Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 78742

July 14, 1989

ASSOCIATION OF SMALL LANDOWNERS IN THE PHILIPPINES,

INC., JUANITO D. GOMEZ, GERARDO B. ALARCIO, FELIPE A.
GUICO, JR., BERNARDO M. ALMONTE, CANUTO RAMIR B.
CABRITO, ISIDRO T. GUICO, FELISA I. LLAMIDO, FAUSTO J.
SALVA, REYNALDO G. ESTRADA, FELISA C. BAUTISTA,
ESMENIA J. CABE, TEODORO B. MADRIAGA, AUREA J.
PRESTOSA, EMERENCIANA J. ISLA, FELICISIMA C. ARRESTO,
CONSUELO M. MORALES, BENJAMIN R. SEGISMUNDO, CIRILA
A. JOSE & NAPOLEON S. FERRER, petitioners,
vs.
HONORABLE SECRETARY OF AGRARIAN REFORM, respondent.
G.R. No. 79310

July 14, 1989

G.R. No. 79777 July 14, 1989

NICOLAS S. MANAAY and AGUSTIN HERMANO, JR., petitioners,
vs.
HON. PHILIP ELLA JUICO, as Secretary of Agrarian Reform, and
LAND BANK OF THE PHILIPPINES, respondents.

CRUZ, J.:
In ancient mythology, Antaeus was a terrible giant who blocked and
challenged Hercules for his life on his way to Mycenae after performing
his eleventh labor. The two wrestled mightily and Hercules flung his
adversary to the ground thinking him dead, but Antaeus rose even
stronger to resume their struggle. This happened several times to
Hercules' increasing amazement. Finally, as they continued grappling,
it dawned on Hercules that Antaeus was the son of Gaea and could
never die as long as any part of his body was touching his Mother
Earth. Thus forewarned, Hercules then held Antaeus up in the air,
beyond the reach of the sustaining soil, and crushed him to death.

ARSENIO AL. ACUNA, NEWTON JISON, VICTORINO FERRARIS,

DENNIS JEREZA, HERMINIGILDO GUSTILO, PAULINO D.
TOLENTINO and PLANTERS' COMMITTEE, INC., Victorias Mill
District, Victorias, Negros Occidental, petitioners,
vs.
JOKER ARROYO, PHILIP E. JUICO and PRESIDENTIAL AGRARIAN
REFORM COUNCIL, respondents.

Mother Earth. The sustaining soil. The giver of life, without whose
invigorating touch even the powerful Antaeus weakened and died.

G.R. No. 79744 July 14, 1989

"Land for the Landless" is a slogan that underscores the acute

imbalance in the distribution of this precious resource among our
people. But it is more than a slogan. Through the brooding centuries, it
has become a battle-cry dramatizing the increasingly urgent demand of
the dispossessed among us for a plot of earth as their place in the sun.

INOCENTES PABICO, petitioner,

vs.
HON. PHILIP E. JUICO, SECRETARY OF THE DEPARTMENT OF
AGRARIAN REFORM, HON. JOKER ARROYO, EXECUTIVE
SECRETARY OF THE OFFICE OF THE PRESIDENT, and Messrs.
SALVADOR TALENTO, JAIME ABOGADO, CONRADO AVANCENA
and ROBERTO TAAY, respondents.

The cases before us are not as fanciful as the foregoing tale. But they
also tell of the elemental forces of life and death, of men and women
who, like Antaeus need the sustaining strength of the precious earth to
stay alive.

Recognizing this need, the Constitution in 1935 mandated the policy of

social justice to "insure the well-being and economic security of all the
people," 1 especially the less privileged. In 1973, the new Constitution
affirmed this goal adding specifically that "the State shall regulate the

acquisition, ownership, use, enjoyment and disposition of private

property and equitably diffuse property ownership and profits." 2
Significantly, there was also the specific injunction to "formulate and
implement an agrarian reform program aimed at emancipating the
tenant from the bondage of the soil." 3
The Constitution of 1987 was not to be outdone. Besides echoing
these sentiments, it also adopted one whole and separate Article XIII
on Social Justice and Human Rights, containing grandiose but
undoubtedly sincere provisions for the uplift of the common people.
These include a call in the following words for the adoption by the
State of an agrarian reform program:
SEC. 4. 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. To
this end, the State shall encourage and undertake the just distribution
of all agricultural lands, subject to such priorities and reasonable
retention limits as the Congress may prescribe, taking into account
ecological, developmental, or equity considerations and subject to the
payment of just compensation. In determining retention limits, the State
shall respect the right of small landowners. The State shall further
provide incentives for voluntary land-sharing.
Earlier, in fact, R.A. No. 3844, otherwise known as the Agricultural
Land Reform Code, had already been enacted by the Congress of the
Philippines on August 8, 1963, in line with the above-stated principles.
This was substantially superseded almost a decade later by P.D. No.
27, which was promulgated on October 21, 1972, 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.
The people power revolution of 1986 did not change and indeed even
energized the thrust for agrarian reform. Thus, on July 17, 1987,
President Corazon C. Aquino issued E.O. No. 228, declaring full land
ownership in favor of the beneficiaries of P.D. No. 27 and providing for
the valuation of still unvalued lands covered by the decree as well as
the manner of their payment. This was followed on July 22, 1987 by

Presidential Proclamation No. 131, instituting a comprehensive

agrarian reform program (CARP), and E.O. No. 229, providing the
mechanics for its implementation.
Subsequently, with its formal organization, the revived Congress of the
Philippines took over legislative power from the President and started
its own deliberations, including extensive public hearings, on the
improvement of the interests of farmers. The result, after almost a year
of spirited debate, was the enactment of R.A. No. 6657, otherwise
known as the Comprehensive Agrarian Reform Law of 1988, which
President Aquino signed on June 10, 1988. This law, while
considerably changing the earlier mentioned enactments, nevertheless
gives them suppletory effect insofar as they are not inconsistent with
its provisions. 4
The above-captioned cases have been consolidated because they
involve common legal questions, including serious challenges to the
constitutionality of the several measures mentioned above. They will
be the subject of one common discussion and resolution, The different
antecedents of each case will require separate treatment, however,
and will first be explained hereunder.
G.R. No. 79777
Squarely raised in this petition is the constitutionality of P.D. No. 27,
E.O. Nos. 228 and 229, and R.A. No. 6657.
The subjects of this petition are a 9-hectare riceland worked by four
tenants and owned by petitioner Nicolas Manaay and his wife and a 5hectare riceland worked by four tenants and owned by petitioner
Augustin Hermano, Jr. The tenants were declared full owners of these
lands by E.O. No. 228 as qualified farmers under P.D. No. 27.
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.
They contend that President Aquino usurped legislative power when
she promulgated E.O. No. 228. The said measure is invalid also for

