J.A.B. Bulao & Associates

CASE 2011-0037: OFFICE OF THE COURT ADMINISTRATOR VS. FORMER JUDGE LEONARDO L. LEONIDA, OF THE REGIONAL TRIAL COURT BRANCH 27, STA. CRUZ, LAGUNA (A.M. NO. RTJ-09-2198, 18 JANUARY 2011, CORONA, C.J) SUBJECT: FAILURE OF JUDGE TO DECIDE CASES WITHIN THE REGLAMENTARY PERIOD. (BRIEF TITLE: OCA VS. JUDGE LEONIDA)

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D E C I S I O N

Per Curiam:

This administrative case at bench stemmed from a judicial audit and inventory of pending cases conducted by the Office of the Court Administrator (OCA), in Branch 27, Regional Trial Court, Sta. Cruz, Laguna (Branch 27, Sta. Cruz), and in Branch 74, Regional Trial Court, Malabon City (Branch 74, Malabon).

The audits were conducted because respondent Judge Leonardo L. Leonida (Judge Leonida) applied for Optional Retirement effective July 5, 2008.  Judge Leonida was the presiding judge of Branch 27, Sta. Cruz, from October 1997 until his retirement and was detailed as assisting judge of Branch 74, Malabon.

On May 21, 2009, then Court Administrator Jose P. Perez issued a Memorandum^[1][1] on the audit team’s findings, among which are:  

1)     As of audit date, March 5 and 6, 2009, Branch 27, Sta. Cruz had a total caseload of 507 cases consisting of 280 criminal cases and 227 civil cases based on the records actually presented to, and examined by, the audit team. 

2)     Out of the total number of pending criminal cases, no further action was taken after varying considerable periods of time in 14 cases.^[2][2]

3)     Pending incidents and motions filed by parties in 8 criminal cases^[3][3] were left unresolved for more than one (1) year in 3 cases, and three months in 2 cases.

4)     Twenty-nine (29) criminal cases^[4][4] submitted for decision, the earliest in 2001, were undecided.

5)     Of the 227 civil cases lodged in the court, no setting for hearing and no further action was taken on 46 cases.^[5][5]

6)     Twenty-four (24) civil cases^[6][6] have pending motions/incidents awaiting resolution, the earliest since 2002.

7)     Fifty-seven (57) civil cases^[7][7] submitted for decision from 2000 to 2009 were undecided at the time of the audit.  

8)    In the course of the audit in Branch 27, Sta. Cruz, several records of criminal cases were found to be incomplete. The records were not paginated. Certificates of arraignment, minutes of hearings and notices of hearing were missing from the files.

9)    The record of one case, Criminal Case No. 12178,^[8][8] an appealed case submitted for resolution, is missing and is in the possession of Judge Leonida as per certification issued by Atty. Bernadette Platon, the Branch Clerk of Court.^[9][9]

Regarding Branch 74, Malabon City, the OCA also looked into the Monthly Report of Cases submitted by said branch for August-October 2008 and January-March 2008 and noted that 95 criminal cases and 18 civil cases were submitted for decision.^[10][10]   Considering that Judge Leonida applied for Optional Retirement effective July 5, 2008, he should have decided 91 of the 95 submitted criminal cases and 16 of the 18 submitted civil cases.

In sum, Judge Leonida failed to decide 102 criminal cases and 43 civil cases both in Branch 27 and Branch 74, and failed to resolve motions in ten (10) civil cases in Branch 27.

The same report bears the recommendations of the OCA that were eventually adopted by the Court in a Resolution dated July 29, 2009,^[11][11] to wit: 

(1)               RE-DOCKET the judicial audit report as an administrative complaint against former Judge Leonardo L. Leonida for gross incompetence and inefficiency;

(2)              REQUIRE Judge Leonida to MANIFEST whether he is willing to submit the case for decision on the basis of the pleadings/records already filed and submitted, within ten (10) days from notice;

(3)            DIRECT:

(a) Hon. Jaime C. Blancaflor, Acting Presiding Judge, RTC, Branch 27, Sta. Cruz, Laguna to:

(1) TAKE APPROPRIATE ACTION on Criminal Case Nos. xxx which are without further action for a considerable length of time;

(2) RESOLVE with dispatch the pending incidents/motions in Criminal Case Nos. xxx and furnish the Court, through the OCA, a copy of the resolution/order within ten (10) days from issuance/resolution thereof; and

(3)    DECIDE with dispatch Criminal Case Nos. xxx and Furnish the Court, through the OCA, a copy of the decision within ten (10) days from its promulgation; and

(b) Atty. Bernadette Platon, Branch Clerk of Court, to:

(1) APPRISE the Acting Presiding Judge, from time to time, of cases submitted for resolution/decision and those cases that require immediate action;

(2) ORDER the stitching of all orders issued, minutes taken, notices of hearing issued, certificates of arraignment in all appropriate case folders especially those jointly tried, including their chronological arrangement and pagination as well as the proofreading of all orders and notices; and

(3) SUBMIT report of compliance therewith to this Court within fifteen (15) days from notice.

