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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 (PP131’s)
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.

Luz Farms vs Sec of DAR


FACTS:
 Luz Farms is a corporation engaged in the livestock and poultry business allegedly stands to be adversely
affected by the enforcement of some provisions of CARP.
 Luz Farms questions the following provisions of R.A. 6657, insofar as they are made to apply to it:

(a) Section 3(b) which includes the "raising of livestock (and poultry)" in the definition of "Agricultural, Agricultural
Enterprise or Agricultural Activity.
(b) Section 11 which defines "commercial farms" as "private agricultural lands devoted to commercial, livestock, poultry
and swine raising . . ."
(c) Section 13 which calls upon petitioner to execute a production-sharing plan.
(d) Section 16(d) and 17 which vest on the Department of Agrarian Reform the authority to summarily determine the just
compensation to be paid for lands covered by the Comprehensive Agrarian Reform Law
(e) Section 32 which spells out the production-sharing plan mentioned in Section 13
". . . (W)hereby three percent (3%) of the gross sales from the production of such lands are distributed within sixty (60) days
of the end of the fiscal year as compensation to regular and other farmworkers in such lands over and above the
compensation they currently receive xxx

ISSUE: The main issue in this petition is the constitutionality of Sections 3(b), 11, 13 and 32 of R.A. No. 6657 (the
Comprehensive Agrarian Reform Law of 1988), insofar as the said law includes the raising of livestock, poultry and swine
in its coverage

HELD:
 Said provisions are unconstitutional.
 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 livestock and poultry
industry in the coverage of the constitutionally-mandated agrarian reform program of the Government.
 Commissioner Tadeo: Ipinaaalam ko kay Commissioner Regalado na hindi namin inilagay ang agricultural worker
sa kadahilanang kasama rito ang piggery, poultry at livestock workers. Ang inilagay namin dito ay farm worker kaya hindi
kasama ang piggery, poultry at livestock workers.
 It is evident from the foregoing discussion that 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 the aforecited agro-industrial activities are made to be covered by the agrarian reform program of the State. There is
simply no reason to include livestock and poultry lands in the coverage of agrarian reform.

Republic of the Philippines


SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 78517 February 27, 1989

GABINO ALITA, JESUS JULIAN, JR., JESUS JULIAN, SR., PEDRO RICALDE, VICENTE RICALDE and
ROLANDO SALAMAR, petitioners,
vs.
THE HONORABLE COURT OF APPEALS, ENRIQUE M. REYES, PAZ M. REYES and FE M.
REYES, respondents.

Bureau of Agrarian Legal Assistance for petitioners.

Leonardo N. Zulueta for Enrique Reyes, et al. Adolfo S. Azcuna for private respondents.

PARAS, J.:

Before us is a petition seeking the reversal of the decision rendered by the respondent Court of Appeals**on March
3, 1987 affirming the judgment of the court a quo dated April 29, 1986, the dispositive portion of the trial court's
decision reading as follows;

WHEREFORE, the decision rendered by this Court on November 5, 1982 is hereby reconsidered
and a new judgment is hereby rendered:

1. Declaring that Presidential Decree No. 27 is inapplicable to lands obtained thru the homestead
law,

2. Declaring that the four registered co-owners will cultivate and operate the farmholding themselves
as owners thereof; and

3. Ejecting from the land the so-called tenants, namely; Gabino Alita, Jesus Julian, Sr., Jesus Julian,
Jr., Pedro Ricalde, Vicente Ricalde and Rolando Salamar, as the owners would want to cultivate the
farmholding themselves.

No pronouncement as to costs.

SO ORDERED. (p. 31, Rollo)

The facts are undisputed. The subject matter of the case consists of two (2) parcels of land, acquired by private
respondents' predecessors-in-interest through homestead patent under the provisions of Commonwealth Act No.
141. Said lands are situated at Guilinan, Tungawan, Zamboanga del Sur.

Private respondents herein are desirous of personally cultivating these lands, but petitioners refuse to vacate,
relying on the provisions of P.D. 27 and P.D. 316 and appurtenant regulations issued by the then Ministry of
Agrarian Reform (DAR for short), now Department of Agrarian Reform (MAR for short).

