175 SCRA 343 Political Law Constitutional Law Bill of Rights Equal

Protection Valid Classification

Eminent Domain Just Compensation
These are four consolidated cases questioning the constitutionality of the
Comprehensive Agrarian Reform Act (R.A. No. 6657 and related laws i.e.,
Agrarian Land Reform Code or R.A. No. 3844).

Brief background: Article XIII of the Constitution on Social Justice and Human
Rights includes a call for the adoption by the State of an agrarian reform
program.
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.
RA 3844 was enacted in 1963. AN ACT TO ORDAIN THE AGRICULTURAL
LAND REFORM CODE AND TO INSTITUTE LAND REFORMS IN THE PHILIPPINES,
INCLUDING THE ABOLITION OF TENANCY AND THE CHANNELING OF CAPITAL
INTO INDUSTRY, PROVIDE FOR THE NECESSARY IMPLEMENTING AGENCIES,
APPROPRIATE FUNDS THEREFOR AND FOR OTHER PURPOSES
P.D. No. 27 was promulgated in 1972 to provide for the compulsory
acquisition of private lands for distribution among tenant-farmers and to
specify maximum retention limits for landowners.
In 1987, President Corazon Aquino issued E.O. No. 228, declaring full
land ownership in favor of the beneficiaries of PD 27 and providing for
the valuation of still unvalued lands covered by the decree as well as the
manner of their payment.
In 1987, P.P. No. 131 (Philippine Proclamation), instituting a comprehensive
agrarian reform program (CARP) was enacted; later,
E.O. No. 229, providing the
implementation, was also enacted.

mechanics

for

its

(PP131s)

Afterwhich is the enactment of R.A. No. 6657, Comprehensive Agrarian

Reform Law in 1988. This law, while considerably changing the earlier
mentioned enactments, nevertheless gives them suppletory effect insofar as
they are not inconsistent with its provisions.

[Two of the consolidated cases are discussed below]

G.R. No. 78742: (Association of Small Landowners vs Secretary)

The Association of Small Landowners in the Philippines, Inc. sought exception

from the land distribution scheme provided for in R.A. 6657. The
Association is comprised of landowners of ricelands and cornlands
whose landholdings do not exceed 7 hectares. They invoke that since
their landholdings are less than 7 hectares, they should not be forced to
distribute their land to their tenants under R.A. 6657 for they themselves
have shown willingness to till their own land. In short, they want to be
exempted from agrarian reform program because they claim to belong to a
different class.

G.R. No. 79777: (Manaay vs Juico)

Nicolas Manaay questioned the validity of the agrarian reform laws (PD 27,
EO 228, and 229) on the ground that these laws already valuated their lands
for the agrarian reform program and that the specific amount must be
determined by the Department of Agrarian Reform (DAR). Manaay averred
that this violated the principle in eminent domain which provides that only
courts can determine just compensation. This, for Manaay, also violated due
process for under the constitution, no property shall be taken for public use
without just compensation.

Manaay also questioned the provision which states that landowners may be
paid for their land in bonds and not necessarily in cash. Manaay averred that
just compensation has always been in the form of money and not in bonds.

ISSUE:

1. Whether or not there was a violation of the equal protection clause.

2. Whether or not there is a violation of due process.

3. Whether or not just compensation, under the agrarian reform program,

must be in terms of cash.

HELD:

1. No. The Association had not shown any proof that they belong to a
different class exempt from the agrarian reform program. Under the law,
classification has been defined as the grouping of persons or things similar to
each other in certain particulars and different from each other in these same
particulars. To be valid, it must conform to the following requirements:

(1) it must be based on substantial distinctions;

(2) it must be germane to the purposes of the law;

(3) it must not be limited to existing conditions only; and

(4) it must apply equally to all the members of the class.

Equal protection simply means that all persons or things similarly situated
must be treated alike both as to the rights conferred and the liabilities
imposed. The Association have not shown that they belong to a different
class and entitled to a different treatment. The argument that not only
landowners but also owners of other properties must be made to share the
burden of implementing land reform must be rejected. There is a substantial
distinction between these two classes of owners that is clearly visible except
to those who will not see. There is no need to elaborate on this matter. In any
event, the Congress is allowed a wide leeway in providing for a valid
classification. Its decision is accorded recognition and respect by the courts
of justice except only where its discretion is abused to the detriment of the
Bill of Rights. In the contrary, it appears that Congress is right in classifying
small landowners as part of the agrarian reform program.

2. No. It is true that the determination of just compensation is a power

lodged in the courts. However, there is no law which prohibits administrative
bodies like the DAR from determining just compensation. In fact, just
compensation can be that amount agreed upon by the landowner and the
government even without judicial intervention so long as both parties
agree. The DAR can determine just compensation through appraisers and if
the landowner agrees, then judicial intervention is not needed. What is
contemplated by law however is that, the just compensation determined by
an administrative body is merely preliminary. If the landowner does not
agree with the finding of just compensation by an administrative body, then
it can go to court and the determination of the latter shall be the final
determination. This is even so provided by RA 6657:

Section 16 (f): Any party who disagrees with the decision may bring the
matter to the court of proper jurisdiction for final determination of just
compensation.

