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Supreme Court of the Philippines

270 Phil. 151

EN BANC
G.R. No. 86889, December 04, 1990
LUZ FARMS, PETITIONER, VS. THE HONORABLE
SECRETARY OF THE DEPARTMENT OF AGRARIAN
REFORM, RESPONDENT.
DECISION
PARAS, J.:
This is a petition for prohibition with prayer for restraining order and/or preliminary and
permanent injunction against the Honorable Secretary of the Department of Agrarian
Reform for acting without jurisdiction in enforcing the assailed provisions of R.A. No. 6657,
otherwise known as the Comprehensive Agrarian Reform Law of 1988 and in
promulgating the Guidelines and Procedure Implementing Production and Profit Sharing
under R.A. No. 6657, insofar as the same apply to herein petitioner, and further from
performing an act in violation of the constitutional rights of the petitioner.
As gathered from the records, the factual background of this case, is as follows:
On June 10, 1988, the President of the Philippines approved R.A. No. 6657, which
includes the raising of livestock, poultry and swine in its coverage (Rollo, p. 80).
On January 2, 1989, the Secretary of Agrarian Reform promulgated the Guidelines
and Procedures Implementing Production and Profit Sharing as embodied in Sections 13
and 32 of R.A. No. 6657 (Rollo, p. 80).
On January 9, 1989, the Secretary of Agrarian Reform promulgated its Rules and
Regulations implementing Section 11 of R.A. No. 6657 (Commercial Farms). (Rollo, p.
81).
Luz Farms, petitioner in this case, is a corporation engaged in the livestock and
poultry business and together with others in the same business allegedly stands to be
adversely affected by the enforcement of Section 3(b), Section 11, Section 13, Section
16(d) and 17 and Section 32 of R.A. No. 6657 otherwise known as Comprehensive
Agrarian Reform Law and of the Guidelines and Procedures Implementing Production and
Profit Sharing under R.A. No. 6657 promulgated on January 2, 1989 and the Rules and
Regulations Implementing Section 11 thereof as promulgated by the DAR on January 9,
1989 (Rollo, pp. 2-36).

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Hence, this petition praying that aforesaid laws, guidelines and rules be declared
unconstitutional. Meanwhile, it is also prayed that a writ of preliminary injunction or
restraining order be issued enjoining public respondents from enforcing the same, insofar
as they are made to apply to Luz Farms and other livestock and poultry raisers.
This Court in its Resolution dated July 4, 1989 resolved to deny, among others, Luz
Farms’ prayer the issuance of a preliminary injunction in its Manifestation dated May 26
and 31, 1989. (Rollo, p. 98).
Later, however, this Court in its Resolution dated August 24, 1989 resolved to grant
said Motion for Reconsideration regarding the injunctive relief, after the filing and approval
by this Court of an injunction bond in the amount of P100,000.00. This Court also gave
due course to the petition and required the parties to file their respective memoranda
(Rollo, p. 119).
The petitioner filed its Memorandum on September 6, 1989 (Rollo, pp. 131-168).
On December 22, 1989, the Solicitor General adopted his Comment to the petition as
his Memorandum (Rollo, pp. 186-187).
Luz Farms questions the following provisions of R.A. 6657, insofar as they are made
to apply to it:

(a)   Section 3(b) which includes the “raising of livestock (and poultry)”
in the definition of “Agricultural, Agricultural Enterprise or Agricultural
Activity.”

(b)    Section 11 which defines “commercial farms” as “private

agricultural lands devoted to commercial, livestock, poultry and swine
raising x x x.”

(c)    Section 13 which calls upon petitioner to execute a production-

sharing plan.

(d)    Section 16(d) and 17 which vest on the Department of Agrarian

Reform the authority to summarily determine the just compensation to
be paid for lands covered by the Comprehensive Agrarian Reform Law.

(e)   Section 32 which spells out the production-snaring plan mentioned

in Section 13 -?

