davao Oriental, and have a total area of 160.1161 hectares. The parcels are identified as follows:
- TCT No. T-12635 (Lot 1454-A & 1296) - 49.5706 hectares
- TCT No. T-12637 (Lot 1298) - 42.6822 hectares
- TCT No. T-12639 (Lot 1293-B) - 67.8633 hectares
On August 2, 1991, the Municipal Agrarian Reform Officer (MARO) issued a Notice of Coverage for these lands, placing them under compulsory acquisition. Subsequently, on December 10, 1992, SNLABC filed an application for exemption for TCT Nos. T-12637 and T-12639, claiming that these lands were used for livestock grazing prior to the enactment of CARL. The MARO conducted an onsite investigation, confirming the presence of livestock and recommending exemption for the two parcels.
However, SNLABC's applications for exemption for Lots 1454-A and 1296 were denied by the DAR Regional Director, who found insufficient evidence that these lots were exclusively used for livestock. The Regional Director's decision was upheld by the DAR Secretary, leading to SNLABC's appeal to the Court of Appeals, which partially granted the exemption for the Lopez lands but upheld the denial for the Limot lands.
Both the Department of Agrarian Reform (DAR) and SNLABC filed separate petitions to the Supreme Court, challenging the Court of Appeals' decision.
Legal Issues:
- Whether the Lopez lands (TCT Nos. T-12637 and T-12639) can be considered grazing lands for SNLABC's livestock business and thus exempt from CARL coverage.
- Whether the Limot lands (TCT Nos. T-12635) are subject to CARL coverage due to their agricultural use.
Arguments:
Petitioner (DAR): The DAR contended that the Court of Appeals erred in exempting the Lopez lands from CARL coverage, arguing that the MARO's findings were not supported by substantial evidence. They claimed that the lands were primarily agricultural and that SNLABC's incorporation shortly before the CARL's enactment indicated an intent to evade agrarian reform.
Respondent (SNLABC): SNLABC argued that the Lopez lands had been used for livestock grazing prior to the CARL's enactment and thus qualified for exemption. They asserted that the MARO's investigation confirmed the lands' use for livestock and that the timing of their incorporation was irrelevant to the land's actual use.
Court's Decision and Legal Reasoning:
The Supreme Court dismissed both petitions, affirming the Court of Appeals' decision. The Court found that the Lopez lands were indeed used for livestock and thus exempt from CARP coverage. The Court emphasized the importance of the MARO's on-site investigation, which provided substantial evidence of the lands' use for livestock prior to the CARL's enactment. The Court reiterated the principle established in Luz Farms v. DAR, which classified lands devoted to livestock as industrial rather than agricultural, thus exempting them from agrarian reform.
Conversely, the Court upheld the inclusion of the Limot lands under CARP coverage, noting that these lands were primarily used for agricultural purposes, specifically for coconut and rubber cultivation. The Court found that SNLABC's application for exemption for the Limot lands was belated and lacked sufficient evidence to demonstrate their use for livestock.
Significant Legal Principles Established:
- Lands devoted to livestock raising are classified as industrial and are exempt from CARP coverage, as established in Luz Farms v. DAR.
- The findings of administrative officials, particularly the MARO, are accorded great weight and respect, especially when supported by substantial evidence.
- The classification of land in tax declarations is not conclusive and does not preclude further inquiry into the actual use of the land.