G.R. No. 169277 February 9, 2007
Department of Agrarian Reform, represented by OIC-Secretary Nasser C. Pangandaman, Petitioner, vs. Vicente K. Uy, Respondent.

FACTS

Respondent Vicente K. Uy and co-owners applied for the exclusion of their 349.9996-hectare landholding from CARP coverage, claiming it was exclusively used for livestock-raising prior to June 15, 1988, as per the Luz Farms ruling. A DAR Task Force inspection confirmed the presence of livestock but also found the land was tenanted and planted with coconuts. The DAR Secretary issued an Order exempting only 219.50 hectares, applying the land-to-animal ratios under DAR Administrative Order No. 9, and placing the remaining area under CARP. The Office of the President affirmed this decision.
The Court of Appeals reversed the OP and DAR rulings. The CA held that the entire property should be excluded, finding that DAR A.O. No. 9 and its prescribed ratios could not restrict the constitutional and jurisprudential exclusion established in Luz Farms. The CA ruled that once a land is proven to be devoted to livestock, poultry, or swine raising as of June 15, 1988, it is entirely excluded from CARP, and the DAR cannot place portions under coverage by applying administrative ratios.

ISSUE

Whether the Court of Appeals erred in ruling that the entire landholding should be excluded from CARP coverage, thereby nullifying the DAR’s application of its administrative ratios to determine the area reasonably and exclusively used for livestock-raising.

RULING

The Supreme Court granted the petition and reinstated the DAR and OP rulings. The Court clarified that the constitutional and Luz Farms exclusion only applies to lands “exclusively, directly, and actually” used for livestock, poultry, or swine raising. This requires a factual determination of the area meeting this legal standard. DAR A.O. No. 9, which provides guidelines and ratios for determining this exclusive area, is a valid exercise of the DAR’s quasi-legislative power to prevent circumvention of CARP. The ratios are evidentiary tools to ascertain if the entire landholding or only a portion is devoted to the excluded purpose.
The Court held that the CA erred in ruling that proof of livestock activity automatically exempts the entire land. The law excludes only the area exclusively used for the purpose. The DAR’s factual finding, based on its ocular inspection and application of the ratios, that only 219.50 hectares were exclusively used for livestock, while the rest was tenanted and planted to coconuts, was supported by evidence. Thus, the DAR correctly excluded only that portion and placed the remainder, which was not exclusively devoted to livestock, under CARP coverage. The administrative order and its ratios do not amend the law but implement it by providing a reasonable method to prevent fraudulent claims for exclusion.