On June 18, 1981, private respondents (then plaintiffs), instituted a complaint against Hon. Conrado Estrella as then
Minister of Agrarian Reform, P.D. Macarambon as Regional Director of MAR Region IX, and herein petitioners (then
defendants) for the declaration of P.D. 27 and all other Decrees, Letters of Instructions and General Orders issued
in connection therewith as inapplicable to homestead lands.

Defendants filed their answer with special and affirmative defenses of July 8, 1981.

Subsequently, on July 19, 1982, plaintiffs filed an urgent motion to enjoin the defendants from declaring the lands in
litigation under Operation Land Transfer and from being issued land transfer certificates to which the defendants
filed their opposition dated August 4, 1982.
On November 5, 1982, the then Court of Agrarian Relations 16th Regional District, Branch IV, Pagadian City (now
Regional Trial Court, 9th Judicial Region, Branch XVIII) rendered its decision dismissing the said complaint and the
motion to enjoin the defendants was denied.

On January 4, 1983, plaintiffs moved to reconsider the Order of dismissal, to which defendants filed their opposition
on January 10, 1983.

Thus, on April 29, 1986, the Regional Trial Court issued the aforequoted decision prompting defendants to move for
a reconsideration but the same was denied in its Order dated June 6, 1986.

On appeal to the respondent Court of Appeals, the same was sustained in its judgment rendered on March 3, 1987,
thus:

WHEREFORE, finding no reversible error thereof, the decision appealed from is hereby AFFIRMED.

SO ORDERED. (p. 34, Rollo)

Hence, the present petition for review on certiorari.

The pivotal issue is whether or not lands obtained through homestead patent are covered by the Agrarian Reform
under P.D. 27.

The question certainly calls for a negative answer.

We agree with the petitioners in saying that P.D. 27 decreeing the emancipation of tenants from the bondage of the
soil and transferring to them ownership of the land they till is a sweeping social legislation, a remedial measure
promulgated pursuant to the social justice precepts of the Constitution. However, such contention cannot be invoked
to defeat the very purpose of the enactment of the Public Land Act or Commonwealth Act No. 141. Thus,

The Homestead Act has been enacted for the welfare and protection of the poor. The law gives a
needy citizen a piece of land where he may build a modest house for himself and family and plant
what is necessary for subsistence and for the satisfaction of life's other needs. The right of the
citizens to their homes and to the things necessary for their subsistence is as vital as the right to life
itself. They have a right to live with a certain degree of comfort as become human beings, and the
State which looks after the welfare of the people's happiness is under a duty to safeguard the
satisfaction of this vital right. (Patricio v. Bayog, 112 SCRA 45)

In this regard, the Philippine Constitution likewise respects the superiority of the homesteaders' rights over the rights
of the tenants guaranteed by the Agrarian Reform statute. In point is Section 6 of Article XIII of the 1987 Philippine
Constitution which provides:

Section 6. The State shall apply the principles of agrarian reform or stewardship, whenever
applicable in accordance with law, in the disposition or utilization of other natural resources,
including lands of public domain under lease or concession suitable to agriculture, subject to prior
rights, homestead rights of small settlers, and the rights of indigenous communities to their ancestral
lands.

Additionally, it is worthy of note that the newly promulgated Comprehensive Agrarian Reform Law of 1988 or
Republic Act No. 6657 likewise contains a proviso supporting the inapplicability of P.D. 27 to lands covered by
homestead patents like those of the property in question, reading,

Section 6. Retention Limits. ...

... Provided further, That original homestead grantees or their direct compulsory heirs who still own
the original homestead at the time of the approval of this Act shall retain the same areas as long as
they continue to cultivate said homestead.'

WHEREFORE, premises considered, the decision of the respondent Court of Appeals sustaining the decision of the
Regional Trial Court is hereby AFFIRMED.

SO ORDERED.

Melencio-Herrera, (Chairperson), Padilla, Sarmiento and Regalado, JJ., concur.

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