On October 4, 2009, Judge Leonida filed an Urgent Motion for Extension of Time to File Manifest and Memorandum.^[12][12] He cited the short period compounded by the typhoons and floods which ravaged Manila as his reason for requesting an additional period of twenty (20) days within which to file the same.  In its October 28, 2009 Resolution, the Court noted Judge Leonida’s motion.

On October 22, 2009, Judge Leonida filed a Manifest and Memorandum^[13][13] expressing his willingness to submit the case for decision based on the pleadings.  He explained that he failed to finalize and promulgate cases pending in his sala because of the severely clogged docket of Branch 74.  With an overwhelming number of more than 1,000 cases, he calendared an average of 30 cases daily in order to “keep all the cases moving.”  According to Judge Leonida, “the court sessions together with the preparation/correction/review of the orders in the cases set for hearing almost ate up” his time as a judge.  The fact that Branch 74, a commercial court, was still included in the raffle of regular cases exacerbated the situation. Voluminous pleadings requiring extensive dissection and research, and cases involving numerous intervenors who raised different and complex issues, made matters much more difficult that he even had to conduct hearings on applications for search and seizures until nighttime.  Judge Leonida further claimed that his work encroached upon the time he had to devote to his wife and eight children. Finally, the reconstruction and review of case records submerged in flood waters added up to his struggle to expedite the disposition of cases assigned to his court. 

Anent the missing record in Branch 27, Judge Leonida alleged that the case was raffled to said branch long after he assumed the position of Assisting Judge of Branch 74; that he neither saw nor had possession of the said record; and that there was no reason for him to take the record anywhere. He pleaded for compassion and leniency from the Court, invoking his unblemished record in government service for twenty-three (23) years. He likewise offered his sincere apologies to those who were prejudiced.

In its evaluation of the charges against Judge Leonida, the OCA recommended that for his failure to resolve motions in ten (10) civil cases; decide eleven (11) criminal cases, and twenty-seven (27) civil cases in Branch 27, and to decide ninety-one (91) criminal cases and sixteen (16) civil cases in Branch 74, he be found guilty of gross incompetency and inefficiency, and fined the amount of P50,000.00 pesos to be deducted from his retirement benefits.

The recommendations of the OCA are well-taken.

Precedents have shown that the failure of a judge to decide a case within the reglementary period warrants administrative sanction.  The Court treats such cases with utmost rigor for any delay in the administration of justice; no matter how brief, deprives the litigant of his right to a speedy disposition of his case.^[14][14] Not only does it magnify the cost of seeking justice; it undermines the people’s faith and confidence in the judiciary, lowers its standards and brings it to disrepute.^[15][15]

No less than Section 15 (1), Article 8 of the 1987 Constitution mandates that all cases or matters filed before all lower courts shall be decided or resolved within three (3) months from the date of submission.  The prescribed period is a firm mandatory rule for the efficient administration of justice and not merely one for indulgent tweaking.

As a general principle, rules prescribing the time within which certain acts must be done, or certain proceedings taken, are considered absolutely indispensable to the prevention of needless delays and for the orderly and speedy discharge of judicial business. By their very nature, these rules are regarded as mandatory.^[16][16]  In the same vein, Canon 3, Rule 3.05 of the Code of Judicial Conduct is emphatic in enjoining judges to administer justice without delay by disposing of the court’s business promptly and deciding cases within the period prescribed by law.

Corollary to this, Administrative Circular No. 3-99 dated January 15, 1999, requires all judges to scrupulously observe the periods prescribed in the Constitution for deciding cases, because failure to comply therewith violates the constitutional right of the parties to speedy disposition of the cases.^[17][17] Only in certain meritorious cases, that is, those involving difficult questions of law or complex issues, may a longer period to decide the case be allowed but only upon proper application for extension of the period has been made by the concerned judge.^[18][18] 

Judge Leonida was clearly remiss in his duties as a judge for he did not take the above constitutional command to heart.  Neither did he observe the above rules which have encapsulated the Court’s strict message: “the need and the imperative” for judges to promptly and expeditiously decide cases including all incidents therein.^[19][19]  In this case, the findings of the OCA showed that Judge Leonida failed to decide a considerable number of cases: (102) criminal cases and forty-three (43) civil cases.  Judge Leonida openly admitted his culpability in the delay of disposition of cases.

His proffered explanation is unacceptable given the ample period that he had.  He cannot take refuge behind the common excuse of heavy caseload to justify his failure to decide and resolve cases promptly.  He could have asked the Court for a reasonable period of extension to dipose of the cases but did not.

