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Milestone Farm vs. OP
Milestone Farm vs. OP
Nachura)
(Petition for Review on Certiorari seeking the reversal of the Court of Appeals (CA) Amended Decision.)
Facts: Milestone Farms was incorporated with the SEC since 1960. In 1988, R.A. 6657 or the Comprehensive
Agrarian Reform Law took effects which included the raising of livestock, poultry, and swine in its coverage.
However, on December 1990, the Court in Luz Farms v. Dec. of DAR ruled that agricultural lands devoted to
livestock, poultry, and/or swine raising are excluded from the CARP. Thus, in May 1993, the petitioner applied
for exemption/exclusion of its 316.0422-hectare property. Meanwhile, on Dec. 27, 1993, DAR issued A.O. No.
9 setting forth rules to govern the exclusion of agricultural lands used for livestock, poultry, and swine raising
from CARP coverage.
DAR’s Land Use Conversion and Exemption Committee (LUCEC) conducted an ocular inspection on petitioner’s
property and recommended the exemption of petitioner’s 316.0422-hectare property from the coverage of
CARP. DAR Regional Director Percival Dalugdug adopted LUCEC’s recommendation. Pinugay Farmers,
represented by Balajadia, moved for reconsideration but was denied by Director Dalugdug. Hence, they filed
an appeal with DAR Secretary. Correlatively, Milestone Farms filed a complaint for Forcible Entry against
Balajadia and company before the MCTC. MCTC ruled in favor of the petitioner but was reversed by the RTC.
The CA reinstated MCTC’s ruling.
DAR Secretary Garilao issued an Order exempting from CARP only 240.9776 hectares of the 316.0422 hectares
previously exempted by Director Dalugdug, and declaring 75.0646 hectares of the property to be covered by
CARP. The Office of the President primarily reinstated the decision of Director Dalugdug but when the farmers
filed a motion for reconsideration, Office of the President reinstated the decision of Director Garilao stating
that when it comes to proof of ownership, the reference is the Certificate of Ownership of Large Cattle. On
April 2005, CA initially ruled in favor of Milestone in exempting the entire property from the coverage of CARP.
However, six months earlier on November 2004, without the knowledge of the CA – as the parties did not
inform the appellate court – then DAR Secretary Villa issued DAR conversion order granting petitioner’s
application to convert portions of the 316.0422-hectare property from agricultural to residential and golf
courses use. The portions converted was with a total area of 153.3049 hectares. With this Conversion Order,
the area of the property subject of the controversy was effectively reduced to 162.7373 hectares. Thus,
Motions for Reconsideration were filed by farmer-groups. CA acknowledged that the property subject of the
controversy would now be limited to the remaining 162.7373 hectares. CA amended its earlier decision. It
stated that the subject landholding from the coverage of CARP is hereby lifted, and the 162.7373 hectare-
agricultural portion thereof is hereby declared covered by the CARP.
ISSUE: Whether or not Milestone’s property should be exempted from the coverage of CARP
HELD: No. When CA made its decision, DAR AO No. 9 was not yet declared unconstitutional by the Supreme
Court. Thus, it could not be said that the CA erred or gravely abused its discretion in respecting the mandate of
DAR A.O. No. 9, which was then subsisting and in full force and effect. As correctly held by respondent OP, the
CA correctly held that the subject property is not exempt from the coverage of the CARP, as substantial pieces
of evidence show that the said property is not exclusively devoted to livestock, swine, and/or poultry raising.
Furthermore, it is established that issues of Exclusion and/or Exemption are characterized as Agrarian Law
Implementation (ALI) cases which are well within the DAR Secretary’s competence and jurisdiction. Thus, we
cannot, without going against the law, arbitrarily strip the DAR Secretary of his legal mandate to exercise
jurisdiction and authority over all ALI cases.