3. No. Money as [sole] payment for just compensation is merely a concept in

traditional exercise of eminent domain. The agrarian reform program is a
revolutionary exercise of eminent domain. The program will require billions of
pesos in funds if all compensation have to be made in cash if everything is
in cash, then the government will not have sufficient money hence, bonds,
and other securities, i.e., shares of stocks, may be used for just
compensation.

ASSO. OF SMALL LANDOWNERS VS. SEC. OF DAR [175

SCRA 343; G.R. NO. L-78742; 14 JUL 1989]
Friday, January 30, 2009 Posted by Coffeeholic Writes
Labels: Case Digests, Political Law

Facts:

Several

petitions

are

the

root

of

the

case:

a. A petition alleging the constitutionality of PD No. 27, EO 228 and 229 and RA
6657. Subjects of the petition are a 9-hectare and 5 hectare Riceland worked by
four

tenants.

Tenants

were

declared

full

owners

by

EO

228

as

qualified farmers under PD 27. The petitioners now contend that President
Aquino
b.

usurped
petition

by

the

landowners

and

legislatures
sugarplanters

in

power.

Victorias Mill Negros

Occidental against Proclamation 131 and EO 229. Proclamation 131 is the

creation

of

Agrarian

Reform

Fund

with

initial

fund

of

P50Billion.

c. A petition by owners of land which was placed by the DAR under the coverage
of

Operation

Land

Transfer.

d. A petition invoking the right of retention under PD 27 to owners of rice and

corn

lands

Issue:

not

exceeding

seven

hectares.

Whether or Not the aforementioned EOs, PD, and RA were

constitutional.

Held:

The promulgation of PD 27 by President Marcos was valid in exercise of

Police

power

and

eminent

domain.

The power of President Aquino to promulgate Proc. 131 and EO 228 and 229
was authorized under Sec. 6 of the Transitory Provisions of the 1987
Constitution. Therefore it is a valid exercise of Police Power and Eminent
Domain.
RA

6657

is

likewise

valid.

The

carrying

out

of

the

regulation

under CARPbecomes necessary to deprive owners of whatever lands they may

own in excess of the maximum area allowed, there is definitely a taking under
the power of eminent domain for which payment of just compensation is
imperative. The taking contemplated is not a mere limitation of the use of the
land. What is required is the surrender of the title and the physical possession
of said excess and all beneficial rights accruing to the owner in favour of the

farmer.
A statute may be sustained under the police power only if there is concurrence
of

the

lawful

subject

and

the method.

Subject and purpose of the Agrarian Reform Law is valid, however what is to be
determined is the method employed to achieve it.

Association of Small Landowners in the Philippines vs.

Honorable Secretary of Agrarian Reform
G.R. No. 78742

July 14, 1989

Petitioner: Association of Small Landowners in the Philippines

Respondent: Honorable Secretary of Agrarian Reform
Facts: These are consolidated cases which involve common legal, including serious
challenges to the constitutionality of the several measures such as P.D. No. 27, E.O. No.
228, Presidential Proclamation No. 131, E.O. No. 229, and R.A. No. 6657.
G.R. No. 79777
The petitioners are questioning P.D. No. 27 and E.O. Nos. 228 and 229 on
grounds inter alia of separation of powers, due process, equal protection and the
constitutional limitation that no private property shall be taken for public use
without just compensation. G.R. No. 79310
G.R. No. 79310
This petition seeks to prohibit the implementation of Proc. No. 131 and E.O. No.
229. They contend that taking must be simultaneous with payment of just
compensation as it is traditionally understood, i.e., with money and in full, but
no such payment is contemplated in Section 5 of the E.O. No. 229.
G.R. No. 79744
The petitioner argues that E.O. Nos. 228 and 229 are violative of the
constitutional provision that no private property shall be taken without due
process or just compensation.
G.R. No. 78742
Petitioners claim they cannot eject their tenants and so are unable to enjoy their
right of retention because the Department of Agrarian Reform has so far not
issued the implementing rules required under the above-quoted decree.
Issue: Whether agrarian reform is an exercise of police power or eminent domain
Ruling: There are traditional distinctions between the police power and the power of
eminent domain that logically preclude the application of both powers at the same time
on the same subject. Property condemned under the police power is noxious or intended

for a noxious purpose, such as a building on the verge of collapse, which should be
demolished for the public safety, or obscene materials, which should be destroyed in the
interest of public morals. The confiscation of such property is not compensable, unlike
the taking of property under the power of expropriation, which requires the payment of
just compensation to the owner.
The cases before us present no knotty complication insofar as the question of
compensable taking is concerned. To the extent that the measures under challenge
merely prescribe retention limits for landowners, there is an exercise of the police power
for the regulation of private property in accordance with the Constitution. But where, to
carry out such regulation, it becomes necessary to deprive such owners of whatever
lands they may own in excess of the maximum area allowed, there is definitely a taking
under the power of eminent domain for which payment of just compensation is
imperative. The taking contemplated is not a mere limitation of the use of the land.
What is required is the surrender of the title to and the physical possession of the said
excess and all beneficial rights accruing to the owner in favor of the farmer-beneficiary.
This is definitely an exercise not of the police power but of the power of eminent domain