FACTS:

Luz Farms, a corporation engaged in the livestock and poultry business, filed a petition for prohibition, seeking to declare certain provisions of R.A. No. 6657 (Comprehensive Agrarian Reform Law) and its implementing guidelines and procedures as unconstitutional. The said provisions include Section 3(b), Section 11, Section 13, Section 16(d) and 17, and Section 32, which pertain to the inclusion of livestock, poultry, and swine raising in the definition of "agricultural activity," the definition of "commercial farms," the execution of a production-sharing plan, the determination of just compensation, and the distribution of sales and profit to farmworkers. Luz Farms argued that these provisions, insofar as they apply to them, violate their constitutional rights.

In this case, the petitioner corporation questioned the constitutionality of the Comprehensive Agrarian Reform Law. It argued that Congress had exceeded its authority in including land used for livestock, poultry, and swine in the coverage of the law. The petitioner argued that livestock and poultry raising are different from crop or tree farming, as land is not the primary resource in these industries and represents only a small portion of the total investment. The petitioner pointed out that many residential landowners across the country use available space in their residences for commercial livestock and poultry raising under "contract-growing arrangements."

On the other hand, the public respondent, the Secretary of Agrarian Reform, argued that livestock and poultry raising should be considered as part of agriculture. The respondent cited dictionary definitions that include the feeding, breeding, and management of livestock in the definition of agriculture. The petitioner's arguments were found to be meritorious, and the Court looked into the meanings of the constitutional provisions and the debates in the Constitutional Convention of 1986. It concluded that the intention of the framers was not to include livestock and poultry industry in the scope of agrarian reform. The definitions adopted by the Constitutional Commission also supported this conclusion.

ISSUES:

1. Whether the livestock and poultry industry should be included in the coverage of the agrarian reform program mandated by the Constitution.

2. Whether the requirement for corporate farms, including livestock and poultry raisers, to execute and implement production-sharing plans is confiscatory and violative of due process.

3. Whether the provisions of R.A. No. 6657 and its Implementing Rules and Guidelines, which include the raising of livestock, poultry, and swine in the coverage of the comprehensive agrarian reform program, violates the equal protection clause of the Constitution.

4. Whether the provisions allowing for the inclusion of the livestock and poultry industry within the coverage of the agrarian reform program are valid classifications.

5. Whether the classification of livestock and poultry industry as agricultural for the purpose of the agrarian reform program violates the equal protection clause of the Constitution.

RULING:

1. The framing of the Constitution was preliminarily determined by the Constitutional Convention, and the understanding of the convention regarding the terms of the constitutional provision being deliberated goes a long way in explaining the understanding of the people when they ratified it. 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 the livestock and poultry industry in the coverage of the agrarian reform program. Therefore, 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 it includes agro-industrial activities in the agrarian reform program.

2. The requirement in Sections 13 and 32 of R.A. 6657, which direct corporate farms, including livestock and poultry raisers, to execute and implement production-sharing plans, is unreasonable and confiscatory for being violative of due process. This requirement calls for the distribution of a percentage of gross sales and net profits to workers as additional compensation, pending final redistribution of landholdings.

3. The Court declared 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 with it, null and void for being unconstitutional. The writ of preliminary injunction issued was made permanent.

4. The provisions allowing for the inclusion of the livestock and poultry industry within the coverage of the agrarian reform program constitute invalid classification and must be struck down as repugnant to the equal protection clause of the Constitution.

PRINCIPLES:

• The intent of the Constitutional Convention can shed light on the interpretation of constitutional provisions.

• The understanding of the framers of the Constitution regarding the terms being deliberated carries weight in explaining the understanding of the people who ratified it.

• The inclusion of livestock and poultry lands in the coverage of agrarian reform is not supported by the Constitution, based on the transcripts of the deliberations of the Constitutional Commission of 1986.

• A requirement for corporate farms to distribute a percentage of gross sales and net profits to workers as additional compensation can be deemed confiscatory and violative of due process.

• It is the duty of the judiciary to declare as void any acts of the legislature or executive that exceed their constitutional powers.

• The presumption against unconstitutionality weighs heavily when ruling to the contrary would defeat the noble purpose of the law and render it merely illusory.

• The equal protection clause requires that all persons or things similarly situated should be treated alike, both as to rights conferred and responsibilities imposed.

• Equal protection clause of the Constitution

• The equal protection clause mandates that all persons similarly situated must be treated alike under similar circumstances.

• Valid classification

• In order for a classification to be valid, it must comply with the following requisites: (1) it must be based on substantial distinctions; (2) it must be germane to the purpose of the law; (3) it must not be limited to existing conditions only; and (4) it must apply equally to all members of the same class.

• Livestock and poultry industry

• The livestock and poultry industry is distinct from traditional agricultural activities due to factors such as the significant inputs required, the presence of fixed wages instead of crop shares, and the entitlement to social security benefits and additional incentives.

• Market for agricultural output

• The livestock and poultry industry serves as a market for agricultural products, such as corn, rice-bran, copra meal, banana pulp meal, and fish meal, rather than being a source of agricultural output.

• Inclusion within agrarian reform program

• The inclusion of the livestock and poultry industry within the coverage of the agrarian reform program is an invalid classification as it does not satisfy the requisites of valid classification and violates the equal protection clause.