violation of Article XIII, Section 4, of the Constitution, for failure to

provide for retention limits for small landowners. Moreover, it does not
conform to Article VI, Section 25(4) and the other requisites of a valid
appropriation.
In connection with the determination of just compensation, the
petitioners argue that the same may be made only by a court of justice
and not by the President of the Philippines. They invoke the recent
cases of EPZA v. Dulay 5 and Manotok v. National Food Authority. 6
Moreover, the just compensation contemplated by the Bill of Rights is
payable in money or in cash and not in the form of bonds or other
things of value.
In considering the rentals as advance payment on the land, the
executive order also deprives the petitioners of their property rights as
protected by due process. The equal protection clause is also violated
because the order places the burden of solving the agrarian problems
on the owners only of agricultural lands. No similar obligation is
imposed on the owners of other properties.
The petitioners also maintain that in declaring the beneficiaries under
P.D. No. 27 to be the owners of the lands occupied by them, E.O. No.
228 ignored judicial prerogatives and so violated due process. Worse,
the measure would not solve the agrarian problem because even the
small farmers are deprived of their lands and the retention rights
guaranteed by the Constitution.
In his Comment, the Solicitor General stresses that P.D. No. 27 has
already been upheld in the earlier cases of Chavez v. Zobel, 7
Gonzales v. Estrella, 8 and Association of Rice and Corn Producers of
the Philippines, Inc. v. The National Land Reform Council. 9 The
determination of just compensation by the executive authorities
conformably to the formula prescribed under the questioned order is at
best initial or preliminary only. It does not foreclose judicial intervention
whenever sought or warranted. At any rate, the challenge to the order
is premature because no valuation of their property has as yet been
made by the Department of Agrarian Reform. The petitioners are also
not proper parties because the lands owned by them do not exceed
the maximum retention limit of 7 hectares.

Replying, the petitioners insist they are proper parties because P.D.
No. 27 does not provide for retention limits on tenanted lands and that
in any event their petition is a class suit brought in behalf of
landowners with landholdings below 24 hectares. They maintain that
the determination of just compensation by the administrative
authorities is a final ascertainment. As for the cases invoked by the
public respondent, the constitutionality of P.D. No. 27 was merely
assumed in Chavez, while what was decided in Gonzales was the
validity of the imposition of martial law.
In the amended petition dated November 22, 1588, it is contended that
P.D. No. 27, E.O. Nos. 228 and 229 (except Sections 20 and 21) have
been impliedly repealed by R.A. No. 6657. Nevertheless, this statute
should itself also be declared unconstitutional because it suffers from
substantially the same infirmities as the earlier measures.
A petition for intervention was filed with leave of court on June 1, 1988
by Vicente Cruz, owner of a 1. 83- hectare land, who complained that
the DAR was insisting on the implementation of P.D. No. 27 and E.O.
No. 228 despite a compromise agreement he had reached with his
tenant on the payment of rentals. In a subsequent motion dated April
10, 1989, he adopted the allegations in the basic amended petition that
the above- mentioned enactments have been impliedly repealed by
R.A. No. 6657.
G.R. No. 79310
The petitioners herein are landowners and sugar planters in the
Victorias Mill District, Victorias, Negros Occidental. Co-petitioner
Planters' Committee, Inc. is an organization composed of 1,400
planter-members. This petition seeks to prohibit the implementation of
Proc. No. 131 and E.O. No. 229.
The petitioners claim that the power to provide for a Comprehensive
Agrarian Reform Program as decreed by the Constitution belongs to
Congress and not the President. Although they agree that the
President could exercise legislative power until the Congress was
convened, she could do so only to enact emergency measures during
the transition period. At that, even assuming that the interim legislative
power of the President was properly exercised, Proc. No. 131 and E.O.

No. 229 would still have to be annulled for violating the constitutional
provisions on just compensation, due process, and equal protection.

although they are a separate group with problems exclusively their

own, their right to equal protection has been violated.

They also argue that under Section 2 of Proc. No. 131 which provides:

A motion for intervention was filed on August 27,1987 by the National

Federation of Sugarcane Planters (NASP) which claims a membership
of at least 20,000 individual sugar planters all over the country. On
September 10, 1987, another motion for intervention was filed, this
time by Manuel Barcelona, et al., representing coconut and riceland
owners. Both motions were granted by the Court.

Agrarian Reform Fund.-There is hereby created a special fund, to be

known as the Agrarian Reform Fund, an initial amount of FIFTY
BILLION PESOS (P50,000,000,000.00) to cover the estimated cost of
the Comprehensive Agrarian Reform Program from 1987 to 1992
which shall be sourced from the receipts of the sale of the assets of the
Asset Privatization Trust and Receipts of sale of ill-gotten wealth
received through the Presidential Commission on Good Government
and such other sources as government may deem appropriate. The
amounts collected and accruing to this special fund shall be
considered automatically appropriated for the purpose authorized in
this Proclamation the amount appropriated is in futuro, not in esse. The
money needed to cover the cost of the contemplated expropriation has
yet to be raised and cannot be appropriated at this time.
Furthermore, 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. On the contrary, Section 6, thereof provides that the
Land Bank of the Philippines "shall compensate the landowner in an
amount to be established by the government, which shall be based on
the owner's declaration of current fair market value as provided in
Section 4 hereof, but subject to certain controls to be defined and
promulgated by the Presidential Agrarian Reform Council." This
compensation may not be paid fully in money but in any of several
modes that may consist of part cash and part bond, with interest,
maturing periodically, or direct payment in cash or bond as may be
mutually agreed upon by the beneficiary and the landowner or as may
be prescribed or approved by the PARC.
The petitioners also argue that in the issuance of the two measures, no
effort was made to make a careful study of the sugar planters'
situation. There is no tenancy problem in the sugar areas that can
justify the application of the CARP to them. To the extent that the sugar
planters have been lumped in the same legislation with other farmers,