"x x x (W)hereby three percent (3%) of the gross sales from the production of
such lands are distributed within sixty (60) days of the end of the fiscal year as
compensation to regular and other farmworkers in such lands over and above the
compensation they currently receive:  Provided, That these individuals or entities
realize gross sales in excess of five million pesos per annum unless the DAR, upon
proper application, determine a lower ceiling.

In the event that the individual or entity realizes a profit, an additional ten (10%)
of the net profit after tax shall be distributed to said regular and other
farmworkers within ninety (90) days of the end of the fiscal year.  x x x."
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The main issue in this petition is the constitutionality of Sections 3(b), 11, 13 and 32 of
R.A. No. 6657 (the Comprehensive Agrarian Reform Law of 1988), insofar as the said law
includes the raising of livestock, poultry and swine in its coverage as well as the
Implementing Rules and Guidelines promulgated in accordance therewith.
The Constitutional provision under consideration reads as follows:

ARTICLE XIII

xxx                xxx                  xxx

AGRARIAN AND NATURAL RESOURCES REFORM

Section 4.  The State shall, by law, undertake an agrarian reform
program founded on the right of farmers and regular farmworkers, who
are landless, to own directly or collectively the lands they till or, in the
case of other farmworkers, to receive a just share of the fruits thereof. 
To this end, the State shall encourage and undertake the just distribution
of all agricultural lands, subject to such priorities and reasonable
retention limits as the Congress may prescribe, taking into account
ecological, developmental, or equity considerations, and subject to the
payment of just compensation.  In determining retention limits, the
State shall respect the rights of small landowners.  The State shall
further provide incentives for voluntary land-sharing.

xxx                   xxx                   xxx."

Luz Farms contended that it does not seek the nullification of R.A. 6657 in its entirety.
In fact, it acknowledges the correctness of the decision of this Court in the case of the
Association of Small Landowners in the Philippines, Inc. vs. Secretary of Agrarian Reform
(G.R. 78742, 14 July 1989) affirming the constitutionality of the Comprehensive Agrarian
Reform Law. It, however, argued that Congress in enacting the said law has transcended
the mandate of the Constitution, in including land devoted to the raising of livestock,
poultry and swine in its coverage (Rollo, p. 131). Livestock or poultry raising is not similar
to crop or tree farming. Land is not the primary resource in this undertaking and
represents no more than five percent (5%) of the total investment of commercial livestock
and poultry raisers. Indeed, there are many owners of residential lands all over the
country who use available space in their residences for commercial livestock and raising
purposes, under "contract-growing arrangements," whereby they supplement the
requirements of meat processing corporations and other commercial livestock and poultry
raisers (Rollo, p. 10). Lands support the buildings and other amenities attendant to the
raising of animals and birds. The use of land is incidental to but not the principal factor or
consideration in productivity in this industry. Excluding backyard raisers, about 80% of
those in commercial livestock and poultry production occupy five hectares or less. The
remaining 20% are mostly corporate farms (Rollo, p. 11).
On the other hand, the public respondent argued that livestock and poultry raising is
embraced in the term "agriculture" and the inclusion of such enterprise under Section 3(b)
of R.A. 6657 is proper. He cited that Webster's International Dictionary, Second Edition
(1954), defines the following words:
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"Agriculture - the art or science of cultivating the ground and raising

and harvesting crops, often, including also, feeding, breeding and
management of livestock, tillage, husbandry, farming.

It includes farming, horticulture, forestry, dairying, sugarmaking x x x.

Livestock - domestic animals used or raised on a farm, especially for

profit.

