Luz Farms vs. Secretary, Department of Agrarian Reform

Facts:

Luz Farms, a corporation engaged in livestock and poultry production, filed a petition for prohibition with a prayer for restraining order and/or preliminary and permanent injunction against the Secretary of the Department of Agrarian Reform (DAR), attacking provisions of R.A. No. 6657 (Comprehensive Agrarian Reform Law of 1988) and the DAR’s implementing Guidelines and Rules insofar as they applied to livestock, poultry and swine raisers.

The legislative and administrative chronology is: on June 10, 1988, R.A. No. 6657 was approved; on January 2, 1989, the DAR promulgated the Guidelines and Procedures Implementing Production and Profit Sharing (Sections 13 and 32); and on January 9, 1989, the DAR issued Rules and Regulations implementing Section 11 (commercial farms). Luz Farms alleged that Sections 3(b), 11, 13, 16(d), 17 and 32, and the DAR guidelines and rules, would adversely affect commercial livestock and poultry raisers and sought declaratory and injunctive relief against their enforcement insofar as they applied to petitioner.

Procedurally, the Court initially denied Luz Farms’ request for a preliminary injunction in a July 4, 1989 Resolution, but after reconsideration granted injunctive relief on August 24, 1989 upon posting of a P100,000 injunction bond and gave the petition due course, requiring memoranda. Luz Farms filed its memorandum on September 6, 1989; the Solicitor General adopted his Comment as his Memorandum on December 22, 1989. The petition was brought as one for prohibition with ancillary injunctive prayers and reached the Supreme Court for resolution of the constitutional issues raised.

Luz Farms did not attack R.A. No. 6657 in toto and acknowledged Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform (G.R. 78742) upholding the law generally; rather, it argued Congress exceeded the Constitution by including land devoted to raising livestock, poultry and swine within the CARP coverage and by requiring production-sharing plans (Sections 13 and 32) compelling distribution of 3% of gross sales and 10% of net profit to workers. The DAR defended inclusion of livestock and poultry within “agriculture,” citing dictionary definitions and maintaining the congressional enactments and implementing rules were valid.

The Court examined the text of Article XIII, Section 4 of the 1987 Constitution, the ordinary meaning of constitutional terms, and the transcripts of the 1986 Constitutional Commission debates (including statements by Commissioners Jamir, Regalado and Tadeo) to determ...(Pro-only)

Issues:

• Did the Court have jurisdiction to resolve the constitutional challenges raised by Luz Farms (i.e., were the justiciability requirements for a constitutional inquiry present)?
• Whether Sections 3(b), 11, 13 and 32 of R.A. No. 6657 and the DAR implementing Guidelines and Rules are constitutional insofar as they include the raising of livestock, poultry and swine within the coverage of the Comprehensive Agrarian Reform Program.
• Whether the production- and profit-sharing requirements (Sections 13 and 32) as applied to corporate livestock and poultry farms are unreaso...(Pro-only)

Ruling:

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Ratio:

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Doctrine:

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