NASP alleges that President Aquino had no authority to fund the

Agrarian Reform Program and that, in any event, the appropriation is
invalid because of uncertainty in the amount appropriated. Section 2 of
Proc. No. 131 and Sections 20 and 21 of E.O. No. 229 provide for an
initial appropriation of fifty billion pesos and thus specifies the minimum
rather than the maximum authorized amount. This is not allowed.
Furthermore, the stated initial amount has not been certified to by the
National Treasurer as actually available.
Two additional arguments are made by Barcelona, to wit, the failure to
establish by clear and convincing evidence the necessity for the
exercise of the powers of eminent domain, and the violation of the
fundamental right to own property.
The petitioners also decry the penalty for non-registration of the lands,
which is the expropriation of the said land for an amount equal to the
government assessor's valuation of the land for tax purposes. On the
other hand, if the landowner declares his own valuation he is unjustly
required to immediately pay the corresponding taxes on the land, in
violation of the uniformity rule.
In his consolidated Comment, the Solicitor General first invokes the
presumption of constitutionality in favor of Proc. No. 131 and E.O. No.
229. He also justifies the necessity for the expropriation as explained in
the "whereas" clauses of the Proclamation and submits that, contrary
to the petitioner's contention, a pilot project to determine the feasibility
of CARP and a general survey on the people's opinion thereon are not
indispensable prerequisites to its promulgation.

On the alleged violation of the equal protection clause, the sugar

planters have failed to show that they belong to a different class and
should be differently treated. The Comment also suggests the
possibility of Congress first distributing public agricultural lands and
scheduling the expropriation of private agricultural lands later. From
this viewpoint, the petition for prohibition would be premature.
The public respondent also points out that the constitutional prohibition
is against the payment of public money without the corresponding
appropriation. There is no rule that only money already in existence
can be the subject of an appropriation law. Finally, the earmarking of
fifty billion pesos as Agrarian Reform Fund, although denominated as
an initial amount, is actually the maximum sum appropriated. The word
"initial" simply means that additional amounts may be appropriated
later when necessary.
On April 11, 1988, Prudencio Serrano, a coconut planter, filed a petition
on his own behalf, assailing the constitutionality of E.O. No. 229. In
addition to the arguments already raised, Serrano contends that the
measure is unconstitutional because:
(1) Only public lands should be included in the CARP;
(2) E.O. No. 229 embraces more than one subject which is not
expressed in the title;
(3) The power of the President to legislate was terminated on July 2,
1987; and
(4) The appropriation of a P50 billion special fund from the National
Treasury did not originate from the House of Representatives.
G.R. No. 79744
The petitioner alleges that the then Secretary of Department of
Agrarian Reform, in violation of due process and the requirement for
just compensation, placed his landholding under the coverage of
Operation Land Transfer. Certificates of Land Transfer were
subsequently issued to the private respondents, who then refused
payment of lease rentals to him.

On September 3, 1986, the petitioner protested the erroneous

inclusion of his small landholding under Operation Land transfer and
asked for the recall and cancellation of the Certificates of Land
Transfer in the name of the private respondents. He claims that on
December 24, 1986, his petition was denied without hearing. On
February 17, 1987, he filed a motion for reconsideration, which had not
been acted upon when E.O. Nos. 228 and 229 were issued. These
orders rendered his motion moot and academic because they directly
effected the transfer of his land to the private respondents.
The petitioner now argues that:
(1) E.O. Nos. 228 and 229 were invalidly issued by the President of the
Philippines.
(2) The said executive orders are violative of the constitutional
provision that no private property shall be taken without due process or
just compensation.
(3) The petitioner is denied the right of maximum retention provided for
under the 1987 Constitution.
The petitioner contends that the issuance of E.0. Nos. 228 and 229
shortly before Congress convened is anomalous and arbitrary, besides
violating the doctrine of separation of powers. The legislative power
granted to the President under the Transitory Provisions refers only to
emergency measures that may be promulgated in the proper exercise
of the police power.
The petitioner also invokes his rights not to be deprived of his property
without due process of law and to the retention of his small parcels of
riceholding as guaranteed under Article XIII, Section 4 of the
Constitution. He likewise argues that, besides denying him just
compensation for his land, the provisions of E.O. No. 228 declaring
that:
Lease rentals paid to the landowner by the farmer-beneficiary after
October 21, 1972 shall be considered as advance payment for the
land.

is an unconstitutional taking of a vested property right. It is also his

contention that the inclusion of even small landowners in the program
along with other landowners with lands consisting of seven hectares or
more is undemocratic.
In his Comment, the Solicitor General submits that the petition is
premature because the motion for reconsideration filed with the
Minister of Agrarian Reform is still unresolved. As for the validity of the
issuance of E.O. Nos. 228 and 229, he argues that they were enacted
pursuant to Section 6, Article XVIII of the Transitory Provisions of the
1987 Constitution which reads:
The incumbent president shall continue to exercise legislative powers
until the first Congress is convened.
On the issue of just compensation, his position is that when P.D. No.
27 was promulgated on October 21. 1972, the tenant-farmer of
agricultural land was deemed the owner of the land he was tilling. The
leasehold rentals paid after that date should therefore be considered
amortization payments.
In his Reply to the public respondents, the petitioner maintains that the
motion he filed was resolved on December 14, 1987. An appeal to the
Office of the President would be useless with the promulgation of E.O.
Nos. 228 and 229, which in effect sanctioned the validity of the public
respondent's acts.
G.R. No. 78742
The petitioners in this case invoke the right of retention granted by P.D.
No. 27 to owners of rice and corn lands not exceeding seven hectares
as long as they are cultivating or intend to cultivate the same. Their
respective lands do not exceed the statutory limit but are occupied by
tenants who are actually cultivating such lands.
According to P.D. No. 316, which was promulgated in implementation
of P.D. No. 27:

No tenant-farmer in agricultural lands primarily devoted to rice and

corn shall be ejected or removed from his farmholding until such time
as the respective rights of the tenant- farmers and the landowner shall
have been determined in accordance with the rules and regulations
implementing P.D. No. 27.
The 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. They therefore ask the Court for a writ of
mandamus to compel the respondent to issue the said rules.
In his Comment, the public respondent argues that P.D. No. 27 has
been amended by LOI 474 removing any right of retention from
persons who own other agricultural lands of more than 7 hectares in
aggregate area or lands used for residential, commercial, industrial or
other purposes from which they derive adequate income for their
family. And even assuming that the petitioners do not fall under its
terms, the regulations implementing P.D. No. 27 have already been
issued, to wit, the Memorandum dated July 10, 1975 (Interim
Guidelines on Retention by Small Landowners, with an accompanying
Retention Guide Table), Memorandum Circular No. 11 dated April 21,
1978, (Implementation Guidelines of LOI No. 474), Memorandum
Circular No. 18-81 dated December 29,1981 (Clarificatory Guidelines
on Coverage of P.D. No. 27 and Retention by Small Landowners), and
DAR Administrative Order No. 1, series of 1985 (Providing for a Cut-off
Date for Landowners to Apply for Retention and/or to Protest the
Coverage of their Landholdings under Operation Land Transfer
pursuant to P.D. No. 27). For failure to file the corresponding
applications for retention under these measures, the petitioners are
now barred from invoking this right.
The public respondent also stresses that the petitioners have
prematurely initiated this case notwithstanding the pendency of their
appeal to the President of the Philippines. Moreover, the issuance of
the implementing rules, assuming this has not yet been done, involves
the exercise of discretion which cannot be controlled through the writ of
mandamus. This is especially true if this function is entrusted, as in this
case, to a separate department of the government.