Farm - a plot or tract of land devoted to the raising of domestic or

other animals." (Rollo, pp. 82-83).
The petition is impressed with merit.
The question raised is one of constitutional construction. The primary task in
constitutional construction is to ascertain and thereafter assure the realization of the
purpose of the framers in the adoption of the Constitution (J.M. Tuazon & Co. vs. Land
Tenure Administration, 31 SCRA 413 [1970]).
Ascertainment of the meaning of the provision of Constitution begins with the
language of the document itself. The words used in the Constitution are to be given their
ordinary meaning except where technical terms are employed in which case the
significance thus attached to them prevails (J.M. Tuazon & Co. vs. Land Tenure
Administration, 31 SCRA 413 [1970]).
It is generally held that, in construing constitutional provisions which are ambiguous or
of doubtful meaning, the courts may consider the debates in the constitutional convention
as throwing light on the intent of the framers of the Constitution. It is true that the intent of
the convention is not controlling by itself, but as its proceeding was preliminary to the
adoption by the people of the Constitution the understanding of the convention as to what
was meant by the terms of the constitutional provision which was the subject of the
deliberation, goes a long way toward explaining the understanding of the people when
they ratified it (Aquino, Jr. v. Enrile, 59 SCRA 183 [1974]).
The transcripts of the deliberations of the Constitutional Commission of 1986 on the
meaning of the word "agricultural," clearly show that it was never the intention of the
framers of the Constitution to include livestock and poultry industry in the coverage of the
constitutionally-mandated agrarian reform program of the Government.
The Committee adopted the definition of "agricultural land" as defined under Section
186 of R.A. 3844, as land devoted to any growth. Including but not limited to crop lands,
saltbeds, fishponds, idle and abandoned land (Record, CONCOM, August 7, 1986, Vol. III,
p. 11).
The intention of the Committee is to limit the application of the word "agriculture."
Commissioner Jamir proposed to insert the word "ARABLE" to distinguish this kind of
agricultural land from such lands as commercial and industrial lands and residential
properties because all of them fall under the general classification of the word
"agricultural". This proposal, however, was not considered because the Committee
contemplated that agricultural lands are limited to arable and suitable agricultural lands
and therefore, do not include commercial, industrial and residential lands (Record,
CONCOM, August 7, 1986, Vol. III, p. 30).
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In the interpellation, then Commissioner Regalado (now a Supreme Court Justice),

posed several questions, among others, quoted as follows:

xxx                xxx                   xxx

"Line 19 refers to genuine reform program founded on the primary

right of farmers and farmworkers.  I wonder if it means that leasehold
tenancy is thereby proscribed under this provision because it speaks of
the primary right of farmers and farmworkers to own directly or
collectively the lands they till.  As also mentioned by Commissioner
Tadeo, farmworkers include those who work in piggeries and poultry
projects.

I was wondering whether I am wrong in my appreciation that if

somebody puts up a piggery or a poultry project and for that purpose
hires farmworkers therein, these farmworkers will automatically have
the right to own eventually, directly or ultimately or collectively, the land
on which the piggeries and poultry projects were constructed.  (Record,
CONCOM, August 2, 1986, p. 618).

xxx                xxx                   xxx."

The questions were answered and explained in the statement of then Commissioner
Tadeo, quoted as follows:

xxx                xxx                   xxx

"Sa pangalawang katanungan ng Ginoo ay medyo hindi kami

nagkaunawaan.  Ipinaaalam ko kay Commissioner Regalado na hindi
namin inilagay ang agricultural worker sa kadahilanang kasama rito ang
piggery, poultry at livestock workers.  Ang inilagay namin dito ay farm
worker kaya hindi kasama ang piggery, poultry at livestock workers
(Record, CONCOM, August 2, 1986, Vol. II, p. 621).
It is evident from the foregoing discussion that Section II of R.A. 6657 which includes
“private agricultural lands devoted to commercial livestock, poultry and swine raising” in
the definition of "commercial farms" is invalid, to the extent that the aforecited agro-
industrial activities are made to be covered by the agrarian reform program of the State.
There is simply no reason to include livestock and poultry lands in the coverage of
agrarian reform (Rollo, p. 21).
Hence, there is merit in Luz Farms’ argument that the requirement in Sections 13 and
32 of R.A. 6657 directing “corporate farms” which include livestock and poultry raisers to
execute and implement “production-sharing plans” (pending final redistribution of their
landholdings) whereby they are called upon to distribute from three percent (3%) of their
gross sales and ten percent (10%) of their net profits to their workers as additional
compensation is unreasonable for being confiscatory, and therefore violative of due
process (Rollo, p. 21).