Due to his inefficiency, the constitutional right of parties to a speedy trial was violated out of neglect.  Instead of justice wrought by efficient and competent handling of judicial business, the lower courts handled and assisted by Judge Leonida produced unnecessary financial strain, not to mention physical and emotional anxiety, to litigants.  Delay derails the administration of justice.  It postpones the rectification of wrong and the vindication of the unjustly prosecuted. It crowds the dockets of the courts, increasing the costs for all litigants, pressuring judges to take short cuts, interfering with the prompt and deliberate disposition of those cases in which all parties are diligent and prepared for trial, and overhanging the entire process with the pall of disorganization and insolubility.  More than these, possibilities for error in fact-finding multiply rapidly between the original fact and its judicial determination as time elapses.  If the facts are not fully and accurately determined, even the wisest judge cannot distinguish between merit and demerit.  If courts do not get the facts right, there is little chance for their judgment to be right.^[20][20]  

The Court has always considered a judge’s delay in deciding cases within the prescribed period of three months as gross inefficiency.^[21][21]   Undue delay cannot be countenanced at a time when the clogging of the court dockets is still the bane of the judiciary.  The raison d’ etre of courts lies not only in properly dispensing justice but also in being able to do so seasonably.^[22][22]

Aside from the delay in deciding the reported cases, the audit findings likewise show that the case records/rollo in Branch 27 were not chronologically arranged. Certificates of arraignment, minutes of hearings and notices of hearing were unsigned by the accused and his/her counsel, or worse, missing from the files.  Judge Leonida was asked to explain the whereabouts of the case records of Criminal Case No.  12178.  His bare denial however, does not overcome the fair conclusion that Section 14 of Rule 136 of the Rules of Court^[23][23] was not observed.  The expectation directed at judges to exercise utmost diligence and care in handling the records of cases was certainly not met, or at least approximated.

The administration of justice demands that those who don judicial robes be able to comply fully and faithfully with the task set before them.^[24][24] As frontline officials of the judiciary, judges should, at all times, act with efficiency and with probity.  They are duty-bound not only to be faithful to the law, but likewise to maintain professional competence.  The pursuit of excellence must be their guiding principle. This is the least that judges can do to sustain the trust and confidence which the public reposed on them and the institution they represent. ^[25][25]

Therefore, as recommended by the OCA after a thorough judicial audit and considering the unrebutted audit reports on record, proper sanctions must be imposed. The penalty imposed for undue delay in deciding cases varies in each case: from fine, suspension, suspension and fine, and even dismissal, depending mainly on the number of cases left undecided within the reglementary period, and other factors, such as the damage suffered by the parties as a result of the delay, the health and the age of the judge.^[26][26] 

The Court agrees with the OCA that the total number of cases which Judge Leonida failed to timely decide or act on warrants a fine higher than that prescribed by the rules.  In Lugares v. Judge Gutierrez-Torres,^[27][27] the defaulting judge who was found guilty of gross inefficiency for her undue delay in resolving cases submitted for decision for a number of years was dismissed from the service.

In view of Judge Leonida’s retirement on July 5, 2008, the only penalty that the Court can impose against him is a fine, pursuant to the rule that the retirement of a judge does not release him from liability incurred while in the active service.

WHEREFORE, the Court finds respondent Judge Leonardo Leonida, former Presiding Judge of Branch 27, Regional Trial Court, Sta. Cruz, Laguna, and Assisting Judge in Branch 74, Regional Trial Court, Malabon City, GUILTY of gross incompetence and gross inefficiency for failure to decide one hundred two (102) criminal cases and forty-three (43) civil cases for which he is FINED P50,000.00 to be deducted from his retirement/gratuity benefits.

Judge Jaime C. Blancaflor, Acting Presiding Judge, RTC, Branch 27, Sta. Cruz, Laguna, and Atty. Bernadette Platon, Branch Clerk of Court, are hereby ordered to report on their respective compliance with the orders of the Court contained in its July 29, 2009 Order, within ten (10) days from receipt hereof. The Court notes that, in its February 10, 2010 Resolution, Judge Blancaflor was granted a non-extendible period of sixty (60) to comply with its July 29, 2009 Order.

Judge Blancaflor is hereby ordered to cause the reconstitution of Criminal Case No. 12178 within three (3) months from receipt hereof and to report his compliance thereon within ten (10) days from completion.

Atty. Bernadette Platon is hereby ordered to include the status of said case in her Monthly Report of Cases.

 SO ORDERED.