In their Reply, the petitioners insist that the above-cited measures are
not applicable to them because they do not own more than seven
hectares of agricultural land. Moreover, assuming arguendo that the
rules were intended to cover them also, the said measures are
nevertheless not in force because they have not been published as
required by law and the ruling of this Court in Tanada v. Tuvera. 10 As
for LOI 474, the same is ineffective for the additional reason that a
mere letter of instruction could not have repealed the presidential
decree.
I
Although holding neither purse nor sword and so regarded as the
weakest of the three departments of the government, the judiciary is
nonetheless vested with the power to annul the acts of either the
legislative or the executive or of both when not conformable to the
fundamental law. This is the reason for what some quarters call the
doctrine of judicial supremacy. Even so, this power is not lightly
assumed or readily exercised. The doctrine of separation of powers
imposes upon the courts a proper restraint, born of the nature of their
functions and of their respect for the other departments, in striking
down the acts of the legislative and the executive as unconstitutional.
The policy, indeed, is a blend of courtesy and caution. To doubt is to
sustain. The theory is that before the act was done or the law was
enacted, earnest studies were made by Congress or the President, or
both, to insure that the Constitution would not be breached.
In addition, the Constitution itself lays down stringent conditions for a
declaration of unconstitutionality, requiring therefor the concurrence of
a majority of the members of the Supreme Court who took part in the
deliberations and voted on the issue during their session en banc. 11
And as established by judge made doctrine, the Court will assume
jurisdiction over a constitutional question only if it is shown that the
essential requisites of a judicial inquiry into such a question are first
satisfied. Thus, there must be an actual case or controversy involving a
conflict of legal rights susceptible of judicial determination, the
constitutional question must have been opportunely raised by the
proper party, and the resolution of the question is unavoidably
necessary to the decision of the case itself. 12

With particular regard to the requirement of proper party as applied in

the cases before us, we hold that the same is satisfied by the
petitioners and intervenors because each of them has sustained or is
in danger of sustaining an immediate injury as a result of the acts or
measures complained of. 13 And even if, strictly speaking, they are not
covered by the definition, it is still within the wide discretion of the
Court to waive the requirement and so remove the impediment to its
addressing and resolving the serious constitutional questions raised.
In the first Emergency Powers Cases, 14 ordinary citizens and
taxpayers were allowed to question the constitutionality of several
executive orders issued by President Quirino although they were
invoking only an indirect and general interest shared in common with
the public. The Court dismissed the objection that they were not proper
parties and ruled that "the transcendental importance to the public of
these cases demands that they be settled promptly and definitely,
brushing aside, if we must, technicalities of procedure." We have since
then applied this exception in many other cases. 15
The other above-mentioned requisites have also been met in the
present petitions.
In must be stressed that despite the inhibitions pressing upon the
Court when confronted with constitutional issues like the ones now
before it, it will not hesitate to declare a law or act invalid when it is
convinced that this must be done. In arriving at this conclusion, its only
criterion will be the Constitution as God and its conscience give it the
light to probe its meaning and discover its purpose. Personal motives
and political considerations are irrelevancies that cannot influence its
decision. Blandishment is as ineffectual as intimidation.
For all the awesome power of the Congress and the Executive, the
Court will not hesitate to "make the hammer fall, and heavily," to use
Justice Laurel's pithy language, where the acts of these departments,
or of any public official, betray the people's will as expressed in the
Constitution.
It need only be added, to borrow again the words of Justice Laurel,
that

... when the judiciary mediates to allocate constitutional boundaries, it

does not assert any superiority over the other departments; it does not
in reality nullify or invalidate an act of the Legislature, but only asserts
the solemn and sacred obligation assigned to it by the Constitution to
determine conflicting claims of authority under the Constitution and to
establish for the parties in an actual controversy the rights which that
instrument secures and guarantees to them. This is in truth all that is
involved in what is termed "judicial supremacy" which properly is the
power of judicial review under the Constitution. 16
The cases before us categorically raise constitutional questions that
this Court must categorically resolve. And so we shall.
II
We proceed first to the examination of the preliminary issues before
resolving the more serious challenges to the constitutionality of the
several measures involved in these petitions.
The promulgation of P.D. No. 27 by President Marcos in the exercise of
his powers under martial law has already been sustained in Gonzales
v. Estrella and we find no reason to modify or reverse it on that issue.
As for the power of President Aquino to promulgate Proc. No. 131 and
E.O. Nos. 228 and 229, the same was authorized under Section 6 of
the Transitory Provisions of the 1987 Constitution, quoted above.
The said measures were issued by President Aquino before July 27,
1987, when the Congress of the Philippines was formally convened
and took over legislative power from her. They are not "midnight"
enactments intended to pre-empt the legislature because E.O. No. 228
was issued on July 17, 1987, and the other measures, i.e., Proc. No.
131 and E.O. No. 229, were both issued on July 22, 1987. Neither is it
correct to say that these measures ceased to be valid when she lost
her legislative power for, like any statute, they continue to be in force
unless modified or repealed by subsequent law or declared invalid by
the courts. A statute does not ipso facto become inoperative simply
because of the dissolution of the legislature that enacted it. By the
same token, President Aquino's loss of legislative power did not have
the effect of invalidating all the measures enacted by her when and as
long as she possessed it.

