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Association of Small Landowners in the Philippines, Inc.

vs Secretary of Agrarian Reform

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. 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, instituting a comprehensive agrarian reform program
(CARP) was enacted; later, E.O. No. 229, providing the mechanics for its (PP131s) implementation, was also
enacted. 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.

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 usurped the legislatures power. b. A petition by landowners and sugarplanters in 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
not exceeding seven hectares.
Issue: 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 CARP becomes 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.
FACTS:

These are consolidated cases involving common legal questions including serious challenges to the
constitutionality of R.A. No. 6657 also known as the "Comprehensive Agrarian Reform Law of 1988"

In G.R. No. 79777, the petitioners are questioning the P.D No. 27 and E.O Nos. 228 and 229 on the 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.

In G.R. No. 79310, the petitioners in this case claim that the power to provide for a Comprehensive Agrarian
Reform Program as decreed by the Constitution belongs to the Congress and not to the President, the also
allege that Proclamation No. 131 and E.O No. 229 should be annulled for violation of the constitutional
provisions on just compensation, due process and equal protection. They contended that the taking must be
simultaneous with payment of just compensation which such payment is not contemplated in Section 5 of the
E.O No. 229.

In G.R. No. 79744, the petitioner argues that E.O Nos. 228 and 229 were invalidly issued by the President and
that the said executive orders violate the constitutional provision that no private property shall be taken
without due process or just compensation which was denied to the petitioners.

In G.R. No 78742 the petitioners claim that 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 of the
decree. They therefore ask the Honorable Court for a writ of mandamus to compel the respondents to issue the
said rules.

ISSUE:

Whether or not the laws being challenged is a valid exercise of Police power or Power of Eminent Domain.

RULING:

Police Power through the Power of Eminent Domain, though there are traditional distinction between the
police power and the power of eminent domain, property condemned under police power is noxious or
intended for noxious purpose, the compensation for the taking of such property is not subject to compensation,
unlike the taking of the property in Eminent Domain or the power of expropriation which requires the payment
of just compensation to the owner of the property expropriated.