                                          RENATO C. CORONA

                                                   Chief Justice

ANTONIO T. CARPIO                       CONCHITA CARPIO MORALES

             Associate Justice                                                 Associate Justice

PRESBITERO J. VELASCO, JR.      ANTONIO EDUARDO B. NACHURA

                Associate Justice                                        Associate Justice

TERESITA J. LEONARDO-DE CASTRO ARTURO D. BRION

                     Associate Justice                                         Associate Justice

DIOSDADO M. PERALTA                               LUCAS P. BERSAMIN

Associate Justice                                                Associate Justice

MARIANO C. DEL CASTILLO                          ROBERTO A. ABAD

               Associate Justice                                            Associate Justice

                                                                                                     (No part)

MARTIN S. VILLARAMA, JR.           JOSE PORTUGAL PEREZ

Associate Justice                                                    Associate Justice

JOSE CATRAL MENDOZA            MARIA LOURDES P.A. SERENO

            Associate Justice                                       Associate Justice

CASE NO.2011-0024: REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE DEPARTMENT OF AGRARIAN REFORM, THROUGH THE HON. SECRETARY NASSER C. PANGANDAMAN VS.  SALVADOR N. LOPEZ AGRI-BUSINESS CORP., REPRESENTED BY SALVADOR N. LOPEZ, JR., PRESIDENT AND GENERAL MANAGER (G.R. NO. 178895, 10 JANUARY 2011, SERENO, J.) SUBJECT: EXEMPTION OF GRAZING LAND UNDER THE CARL. LOPEZ LAND EXEMPT. LIMOT LAND COVERED. (BRIEF TITLE: REPUBLIC VS. LOPEZ).

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D E C I S I O N

SERENO, J.:

Before us are two Rule 45 Petitions^[1][1] filed separately by the Department of Agrarian Reform (DAR), through the Office of the Solicitor General, and by the Salvador N. Lopez Agri-Business Corp. (SNLABC). Each Petition partially assails the Court of Appeals Decision dated 30 June 2006^[2][2] with respect to the application for exemption of four parcels of land – located in Mati, Davao Oriental and owned by SNLABC – from Republic Act No. 6657, otherwise known as the Comprehensive Agrarian Reform Law (CARL).

          There is little dispute as to the facts of the case, as succinctly discussed by the Court of Appeals and adopted herein by the Court, to wit:

Subject of this petition are four (4) parcels of land with an aggregate area of 160.1161 hectares registered in the name of Salvador N. Lopez Agri-Business Corporation. Said parcels of land are hereinafter described as follows:

On August 2, 1991, Municipal Agrarian Reform Officer (MARO) Socorro C. Salga issued a Notice of Coverage to petitioner with regards (sic) to the aforementioned landholdings which were subsequently placed under Compulsory Acquisition pursuant to R.A. 6657 (Comprehensive Agrarian Reform Law).

On December 10, 1992, petitioner filed with the Provincial Agrarian Reform Office (PARO), Davao Oriental, an Application for Exemption of the lots covered by TCT No. T-12637 and T-12639 from CARP coverage. It alleged that pursuant to the case of Luz Farms v. DAR Secretary said parcels of land are exempted from coverage as the said parcels of land with a total area of 110.5455 hectares are used for grazing and habitat of petitioner’s 105 heads of cattle, 5 carabaos, 11 horses, 9 heads of goats and 18 heads of swine, prior to the effectivity of the Comprehensive Agrarian Reform Law (CARL).

On December 13, 1992 and March 1, 1993, the MARO conducted an onsite investigation on the two parcels of land confirming the presence of the livestock as enumerated. The Investigation Report dated March 9, 1993 stated:

That there are at least 2[5] to 30 heads of cows that farrow every year and if the trend of farrowing persist (sic), then the cattle shall become overcrowded and will result to scarcity of grasses for the cattle to graze;

That during the week cycle, the herds are being moved to the different adjacent lots owned by the corporation. It even reached Lot 1454-A and Lot 1296. Thereafter, the herds are returned to their respective night chute corrals which are constructed under Lot 1293-B and Lot 1298.

x x x

That the age of coconut trees planted in the area are already 40 to 50 years and have been affected by the recent drought that hit the locality.

That the presence of livestocks (sic) have already existed in the area prior to the Supreme Court decision on LUZ FARMS vs. Secretary of Agrarian Reform. We were surprised however, why the management of the corporation did not apply for Commercial Farm Deferment (CFD) before, when the two years reglamentary (sic) period which the landowner was given the chance to file their application pursuant to R.A. 6657, implementing Administrative Order No. 16, Series of 1989;

However, with regards to what venture comes (sic) first, coconut or livestocks (sic), majority of the farmworkers including the overseer affirmed that the coconut trees and livestocks (sic) were (sic) simultaneously and all of these were inherited by his (applicant) parent. In addition, the financial statement showed 80% of its annual income is derived from the livestocks (sic) and only 20% from the coconut industry.