Significantly, the Congress she is alleged to have undercut has not

rejected but in fact substantially affirmed the challenged measures and
has specifically provided that they shall be suppletory to R.A. No. 6657
whenever not inconsistent with its provisions. 17 Indeed, some
portions of the said measures, like the creation of the P50 billion fund
in Section 2 of Proc. No. 131, and Sections 20 and 21 of E.O. No. 229,
have been incorporated by reference in the CARP Law. 18
That fund, as earlier noted, is itself being questioned on the ground
that it does not conform to the requirements of a valid appropriation as
specified in the Constitution. Clearly, however, Proc. No. 131 is not an
appropriation measure even if it does provide for the creation of said
fund, for that is not its principal purpose. An appropriation law is one
the primary and specific purpose of which is to authorize the release of
public funds from the treasury. 19 The creation of the fund is only
incidental to the main objective of the proclamation, which is agrarian
reform.
It should follow that the specific constitutional provisions invoked, to
wit, Section 24 and Section 25(4) of Article VI, are not applicable. With
particular reference to Section 24, this obviously could not have been
complied with for the simple reason that the House of Representatives,
which now has the exclusive power to initiate appropriation measures,
had not yet been convened when the proclamation was issued. The
legislative power was then solely vested in the President of the
Philippines, who embodied, as it were, both houses of Congress.
The argument of some of the petitioners that Proc. No. 131 and E.O.
No. 229 should be invalidated because they do not provide for
retention limits as required by Article XIII, Section 4 of the Constitution
is no longer tenable. R.A. No. 6657 does provide for such limits now in
Section 6 of the law, which in fact is one of its most controversial
provisions. This section declares:
Retention Limits. Except as otherwise provided in this Act, no
person may own or retain, directly or indirectly, any public or private
agricultural land, the size of which shall vary according to factors
governing a viable family-sized farm, such as commodity produced,
terrain, infrastructure, and soil fertility as determined by the

Presidential Agrarian Reform Council (PARC) created hereunder, but in

no case shall retention by the landowner exceed five (5) hectares.
Three (3) hectares may be awarded to each child of the landowner,
subject to the following qualifications: (1) that he is at least fifteen (15)
years of age; and (2) that he is actually tilling the land or directly
managing the farm; Provided, That landowners whose lands have
been covered by Presidential Decree No. 27 shall be allowed to keep
the area originally retained by them thereunder, further, That original
homestead grantees or 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.
The argument that E.O. No. 229 violates the constitutional requirement
that a bill shall have only one subject, to be expressed in its title,
deserves only short attention. It is settled that the title of the bill does
not have to be a catalogue of its contents and will suffice if the matters
embodied in the text are relevant to each other and may be inferred
from the title. 20
The Court wryly observes that during the past dictatorship, every
presidential issuance, by whatever name it was called, had the force
and effect of law because it came from President Marcos. Such are the
ways of despots. Hence, it is futile to argue, as the petitioners do in
G.R. No. 79744, that LOI 474 could not have repealed P.D. No. 27
because the former was only a letter of instruction. The important thing
is that it was issued by President Marcos, whose word was law during
that time.
But for all their peremptoriness, these issuances from the President
Marcos still had to comply with the requirement for publication as this
Court held in Tanada v. Tuvera. 21 Hence, unless published in the
Official Gazette in accordance with Article 2 of the Civil Code, they
could not have any force and effect if they were among those
enactments successfully challenged in that case. LOI 474 was
published, though, in the Official Gazette dated November 29,1976.)
Finally, there is the contention of the public respondent in G.R. No.
78742 that the writ of mandamus cannot issue to compel the
performance of a discretionary act, especially by a specific department
of the government. That is true as a general proposition but is subject

to one important qualification. Correctly and categorically stated, the

rule is that mandamus will lie to compel the discharge of the
discretionary duty itself but not to control the discretion to be exercised.
In other words, mandamus can issue to require action only but not
specific action.
Whenever a duty is imposed upon a public official and an unnecessary
and unreasonable delay in the exercise of such duty occurs, if it is a
clear duty imposed by law, the courts will intervene by the
extraordinary legal remedy of mandamus to compel action. If the duty
is purely ministerial, the courts will require specific action. If the duty is
purely discretionary, the courts by mandamus will require action only.
For example, if an inferior court, public official, or board should, for an
unreasonable length of time, fail to decide a particular question to the
great detriment of all parties concerned, or a court should refuse to
take jurisdiction of a cause when the law clearly gave it jurisdiction
mandamus will issue, in the first case to require a decision, and in the
second to require that jurisdiction be taken of the cause. 22
And while it is true that as a rule the writ will not be proper as long as
there is still a plain, speedy and adequate remedy available from the
administrative authorities, resort to the courts may still be permitted if
the issue raised is a question of law. 23
III
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. In the case of City of
Baguio v. NAWASA, 24 for example, where a law required the transfer
of all municipal waterworks systems to the NAWASA in exchange for
its assets of equivalent value, the Court held that the power being
exercised was eminent domain because the property involved was
wholesome and intended for a public use. 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.
In the case of Pennsylvania Coal Co. v. Mahon, 25 Justice Holmes laid
down the limits of the police power in a famous aphorism: "The general
rule at least is that while property may be regulated to a certain extent,
if regulation goes too far it will be recognized as a taking." The
regulation that went "too far" was a law prohibiting mining which might
cause the subsidence of structures for human habitation constructed
on the land surface. This was resisted by a coal company which had
earlier granted a deed to the land over its mine but reserved all mining
rights thereunder, with the grantee assuming all risks and waiving any
damage claim. The Court held the law could not be sustained without
compensating the grantor. Justice Brandeis filed a lone dissent in
which he argued that there was a valid exercise of the police power.
He said:
Every restriction upon the use of property imposed in the exercise of
the police power deprives the owner of some right theretofore enjoyed,
and is, in that sense, an abridgment by the State of rights in property
without making compensation. But restriction imposed to protect the
public health, safety or morals from dangers threatened is not a taking.
The restriction here in question is merely the prohibition of a noxious
use. The property so restricted remains in the possession of its owner.
The state does not appropriate it or make any use of it. The state
merely prevents the owner from making a use which interferes with
paramount rights of the public. Whenever the use prohibited ceases to
be noxious as it may because of further changes in local or social
conditions the restriction will have to be removed and the owner will
again be free to enjoy his property as heretofore.
Recent trends, however, would indicate not a polarization but a
mingling of the police power and the power of eminent domain, with
the latter being used as an implement of the former like the power of
taxation. The employment of the taxing power to achieve a police
purpose has long been accepted. 26 As for the power of expropriation,
Prof. John J. Costonis of the University of Illinois College of Law
(referring to the earlier case of Euclid v. Ambler Realty Co., 272 US
365, which sustained a zoning law under the police power) makes the
following significant remarks:

Euclid, moreover, was decided in an era when judges located the

Police and eminent domain powers on different planets. Generally
speaking, they viewed eminent domain as encompassing public
acquisition of private property for improvements that would be
available for public use," literally construed. To the police power, on the
other hand, they assigned the less intrusive task of preventing harmful
externalities a point reflected in the Euclid opinion's reliance on an
analogy to nuisance law to bolster its support of zoning. So long as
suppression of a privately authored harm bore a plausible relation to
some legitimate "public purpose," the pertinent measure need have
afforded no compensation whatever. With the progressive growth of
government's involvement in land use, the distance between the two
powers has contracted considerably. Today government often employs
eminent domain interchangeably with or as a useful complement to the
police power-- a trend expressly approved in the Supreme Court's
1954 decision in Berman v. Parker, which broadened the reach of
eminent domain's "public use" test to match that of the police power's
standard of "public purpose." 27
The Berman case sustained a redevelopment project and the
improvement of blighted areas in the District of Columbia as a proper
exercise of the police power. On the role of eminent domain in the
attainment of this purpose, Justice Douglas declared:
If those who govern the District of Columbia decide that the Nation's
Capital should be beautiful as well as sanitary, there is nothing in the
Fifth Amendment that stands in the way.
Once the object is within the authority of Congress, the right to realize
it through the exercise of eminent domain is clear.
For the power of eminent domain is merely the means to the end. 28
In Penn Central Transportation Co. v. New York City, 29 decided by a
6-3 vote in 1978, the U.S Supreme Court sustained the respondent's
Landmarks Preservation Law under which the owners of the Grand
Central Terminal had not been allowed to construct a multi-story office
building over the Terminal, which had been designated a historic
landmark. Preservation of the landmark was held to be a valid

objective of the police power. The problem, however, was that the
owners of the Terminal would be deprived of the right to use the
airspace above it although other landowners in the area could do so
over their respective properties. While insisting that there was here no
taking, the Court nonetheless recognized certain compensatory rights
accruing to Grand Central Terminal which it said would "undoubtedly
mitigate" the loss caused by the regulation. This "fair compensation,"
as he called it, was explained by Prof. Costonis in this wise:
In return for retaining the Terminal site in its pristine landmark status,
Penn Central was authorized to transfer to neighboring properties the
authorized but unused rights accruing to the site prior to the Terminal's
designation as a landmark the rights which would have been
exhausted by the 59-story building that the city refused to countenance
atop the Terminal. Prevailing bulk restrictions on neighboring sites
were proportionately relaxed, theoretically enabling Penn Central to
recoup its losses at the Terminal site by constructing or selling to
others the right to construct larger, hence more profitable buildings on
the transferee sites. 30
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.
Whether as an exercise of the police power or of the power of eminent
domain, the several measures before us are challenged as violative of
the due process and equal protection clauses.

The challenge to Proc. No. 131 and E.O. Nos. 228 and 299 on the
ground that no retention limits are prescribed has already been
discussed and dismissed. It is noted that although they excited many
bitter exchanges during the deliberation of the CARP Law in Congress,
the retention limits finally agreed upon are, curiously enough, not being
questioned in these petitions. We therefore do not discuss them here.
The Court will come to the other claimed violations of due process in
connection with our examination of the adequacy of just compensation
as required under the power of expropriation.
The argument of the small farmers that they have been denied equal
protection because of the absence of retention limits has also become
academic under Section 6 of R.A. No. 6657. Significantly, they too
have not questioned the area of such limits. There is also the
complaint that they should not be made to share the burden of
agrarian reform, an objection also made by the sugar planters on the
ground that they belong to a particular class with particular interests of
their own. However, no evidence has been submitted to the Court that
the requisites of a valid classification have been violated.
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. 31 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. 32 The Court finds that all these requisites
have been met by the measures here challenged as arbitrary and
discriminatory.
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. 33 The petitioners 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.
It is worth remarking at this juncture that a statute may be sustained
under the police power only if there is a concurrence of the lawful
subject and the lawful method. Put otherwise, the interests of the
public generally as distinguished from those of a particular class
require the interference of the State and, no less important, the means
employed are reasonably necessary for the attainment of the purpose
sought to be achieved and not unduly oppressive upon individuals. 34
As the subject and purpose of agrarian reform have been laid down by
the Constitution itself, we may say that the first requirement has been
satisfied. What remains to be examined is the validity of the method
employed to achieve the constitutional goal.
One of the basic principles of the democratic system is that where the
rights of the individual are concerned, the end does not justify the
means. It is not enough that there be a valid objective; it is also
necessary that the means employed to pursue it be in keeping with the
Constitution. Mere expediency will not excuse constitutional shortcuts.
There is no question that not even the strongest moral conviction or
the most urgent public need, subject only to a few notable exceptions,
will excuse the bypassing of an individual's rights. It is no exaggeration
to say that a, person invoking a right guaranteed under Article III of the
Constitution is a majority of one even as against the rest of the nation
who would deny him that right.
That right covers the person's life, his liberty and his property under
Section 1 of Article III of the Constitution. With regard to his property,
the owner enjoys the added protection of Section 9, which reaffirms the
familiar rule that private property shall not be taken for public use
without just compensation.
This brings us now to the power of eminent domain.
IV
Eminent domain is an inherent power of the State that enables it to
forcibly acquire private lands intended for public use upon payment of
just compensation to the owner. Obviously, there is no need to

expropriate where the owner is willing to sell under terms also

acceptable to the purchaser, in which case an ordinary deed of sale
may be agreed upon by the parties. 35 It is only where the owner is
unwilling to sell, or cannot accept the price or other conditions offered
by the vendee, that the power of eminent domain will come into play to
assert the paramount authority of the State over the interests of the
property owner. Private rights must then yield to the irresistible
demands of the public interest on the time-honored justification, as in
the case of the police power, that the welfare of the people is the
supreme law.
But for all its primacy and urgency, the power of expropriation is by no
means absolute (as indeed no power is absolute). The limitation is
found in the constitutional injunction that "private property shall not be
taken for public use without just compensation" and in the abundant
jurisprudence that has evolved from the interpretation of this principle.
Basically, the requirements for a proper exercise of the power are: (1)
public use and (2) just compensation.
Let us dispose first of the argument raised by the petitioners in G.R.
No. 79310 that the State should first distribute public agricultural lands
in the pursuit of agrarian reform instead of immediately disturbing
property rights by forcibly acquiring private agricultural lands.
Parenthetically, it is not correct to say that only public agricultural lands
may be covered by the CARP as the Constitution calls for "the just
distribution of all agricultural lands." In any event, the decision to
redistribute private agricultural lands in the manner prescribed by the
CARP was made by the legislative and executive departments in the
exercise of their discretion. We are not justified in reviewing that
discretion in the absence of a clear showing that it has been abused.
A becoming courtesy admonishes us to respect the decisions of the
political departments when they decide what is known as the political
question. As explained by Chief Justice Concepcion in the case of
Taada v. Cuenco: 36
The term "political question" connotes what it means in ordinary
parlance, namely, a question of policy. It refers to "those questions
which, under the Constitution, are to be decided by the people in their
sovereign capacity; or in regard to which full discretionary authority has

