G.R. No. 182332 ; February 23, 2011
MILESTONE FARMS, INC., Petitioner, vs. OFFICE OF THE PRESIDENT, Respondent.

FACTS

Petitioner Milestone Farms, Inc., incorporated in 1960 with purposes including livestock raising, applied in May 1993 for the exemption/exclusion of its 316.0422-hectare property in Baras, Rizal, from the coverage of the Comprehensive Agrarian Reform Law (CARL), pursuant to the Supreme Court’s ruling in Luz Farms v. Secretary of the Department of Agrarian Reform. The application was re-documented in January 1994 following DAR Administrative Order No. 9, Series of 1993. The DAR’s Land Use Conversion and Exemption Committee (LUCEC) conducted an ocular inspection, found the land utilized for livestock, swine, and poultry, and recommended exemption. The DAR Regional Director issued an Order on June 27, 1994, exempting the entire property. Farmer groups moved for reconsideration and appealed to the DAR Secretary.
On January 21, 1997, then DAR Secretary Ernesto D. Garilao issued an Order exempting only 240.9776 hectares and declaring 75.0646 hectares subject to CARP coverage. The Secretary opined that for exclusion, lands must already be devoted to livestock, poultry, and swine raising as of June 15, 1988 (CARL’s effectivity). Relying on Certificates of Ownership of Large Cattle, he found only 86 heads of cattle registered in the name of petitioner’s president prior to June 15, 1988. Applying DAR A.O. No. 9’s animal-land and infrastructure-animal ratios, he computed the exempt area. Petitioner’s motion for reconsideration, submitting additional certificates and a 1986 disbursement voucher as proof of pre-1988 operations, was denied.
Petitioner appealed to the Office of the President (OP). On February 4, 2000, the OP reinstated the Regional Director’s 1994 Order, declaring the entire property exempt. However, on motions for reconsideration by farmer groups and the DAR, the OP issued a Resolution on September 16, 2002, setting aside its 2000 decision and reinstating Secretary Garilao’s 1997 Orders. The OP held that proof of ownership, such as Certificates of Ownership of Large Cattle, must match the headcount, and that advance notice of inspections allows landowners to temporarily bring in animals, making headcounts unreliable for determining compliance with the June 15, 1988 requirement.

ISSUE

Whether the Office of the President committed reversible error in reinstating the DAR Secretary’s Orders which partially excluded petitioner’s land from CARP coverage, based on the finding that petitioner did not have sufficient proof that the land was actually, directly, and exclusively used for livestock raising as of June 15, 1988.

RULING

The Supreme Court DENIED the petition and AFFIRMED the assailed Amended Decision and Resolution of the Court of Appeals, which upheld the OP’s Resolution reinstating the DAR Secretary’s partial exemption order.
The Court ruled that for private agricultural lands to be excluded from CARP coverage under the Luz Farms doctrine and subsequent laws ( R.A. No. 6657 as amended by R.A. No. 7881 ), they must be actually, directly, and exclusively used for livestock, poultry, or swine raising. The burden of proof rests upon the landowner claiming such exemption. The Court found that the DAR Secretary and the OP correctly required petitioner to prove that its land was devoted to such purposes as of June 15, 1988. The evidence presented by petitioner, primarily the Certificates of Ownership of Large Cattle, was insufficient to prove that the required number of animals to utilize the entire 316-hectare property (based on the prescribed animal-land ratios) existed on the land as of that critical date. The Court upheld the administrative bodies’ factual findings, emphasizing that in a Rule 45 petition, only questions of law are reviewable, and the findings of fact of administrative agencies, when supported by substantial evidence and affirmed by the Court of Appeals, are conclusive and binding. The Court also noted that the DAR has the primary jurisdiction to determine agrarian reform matters, including applications for exemption.