Cognitive thereto, we are favorably recommending for the exemption from the coverage of CARP based on LUZ FARMS as enunciated by the Supreme Court the herein Lot No. 1293-B Psd-65835 under TCT No. T-12639 except Lot No. 1298, Cad. 286 of TCT No. T-12637 which is already covered under the Compulsory Acquisition (CA) Scheme and had already been valued by the Land Valuation Office, Land Bank of the Philippines.

On June 24, 1993, TCT No. T-12635 covering Lots 1454-A & 1296 was cancelled and a new one issued in the name of the Republic of the Philippines under RP T-16356. On February 7, 1994, petitioner through its President, Salvador N. Lopez, Jr., executed a letter-affidavit addressed to the respondent-Secretary requesting for the exclusion from CARP coverage of Lots 1454-A and 1296 on the ground that they needed the additional area for its livestock business. On March 28, 1995, petitioner filed before the DAR Regional Director of Davao City an application for the exemption from CARP coverage of Lots 1454-A and 1296 stating that it has been operating grazing lands even prior to June 15, 1988 and that the said two (2) lots form an integral part of its grazing land.

The DAR Regional Director, after inspecting the properties, issued an Order dated March 5, 1997 denying the application for exemption of Lots 1454-A and 1296 on the ground that it was not clearly shown that the same were actually, directly and exclusively used for livestock raising since in its application, petitioner itself admitted that it needs the lots for additional grazing area. The application for exemption, however of the other two (2) parcels of land was approved.

On its partial motion for reconsideration, petitioner argued that Lots 1454-A & 1296 were taken beyond the operation of the CARP pursuant to its reclassification to a Pollutive Industrial District (Heavy Industry) per Resolution No. 39 of the Sangguniang Bayan of Mati, Davao Oriental, enacted on April 7, 1992. The DAR Regional Director denied the Motion through an Order dated September 4, 1997, ratiocinating that the reclassification does not affect agricultural lands already issued a Notice of Coverage as provided in Memorandum Circular No. 54-93: Prescribing the Guidelines Governing Section 20 of R.A. 7160.

Undaunted, petitioner appealed the Regional Director’s Orders to respondent DAR. On June 10, 1998, the latter issued its assailed Order affirming the Regional Director’s ruling on Lots 1454-A & 1296 and further declared Lots 1298 and 1293-B as covered by the CARP. Respondent ruled in this wise considering the documentary evidence presented by petitioner such as the Business Permit to engage in livestock, the certification of ownership of large cattle and the Corporate Income Tax Returns, which were issued during the effectivity of the Agrarian Reform Law thereby debunking petitioner’s claim that it has been engaged in livestock farming since the 1960s. Respondent further ruled that the incorporation by the Lopez family on February 12, 1988 or four (4) months before the effectivity of R.A. 6657 was an attempt to evade the noble purposes of the said law.

On October 17, 2002, petitioner’s Motion for Reconsideration was denied by respondent prompting the former to file the instant petition.^[3][3]

          In the assailed Decision dated 30 June 2006,^[4][4] the Court of Appeals partially granted the SNLABC Petition and excluded the two (2) parcels of land (Transfer Certificate of Title [TCT] Nos. T-12637 and T-12639) located in Barrio Don Enrique Lopez (the “Lopez lands”) from coverage of the CARL.
However, it upheld the Decisions of the Regional Director^[5][5] and the DAR^[6][6] Secretary denying the application for exemption with respect to Lots 1454-A and 1296 (previously under TCT No. T-12635) in Barrio Limot (the “Limot lands”). These lots were already covered by a new title under the name of the Republic of the Philippines (RP T-16356).

          The DAR and SNLABC separately sought a partial reconsideration of the assailed Decision of the Court of Appeals, but their motions for reconsideration were subsequently denied in the Court of Appeals Resolution dated 08 June 2007.^[7][7] 

          The DAR and SNLABC elevated the matter to this Court by filing separate Rule 45 Petitions (docketed as G.R. No. 178895^[8][8] and 179071,^[9][9] respectively), which were subsequently ordered consolidated by the Court.

          The main issue for resolution by the Court is whether the Lopez and Limot lands of SNLABC can be considered grazing lands for its livestock business and are thus exempted from the coverage of the CARL under the Court’s ruling in Luz Farms v. DAR.^[10][10] The DAR questions the disposition of the Court of Appeals, insofar as the latter allowed the exemption of the Lopez lands, while SNLABC assails the inclusion of the Limot lands within the coverage of the CARL.

          The Court finds no reversible error in the Decision of the Court of Appeals and dismisses the Petitions of DAR and SNLABC.