been delegated to the legislative or executive branch of the

government." It is concerned with issues dependent upon the wisdom,
not legality, of a particular measure.
It is true that the concept of the political question has been constricted
with the enlargement of judicial power, which now includes the
authority of the courts "to determine whether or not there has been a
grave abuse of discretion amounting to lack or excess of jurisdiction on
the part of any branch or instrumentality of the Government." 37 Even
so, this should not be construed as a license for us to reverse the other
departments simply because their views may not coincide with ours.
The legislature and the executive have been seen fit, in their wisdom,
to include in the CARP the redistribution of private landholdings (even
as the distribution of public agricultural lands is first provided for, while
also continuing apace under the Public Land Act and other cognate
laws). The Court sees no justification to interpose its authority, which
we may assert only if we believe that the political decision is not
unwise, but illegal. We do not find it to be so.
In U.S. v. Chandler-Dunbar Water Power Company, 38 it was held:
Congress having determined, as it did by the Act of March 3,1909 that
the entire St. Mary's river between the American bank and the
international line, as well as all of the upland north of the present ship
canal, throughout its entire length, was "necessary for the purpose of
navigation of said waters, and the waters connected therewith," that
determination is conclusive in condemnation proceedings instituted by
the United States under that Act, and there is no room for judicial
review of the judgment of Congress ... .
As earlier observed, the requirement for public use has already been
settled for us by the Constitution itself No less than the 1987 Charter
calls for agrarian reform, which is the reason why private agricultural
lands are to be taken from their owners, subject to the prescribed
maximum retention limits. The purposes specified in P.D. No. 27, Proc.
No. 131 and R.A. No. 6657 are only an elaboration of the constitutional
injunction that the State adopt the necessary measures "to encourage
and undertake the just distribution of all agricultural lands to enable
farmers who are landless to own directly or collectively the lands they

till." That public use, as pronounced by the fundamental law itself, must
be binding on us.
The second requirement, i.e., the payment of just compensation,
needs a longer and more thoughtful examination.
Just compensation is defined as the full and fair equivalent of the
property taken from its owner by the expropriator. 39 It has been
repeatedly stressed by this Court that the measure is not the taker's
gain but the owner's loss. 40 The word "just" is used to intensify the
meaning of the word "compensation" to convey the idea that the
equivalent to be rendered for the property to be taken shall be real,
substantial, full, ample. 41
It bears repeating that the measures challenged in these petitions
contemplate more than a mere regulation of the use of private lands
under the police power. We deal here with an actual taking of private
agricultural lands that has dispossessed the owners of their property
and deprived them of all its beneficial use and enjoyment, to entitle
them to the just compensation mandated by the Constitution.
As held in Republic of the Philippines v. Castellvi, 42 there is
compensable taking when the following conditions concur: (1) the
expropriator must enter a private property; (2) the entry must be for
more than a momentary period; (3) the entry must be under warrant or
color of legal authority; (4) the property must be devoted to public use
or otherwise informally appropriated or injuriously affected; and (5) the
utilization of the property for public use must be in such a way as to
oust the owner and deprive him of beneficial enjoyment of the property.
All these requisites are envisioned in the measures before us.
Where the State itself is the expropriator, it is not necessary for it to
make a deposit upon its taking possession of the condemned property,
as "the compensation is a public charge, the good faith of the public is
pledged for its payment, and all the resources of taxation may be
employed in raising the amount." 43 Nevertheless, Section 16(e) of the
CARP Law provides that:
Upon receipt by the landowner of the corresponding payment or, in
case of rejection or no response from the landowner, upon the deposit

with an accessible bank designated by the DAR of the compensation

in cash or in LBP bonds in accordance with this Act, the DAR shall take
immediate possession of the land and shall request the proper
Register of Deeds to issue a Transfer Certificate of Title (TCT) in the
name of the Republic of the Philippines. The DAR shall thereafter
proceed with the redistribution of the land to the qualified beneficiaries.
Objection is raised, however, to the manner of fixing the just
compensation, which it is claimed is entrusted to the administrative
authorities in violation of judicial prerogatives. Specific reference is
made to Section 16(d), which provides that in case of the rejection or
disregard by the owner of the offer of the government to buy his land... the DAR shall conduct summary administrative proceedings to
determine the compensation for the land by requiring the landowner,
the LBP and other interested parties to submit evidence as to the just
compensation for the land, within fifteen (15) days from the receipt of
the notice. After the expiration of the above period, the matter is
deemed submitted for decision. The DAR shall decide the case within
thirty (30) days after it is submitted for decision.
To be sure, the determination of just compensation is a function
addressed to the courts of justice and may not be usurped by any
other branch or official of the government. EPZA v. Dulay 44 resolved a
challenge to several decrees promulgated by President Marcos
providing that the just compensation for property under expropriation
should be either the assessment of the property by the government or
the sworn valuation thereof by the owner, whichever was lower. In
declaring these decrees unconstitutional, the Court held through Mr.
Justice Hugo E. Gutierrez, Jr.:
The method of ascertaining just compensation under the aforecited
decrees constitutes impermissible encroachment on judicial
prerogatives. It tends to render this Court inutile in a matter which
under this Constitution is reserved to it for final determination.
Thus, although in an expropriation proceeding the court technically
would still have the power to determine the just compensation for the
property, following the applicable decrees, its task would be relegated
to simply stating the lower value of the property as declared either by

