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Assn. of Small Landowners v. Sec. of Agrarian Reform

G.R. Nos. 78742, 7977, 79310, 79744
July 14, 1989
Art. XIII, 4 Agrarian Reform
FACTS:
This is a petition with four (4) consolidated cases because they involve common legal
questions, including serious challenges to the constitutionality of several measures such as R.A.
No. 3844 (Agricultural Land Reform Code); P.D. No. 27 promulgated along with martial law, to
provide for the compulsory acquisition of private lands for distribution among tenant-farmers
and to specify maximum retention limits for landowners.
First case: G.R. No. 78742 (Assn. of Small Landowners v. Sec. of Agrarian Reform)
The association of the Small Landowners of the Philippines invokes the right of retention
granted by PD 27 to owners of rice and corn lands not exceeding 7 hectares as long as they are
cultivating on intend to cultivate the same. Their respected lands do not exceed the statutory
limits but are occupied by tenants who re actually cultivating such lands.
Because PD No. 316 provides that no tenant-farmer in agricultural land primarily devoted
to rice and corn shall be ejected or removed from his farm holding until such time as the
respective rights of the tenant-farmers and the land owners shall have been determined, they
petitioned the court for a writ of mandamus to compel the DAR Secretary to issue the IRR, as
they could not eject their tenants and so are unable to enjoy their right of retention.
Second case: G.R. No. 7977 (Manaay v. Sec. of Agrarian Reform)
Nicolas Manaay and his wife owned a 9-hectare Riceland; while Agustin Hermano Jr.
owned 5. They both have four tenants, each on their respective landholdings, who were declared
full owners of the said land by EO 228 as qualified farmers under PD 27. The Manaays and
Hermano questioned the constitutionality of PD 27 and EOs 228 and 229.
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.
Third case: G.R. No. 79310 (Planters Committee v. Presidential Agrarian Reform)
Landowners and sugar planters in the Victoria Mills District in Negros as well as
Planters Committee, Inc., seek to prohibit the implementation of the PP 131 and EO 229 for
being violative of the Constitutional provisions on just compensation, due process and equal
protection.
Subsequently, the National Federation of Sugar Planters (NASP), Manuel Barcelona and
Prudencio Serrano filed their own petitions, which also assailed the abovementioned statutes.

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Fourth case: G.R. No. 79744 (Pabico v. Sec. of Agrarian Reform)

Inocentes Pabico alleges that then DAR Secretary placed his landholding under the
coverage of OLT, in violation of due process and the requirement for just compensation.
Certificates of land transfer were subsequently issued to tenants, who then refused to pay lease
rentals to him. He then protested the erroneous inclusion of his small landholding under OLT and
asked for the recall and cancellation of the said CLT, which was denied without hearing.
Although he filed an MR, EO Nos. 228 and 229 were issued, rendering his MR moot and
academic because the said EOs directly affected the transfer of his land to his farmer-tenants.
ISSUES:
First case:
1. Whether the assailed statutes are valid exercises of police power.
2. Whether the content and manner of just compensation provided for the CARP is violative
of the Constitution.
3. Whether the CARP and EO 228 contravene a well-accepted principle of eminent domain
by divesting the land owner of his property even before actual payment to him in full of
just compensation
Second case:
1. Whether there was a violation of the equal protection clause
2. Whether there is a violation of due process
3. Whether just compensation, under the agrarian reform program, must be in terms of cash
Third case:
Whether the CARP fund provision in PP No.131 conforms to the requirements of a valid
appropriation
Fourth case:
1. Whether PP No. 131 and EO No. 229 should be invalidated because they do not provide
for retention limits.
2. Whether the assailed statutes violates the equal protection clause.
RULING:
First case:
1. Yes. The subject and purpose of agrarian reform have been laid down by the Constitution
itself, which satisfies the first requirement of the lawful subject. However, objection is raised
to the manner fixing the just compensation, which it is claimed is judicial prerogatives.
However, there is no arbitrariness in the provision as the determination of just compensation
by DAR is only preliminary unless accepted by all parties concerned. Otherwise, the courts
will still have the right to review with finality the said determination.
2. No. Although the traditional medium for payment of just compensation is money and no
other, what is being dealt with here is not the traditional exercise of the power and eminent
domain. This is a revolutionary kind of expropriation, which involves not mere millions of
pesos. The initially intended amount of P50B may not be enough, and is in fact not even fully
available at the time. The invalidation of the said section resulted in the nullification of the
entire program.
3. No. EO 228 categorically stated that all qualified farmer-beneficiaries were deemed full
owners of the land they acquired under PP 27, after proof of full payment of just
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compensation. The CARP Law, for its part, conditions the transfer of possession and
ownership of the land to the government on the receipt by the landowner of the
corresponding payment or the deposit of DAR of the compensation in cash or LBP bonds
with an accessible bank. Until then, title also remains with the landowner.
Second case:
1. No. 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, 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.
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.
Third case:
No. PP No.131 is not an appropriation measure even if it provide for the creation of the
said fund, for that is not the principal purpose. Appropriation law is one where the primary and
specific purpose of which is to authorize the release of public funds from the treasury. The
creation of the fund is only incidental to the main objective of the proclamation, which is
agrarian reform.
Fourth case:
1. No. This argument is no longer tenable because RA 6657 does not provide for such limits
now in Section 6 of the law. As such, landowners who were unable to exercise their rights to
retention under PD 27 shall enjoy the retention rights granted by RA 6657 under the
condition therein prescribed.
2. No. The petitioners have not shown that they belong to a different class and entitled to
different treatment. The argument that not only landowners but also owners of their
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properties must be rejected. There is substantial distinction between these two classes of
owners that is clearly visible except to those who will not see.

Prepared by: Mary Louise M. Ramos