Preliminarily, in a petition for review on certiorari filed under Rule 45, the issues that can be raised are, as a general rule, limited to questions of law.^[11][11] However, as pointed out by both the DAR and SNLABC, there are several recognized exceptions wherein the Court has found it appropriate to re-examine the evidence presented.^[12][12] In this case, the factual findings of the DAR Regional Director, the DAR Secretary and the CA are contrary to one another with respect to the following issue: whether the Lopez lands were actually, directly and exclusively used for SNLABC’s livestock business; and whether there was intent to evade coverage from the Comprehensive Agrarian Reform Program (CARP) based on the documentary evidence. On the other hand, SNLABC argues that these authorities misapprehended and overlooked certain relevant and undisputed facts as regards the inclusion of the Limot lands under the CARL. These circumstances fall within the recognized exceptions and, thus, the Court is persuaded to review the facts and evidence on record in the disposition of these present Petitions.

The Lopez lands of SNLABC are actually and directly being used for livestock and are thus exempted from the coverage of the CARL.

Briefly stated, the DAR questions the object or autoptic evidence relied upon by the DAR Regional Director in concluding that the Lopez lands were actually, directly and exclusively being used for SNLABC’s livestock business prior to the enactment of the CARL.

          In Luz Farms v. Secretary of the Department of Agrarian Reform,^[13][13]the Court declared unconstitutional the CARL provisions^[14][14]that included lands devoted to livestock under the coverage of the CARP. The transcripts of the deliberations of the Constitutional Commission of 1986 on the meaning of the word “agricultural” showed that it was never the intention of the framers of the Constitution to include the livestock and poultry industry in the coverage of the constitutionally mandated agrarian reform program of the government.^[15][15] Thus, lands devoted to the raising of livestock, poultry and swine have been classified as industrial, not agricultural, and thus exempt from agrarian reform.^[16][16]

          Under the rules then prevailing, it was the Municipal Agrarian Reform Officer (MARO) who was primarily responsible for investigating the legal status, type and areas of the land sought to be excluded;^[17][17] and for ascertaining whether the area subject of the application for exemption had been devoted to livestock-raising as of 15 June 1988.^[18][18] The MARO’s authority to investigate has subsequently been replicated in the current DAR guidelines regarding lands that are actually, directly and exclusively used for livestock raising.^[19][19] As the primary official in charge of investigating the land sought to be exempted as livestock land, the MARO’s findings on the use and nature of the land, if supported by substantial evidence on record, are to be accorded greater weight, if not finality.

Verily, factual findings of administrative officials and agencies that have acquired expertise in the performance of their official duties and the exercise of their primary jurisdiction are generally accorded not only respect but, at times, even finality if such findings are supported by substantial evidence.^[20][20] The Court generally accords great respect, if not finality, to factual findings of administrative agencies because of their special knowledge and expertise over matters falling under their jurisdiction.^[21][21]

In the instant case, the MARO in its ocular inspection^[22][22] found on the Lopez lands several heads of cattle, carabaos, horses, goats and pigs, some of which were covered by several certificates of ownership. There were likewise structures on the Lopez lands used for its livestock business, structures consisting of two chutes where the livestock were kept during nighttime. The existence of the cattle prior to the enactment of the CARL was positively affirmed by the farm workers and the overseer who were interviewed by the MARO. Considering these factual findings and the fact that the lands were in fact being used for SNLABC’s livestock business even prior to 15 June 1988, the DAR Regional Director ordered the exemption of the Lopez lands from CARP coverage. The Court gives great probative value to the actual, on-site investigation made by the MARO as affirmed by the DAR Regional Director. The Court finds that the Lopez lands were in fact actually, directly and exclusively being used as industrial lands for livestock-raising.

Simply because the on-site investigation was belatedly conducted three or four years after the effectivity of the CARL does not perforce make it unworthy of belief or unfit to be offered as substantial evidence in this case. Contrary to DAR’s claims, the lack of information as regards the initial breeders and the specific date when the cattle were first introduced in the MARO’s Report does not conclusively demonstrate that there was no livestock-raising on the Lopez lands prior to the CARL. Although information as to these facts are significant, their non-appearance in the reports does not leave the MARO without any other means to ascertain the duration of livestock-raising on the Lopez lands, such as interviews with farm workers, the presence of livestock infrastructure, and evidence of sales of cattle – all of which should have formed part of the MARO’s Investigation Report.

Hence, the Court looks with favor on the expertise of the MARO in determining whether livestock-raising on the Lopez lands has only been recently conducted or has been a going concern for several years already. Absent any clear showing of grave abuse of discretion or bias, the findings of the MARO – as affirmed by the DAR Regional Director – are to be accorded great probative value, owing to the presumption of regularity in the performance of his official duties.^[23][23]

          The DAR, however, insisted in its Petition^[24][24] on giving greater weight to the inconsistencies appearing in the documentary evidence presented, and noted by the DAR Secretary, in order to defeat SNLABC’s claim of exemption over the Lopez lands. The Court is not so persuaded.