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It has been established that this Court will assume jurisdiction over a constitutional
question only if it is shown that the essential requisites of a judicial inquiry into such a
question are first satisfied. Thus, there must be an actual case or controversy involving a
conflict of legal rights susceptible judicial determination, the constitutional question must
have been opportunely raised by the proper party, and the resolution of the question is
unavoidably necessary to the decision of the case itself (Association of Small Landowners
of the Philippines, Inc. v. Secretary of Agrarian Reform, G.R. 78742; Acuna v. Arroyo, G.R.
79310; Pabico v. Juico, G.R. 79744; Manaay v. Juico, G.R. 79777, 14 July 1989, 175
SCRA 343).
However, despite the inhibitions pressing upon the Court when confronted with
constitutional issues, it will not hesitate to declare a law or act invalid when it is convinced
that this must be done. In arriving at this conclusion, its only criterion will be the
Constitution and God as its conscience gives it in the light to probe its meaning and
discover its purpose. Personal motives and political considerations are irrelevancies that
cannot influence its decisions. Blandishment is as ineffectual as intimidation, for all the
awesome power of the Congress and Executive, the Court will not hesitate "to make the
hammer fall heavily," where the acts of these departments, or of any official, betray the
people’s will as expressed in the Constitution (Association of Small Landowners of
Philippines, Inc. v. Secretary of Agrarian Reform, G.R. 78742; Acuna v. Arroyo, G.R.
79310; Pabico v. Juico, G.R. 79744; Manaay v. Juico, G.R. 79777, 14 July 1989).
Thus, where the legislature or the executive acts beyond the scope of its constitutional
powers, it becomes the duty of the judiciary to declare what the other branches of the
government had assumed to do as void. This is the essence of judicial power conferred
by the Constitution "(I)n one Supreme Court and in such lower courts as may be
established by law" (Art. VIII, Section 1 of the 1935 Constitution; Article X, Section I of the
1973 Constitution and which was adopted as part of the Freedom Constitution, and Article
VIII, Section 1 of the 1987 Constitution) and which power this Court has exercised in many
instances (Demetria v. Alba, 148 SCRA 208 [1987]).
PREMISES CONSIDERED, the instant petition is hereby GRANTED. Sections 3(b),
11, 13 and 32 of R.A. No. 6657 insofar as the inclusion of the raising of livestock, poultry
and swine in its coverage as well as the Implementing Rules and Guidelines promulgated
in accordance therewith, are hereby DECLARED null and void for being unconstitutional
and the writ of preliminary injunction issued is hereby MADE permanent.
SO ORDERED.
Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Gancayco, Padilla, Bidin,
Griño-Aquino, Medialdea, and Regalado, JJ., concur.
Feliciano, J., on leave.
Sarmiento, J., see separate opinion.

SEPARATE OPINION

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SARMIENTO, J.:

I agree that the petition be granted.

It is my opinion however that the main issue on the validity of the assailed provisions
of R.A. 6657 (the Comprehensive Agrarian Reform Law of 1988) and its Implementing
Rules and Guidelines insofar as they include the raising of livestock, poultry, and swine in
their coverage can not be simplistically reduced to a question of constitutional
construction.
It is a well-settled rule that construction and interpretation come only after it has been
demonstrated that application is impossible or inadequate without them. A close reading
however of the constitutional text in point, specifically, Sec. 4, Art. XIII, particularly the
phrase, "xxx in case of other farmworkers, to receive a just share of the fruits thereof,"
provides a basis for the clear and possible coverage of livestock, poultry, and swine
raising within the ambit of the comprehensive agrarian reform program. This accords with
the principle that every presumption should be indulged in favor of the constitutionality of a
statute and the court in considering the validity of a statute should give it such reasonable
[1]
construction as can be reached to bring it within the fundamental law.
The presumption against unconstitutionality, I must say, assumes greater weight when
a ruling to the contrary would, in effect, defeat the laudable and noble purpose of the law,
i.e., the welfare of the landless farmers and farmworkers in the promotion of social justice,
by the expedient conversion of agricultural lands into livestock, poultry, and swine raising
by scheming landowners, thus, rendering the comprehensive nature of the agrarian
program merely illusory.
The instant controversy, I submit, boils down to the question of whether or not the
assailed provisions violate the equal protection clause of the Constitution (Article II,
section 1) which teaches simply that all persons or things similarly situated should be
[2]
treated alike, both as to rights conferred and responsibilities imposed.
There is merit in the contention of the petitioner that substantial distinctions exist
between land directed purely to cultivation and harvesting of fruits or crops and land
exclusively used for livestock, poultry and swine raising, that make real differences, to wit:

xxx                              xxx                               xxx

No land is tilled and no crop is harvested in livestock and poultry
farming.  There are no tenants nor landlords, only employers and
employees.
Liverstock and poultry do not sprout from land nor are they "fruits of
the land."

Land is not even a primary resource in this industry.  The land input is
inconsequential that all the commercial hog and poultry farms
combined occupy less than one percent (1%) (0.4% for piggery, 0.2%
for poultry) of the 5.45 million hectares of land supposedly covered by
the CARP.  And most farms utilize only 2 to 5 hectares of land.
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In every respect livestock and poultry production is an industrial

activity.  Its use of an inconsequential portion of land is a mere incident
of its operation, as in any other undertaking, business or otherwise.
The fallacy of defining livestock and poultry production as an
agricultural enterprise is nowhere more evident when one considers that
at least 95% of total investment in these farms is in the form of fixed
assets which are industrial in nature.

These include (1) animal housing structures and facilities complete with
drainage, waterers, blowers, misters and in some cases even piped-in
music; (2) feedmills complete with grinders, mixers, conveyors, exhausts,
generators, etc.; (3) extensive warehousing facilities for feeds and other
supplies; (4) anti-pollution equipment such as bio-gas and digester
plants augmented by lagoons and concrete ponds; (5) deepwells,
elevated water tanks, pumphouses and accessory facilities; (6) modern
equipment such as sprayers, pregnancy testers, etc.; (7) laboratory
facilities complete with expensive tools and equipment; and a myriad
other such technologically advanced appurtenances.
How then can livestock and poultry farmlands be arable when such are
almost totally occupied by these structures?

The fallacy of equating the status of livestock and poultry farmworkers

with that of agricultural tenants surfaces when one considers
contribution to output.  Labor cost of livestock and poultry farms is no
more than 4% of total operating cost.  The 96% balance represents
inputs not obtained from the land nor provided by the farmworkers -- -
inputs such as feeds and biochemicals (80% of the total cost), power
cost, cost of money and several others.

Moreover, livestock and poultry farmworkers are covered by minimum

wage law rather than by tenancy law.  They are entitled to social security
benefits where tenant-farmers are not.  They are paid fixed wages rather
than crop shares.  And as in any other industry, they receive additional
benefits such as allowances, bonuses, and other incentives such as free
housing privileges, light and water.
Equating livestock and poultry farming with other agricultural activities
is also fallacious in the sense that like the manufacturing sector, it is a
market for, rather than a source of agricultural output.  At least 60% of
the entire domestic supply of corn is absorbed by livestock and poultry
farms.  So are the by-products of rice (rice-bran), coconut (copra meal),
[3]
banana (banana pulp meal), and fish (fish meal).
xxx                            xxx                               xxx

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In view of the foregoing, it is clear that both kinds of lands are not similarly situated
and hence, can not be treated alike. Therefore, the assailed provisions which allow for the
inclusion of livestock and poultry industry within the coverage of the agrarian reform
program constitute invalid classification and must accordingly be struck down as
repugnant to the equal protection clause of the Constitution.

[1]
In re Guarina, 24 Phil. 37; Yu Cong Eng v. Trinidad, 70 L. ed., p. 1059.

[2]
Ichong v. Hernandez, 101 Phil. 1155.

[3]
Rollo, 29-30.

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