          In the Petition, the DAR argued that that the tax declarations covering the Lopez lands characterized them as agricultural lands and, thus, detracted from the claim that they were used for livestock purposes. The Court has since held that “there is no law or jurisprudence that holds that the land classification embodied in the tax declarations is conclusive and final nor would proscribe any further inquiry”; hence, “tax declarations are clearly not the sole basis of the classification of a land.”^[25][25] Applying the foregoing principles, the tax declarations of the Lopez lands as agricultural lands are not conclusive or final, so as to prevent their exclusion from CARP coverage as lands devoted to livestock-raising. Indeed, the MARO’s on-site inspection and actual investigation showing that the Lopez lands were being used for livestock-grazing are more convincing in the determination of the nature of those lands.

          Neither can the DAR in the instant case assail the timing of the incorporation of SNLABC and the latter’s operation shortly before the enactment of the CARL.  That persons  employ tactics to precipitously convert their lands from agricultural use to industrial livestock is not unheard of; they even exploit the creation of a new corporate vehicle to operate the livestock business to substantiate the deceitful conversion in the hopes of evading CARP coverage. Exemption from CARP, however, is directly a function of the land’s usage, and not of the identity of the entity operating it. Otherwise stated, lands actually, directly and exclusively used for livestock are exempt from CARP coverage, regardless of the change of owner.^[26][26] In the instant case, whether SNLABC was incorporated prior to the CARL is immaterial, since the Lopez lands were already being used for livestock-grazing purposes prior to the enactment of the CARL, as found by the MARO. Although the managing entity had been changed, the business interest of raising livestock on the Lopez lands still remained without any indication that it was initiated after the effectivity of the CARL.

          As stated by SNLABC, the Lopez lands were the legacy of Don Salvador Lopez, Sr. The ownership of these lands was passed from Don Salvador Lopez, Sr., to Salvador N. Lopez, Jr., and subsequently to the latter’s children before being registered under the name of SNLABC. Significantly, SNLABC was incorporated by the same members of the Lopez family, which had previously owned the lands and managed the livestock business.^[27][27] In all these past years, despite the change in ownership, the Lopez lands have been used for purposes of grazing and pasturing cattle, horses, carabaos and goats. Simply put, SNLABC was chosen as the entity to take over the reins of the livestock business of the Lopez family. Absent any other compelling evidence, the inopportune timing of the incorporation of the SNLABC prior to the enactment of the CARL was not by itself a categorical manifestation of an intent to avoid CARP coverage.

          Furthermore, the presence of coconut trees, although an indicia that the lands may be agricultural, must be placed within the context of how they figure in the actual, direct and exclusive use of the subject lands. The DAR failed to demonstrate that the Lopez lands were actually and primarily agricultural lands planted with coconut trees. This is in fact contradicted by the findings of its own official, the MARO. Indeed, the DAR did not adduce any proof to show that the coconut trees on the Lopez lands were used for agricultural business, as required by the Court in DAR v. Uy,^[28][28] wherein we ruled thus:

It is not uncommon for an enormous landholding to be intermittently planted with trees, and this would not necessarily detract it from the purpose of livestock farming and be immediately considered as an agricultural land. It would be surprising if there were no trees on the land.  Also, petitioner did not adduce any proof to show that the coconut trees were planted by respondent and used for agricultural business or were already existing when the land was purchased in 1979. In the present case, the area planted with coconut trees bears an insignificant value to the area used for the cattle and other livestock-raising, including the infrastructure needed for the business. There can be no presumption, other than that the “coconut area” is indeed used for shade and to augment the supply of fodder during the warm months; any other use would be only be incidental to livestock farming. The substantial quantity of livestock heads could only mean that respondent is engaged in farming for this purpose. The single conclusion gathered here is that the land is entirely devoted to livestock farming and exempted from the CARP.

          On the assumption that five thousand five hundred forty-eight (5,548) coconut trees were existing on the Lopez land (TCT No. T-12637), the DAR did not refute the findings of the MARO that these coconut trees were merely incidental. Given the number of livestock heads of SNLABC, it is not surprising that the areas planted with coconut trees on the Lopez lands where forage grass grew were being used as grazing areas for the livestock. It was never sufficiently adduced that SNLABC was primarily engaged in agricultural business on the Lopez lands, specifically, coconut-harvesting. Indeed, the substantial quantity of SNLABC’s livestock amounting to a little over one hundred forty (140) livestock heads, if measured against the combined 110.5455 hectares of land and applying the DAR-formulated ratio, leads to no other conclusion than that the Lopez lands were exclusively devoted to livestock farming.^[29][29]

          In any case, the inconsistencies appearing in the documentation presented (albeit sufficiently explained) pale in comparison to the positive assertion made by the MARO in its on-site, actual investigation – that the Lopez lands were being used actually, directly and exclusively for its livestock-raising business. The Court affirms the findings of the DAR Regional Director and the Court of Appeals that the Lopez lands were actually, directly and exclusively being used for SNLABC’s livestock business and, thus, are exempt from CARP coverage.

The Limot lands of SNLABC are not actually and directly being used for livestock and should thus be covered by the CARL.

          In contrast, the Limot lands were found to be agricultural lands devoted to coconut trees and rubber and are thus not subject to exemption from CARP coverage.

          In the Report dated 06 April 1994, the team that conducted the inspection found that the entire Limot lands were devoted to coconuts (41.5706 hectares) and rubber (8.000 hectares) and recommended the denial of the application for exemption.^[30][30] Verily, the Limot lands were actually, directly and exclusively used for agricultural activities, a fact that necessarily makes them subject to the CARP. These findings of the inspection team were given credence by the DAR Regional Director who denied the application, and were even subsequently affirmed by the DAR Secretary and the Court of Appeals.

          SNLABC argues that the Court of Appeals misapprehended the factual circumstances and overlooked certain relevant facts, which deserve a second look. SNLABC’s arguments fail to convince the Court to reverse the rulings of the Court of Appeals.

          In the 07 February 1994 Letter-Affidavit addressed to the DAR Secretary, SNLABC requested the exemption of the Limot lands on the ground that the corporation needed the additional area for its livestock business. As pointed out by the DAR Regional Director, this Letter-Affidavit is a clear indication that the Limot lands were not directly, actually and exclusively used for livestock raising. SNLABC casually dismisses the clear import of their Letter-Affidavit as a “poor choice of words.” Unfortunately, the semantics of the declarations of SNLABC in its application for exemption are corroborated by the other attendant factual circumstances and indicate its treatment of the subject properties as non-livestock.

Verily, the MARO itself, in the Investigation Report cited by no less than SNLABC, found that the livestock were only moved to the Limot lands sporadically and were not permanently designated there. The DAR Secretary even described SNLABC’s use of the area as a “seasonal extension of the applicant’s ‘grazing lands’ during the summer.” Therefore, the Limot lands cannot be claimed to have been actually, directly and exclusively used for SNLABC’s livestock business, especially since these were only intermittently and secondarily used as grazing areas. The said lands are more suitable — and are in fact actually, directly and exclusively being used — for agricultural purposes.

SNLABC’s treatment of the land for non-livestock purposes is highlighted by its undue delay in filing the application for exemption of the Limot lands. SNLABC filed the application only on 07 February 1994, or three years after the Notice of Coverage was issued; two years after it filed the first application for the Lopez lands; and a year after the titles to the Limot lands were transferred to the Republic. The SNLABC slept on its rights and delayed asking for exemption of the Limot lands. The lands were undoubtedly being used for agricultural purposes, not for its livestock business; thus, these lands are subject to CARP coverage. Had SNLABC indeed utilized the Limot lands in conjunction with the livestock business it was conducting on the adjacent Lopez lands, there was nothing that would have prevented it from simultaneously applying for a total exemption of all the lands necessary for its livestock.

The defense of SNLABC that it wanted to “save” first the Lopez lands where the corrals and chutes were located, before acting to save the other properties does not help its cause. The piecemeal application for exemption of SNLABC speaks of the value or importance of the Lopez lands, compared with the Limot lands, with respect to its livestock business. If the Lopez and the Limot lands were equally significant to its operations and were actually being used for its livestock business, it would have been more reasonable for it to apply for exemption for the entire lands. Indeed, the belated filing of the application for exemption was a mere afterthought on the part of SNLABC, which wanted to increase the area of its landholdings to be exempted from CARP on the ground that these were being used for its livestock business.

In any case, SNLABC admits that the title to the Limot lands has already been transferred to the Republic and subsequently awarded to SNLABC’s farm workers.^[31][31] This fact only demonstrates that the land is indeed being used for agricultural activities and not for livestock grazing.

The confluence of these factual circumstances leads to the logical conclusion that the Limot lands were not being used for livestock grazing and, thus, do not qualify for exemption from CARP coverage. SNLABC’s belated filing of the application for exemption of the Limot lands was a ruse to increase its retention of its landholdings and an attempt to “save” these from compulsory acquisition.

            WHEREFORE, the Petitions of the Department of Agrarian Reform and the Salvador N. Lopez Agri-Business Corp. are DISMISSED, and the rulings of the Court of Appeals and the DAR Regional Director are hereby AFFIRMED.

          SO ORDERED.

MARIA LOURDES P. A. SERENO

Associate Justice

WE CONCUR:

CONCHITA CARPIO MORALES

Associate Justice

Chairperson

MARTIN S. VILLARAMA, JR.

Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the Opinion of the Court’s Division.

                                               CONCHITA CARPIO MORALES

                                                                 Associate Justice

                                                         Chairperson, Third Division

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson’s Attestation, I certify that the conclusions in the above decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

                                               RENATO C. CORONA

                                                         Chief Justice