the owner or the assessor. As a necessary consequence, it would be

useless for the court to appoint commissioners under Rule 67 of the
Rules of Court. Moreover, the need to satisfy the due process clause in
the taking of private property is seemingly fulfilled since it cannot be
said that a judicial proceeding was not had before the actual taking.
However, the strict application of the decrees during the proceedings
would be nothing short of a mere formality or charade as the court has
only to choose between the valuation of the owner and that of the
assessor, and its choice is always limited to the lower of the two. The
court cannot exercise its discretion or independence in determining
what is just or fair. Even a grade school pupil could substitute for the
judge insofar as the determination of constitutional just compensation
is concerned.
xxx
In the present petition, we are once again confronted with the same
question of whether the courts under P.D. No. 1533, which contains the
same provision on just compensation as its predecessor decrees, still
have the power and authority to determine just compensation,
independent of what is stated by the decree and to this effect, to
appoint commissioners for such purpose.
This time, we answer in the affirmative.
xxx
It is violative of due process to deny the owner the opportunity to prove
that the valuation in the tax documents is unfair or wrong. And it is
repulsive to the basic concepts of justice and fairness to allow the
haphazard work of a minor bureaucrat or clerk to absolutely prevail
over the judgment of a court promulgated only after expert
commissioners have actually viewed the property, after evidence and
arguments pro and con have been presented, and after all factors and
considerations essential to a fair and just determination have been
judiciously evaluated.
A reading of the aforecited Section 16(d) will readily show that it does
not suffer from the arbitrariness that rendered the challenged decrees
constitutionally objectionable. Although the proceedings are described

as summary, the landowner and other interested parties are

nevertheless allowed an opportunity to submit evidence on the real
value of the property. But more importantly, the determination of the
just compensation by the DAR is not by any means final and
conclusive upon the landowner or any other interested party, for
Section 16(f) clearly provides:
Any party who disagrees with the decision may bring the matter to the
court of proper jurisdiction for final determination of just compensation.
The determination made by the DAR is only preliminary unless
accepted by all parties concerned. Otherwise, the courts of justice will
still have the right to review with finality the said determination in the
exercise of what is admittedly a judicial function.
The second and more serious objection to the provisions on just
compensation is not as easily resolved.
This refers to Section 18 of the CARP Law providing in full as follows:
SEC. 18. Valuation and Mode of Compensation. The LBP shall
compensate the landowner in such amount as may be agreed upon by
the landowner and the DAR and the LBP, in accordance with the
criteria provided for in Sections 16 and 17, and other pertinent
provisions hereof, or as may be finally determined by the court, as the
just compensation for the land.
The compensation shall be paid in one of the following modes, at the
option of the landowner:
(1)

Cash payment, under the following terms and conditions:

(a)
For lands above fifty (50) hectares, insofar as the excess
hectarage is concerned Twenty-five percent (25%) cash, the
balance to be paid in government financial instruments negotiable at
any time.
(b)
For lands above twenty-four (24) hectares and up to fifty (50)
hectares Thirty percent (30%) cash, the balance to be paid in
government financial instruments negotiable at any time.

(c)
For lands twenty-four (24) hectares and below Thirty-five
percent (35%) cash, the balance to be paid in government financial
instruments negotiable at any time.
(2)
Shares of stock in government-owned or controlled
corporations, LBP preferred shares, physical assets or other qualified
investments in accordance with guidelines set by the PARC;
(3)

Tax credits which can be used against any tax liability;

(4)

LBP bonds, which shall have the following features:

(a)
Market interest rates aligned with 91-day treasury bill rates. Ten
percent (10%) of the face value of the bonds shall mature every year
from the date of issuance until the tenth (10th) year: Provided, That
should the landowner choose to forego the cash portion, whether in full
or in part, he shall be paid correspondingly in LBP bonds;
(b)
Transferability and negotiability. Such LBP bonds may be used
by the landowner, his successors-in- interest or his assigns, up to the
amount of their face value, for any of the following:
(i)
Acquisition of land or other real properties of the government,
including assets under the Asset Privatization Program and other
assets foreclosed by government financial institutions in the same
province or region where the lands for which the bonds were paid are
situated;
(ii)
Acquisition of shares of stock of government-owned or
controlled corporations or shares of stock owned by the government in
private corporations;
(iii)
Substitution for surety or bail bonds for the provisional release
of accused persons, or for performance bonds;
(iv)
Security for loans with any government financial institution,
provided the proceeds of the loans shall be invested in an economic
enterprise, preferably in a small and medium- scale industry, in the
same province or region as the land for which the bonds are paid;

(v)
Payment for various taxes and fees to government: Provided,
That the use of these bonds for these purposes will be limited to a
certain percentage of the outstanding balance of the financial
instruments; Provided, further, That the PARC shall determine the
percentages mentioned above;
(vi)
Payment for tuition fees of the immediate family of the original
bondholder in government universities, colleges, trade schools, and
other institutions;
(vii)
Payment for fees of the immediate family of the original
bondholder in government hospitals; and
(viii)

Such other uses as the PARC may from time to time allow.

The contention of the petitioners in G.R. No. 79777 is that the above
provision is unconstitutional insofar as it requires the owners of the
expropriated properties to accept just compensation therefor in less
than money, which is the only medium of payment allowed. In support
of this contention, they cite jurisprudence holding that:
The fundamental rule in expropriation matters is that the owner of the
property expropriated is entitled to a just compensation, which should
be neither more nor less, whenever it is possible to make the
assessment, than the money equivalent of said property. Just
compensation has always been understood to be the just and
complete equivalent of the loss which the owner of the thing
expropriated has to suffer by reason of the expropriation . 45
(Emphasis supplied.)
In J.M. Tuazon Co. v. Land Tenure Administration, 46 this Court held:
It is well-settled that just compensation means the equivalent for the
value of the property at the time of its taking. Anything beyond that is
more, and anything short of that is less, than just compensation. It
means a fair and full equivalent for the loss sustained, which is the
measure of the indemnity, not whatever gain would accrue to the
expropriating entity. The market value of the land taken is the just
compensation to which the owner of condemned property is entitled,

the market value being that sum of money which a person desirous,
but not compelled to buy, and an owner, willing, but not compelled to
sell, would agree on as a price to be given and received for such
property. (Emphasis supplied.)
In the United States, where much of our jurisprudence on the subject
has been derived, the weight of authority is also to the effect that just
compensation for property expropriated is payable only in money and
not otherwise. Thus
The medium of payment of compensation is ready money or cash. The
condemnor cannot compel the owner to accept anything but money,
nor can the owner compel or require the condemnor to pay him on any
other basis than the value of the property in money at the time and in
the manner prescribed by the Constitution and the statutes. When the
power of eminent domain is resorted to, there must be a standard
medium of payment, binding upon both parties, and the law has fixed
that standard as money in cash. 47 (Emphasis supplied.)
Part cash and deferred payments are not and cannot, in the nature of
things, be regarded as a reliable and constant standard of
compensation. 48
"Just compensation" for property taken by condemnation means a fair
equivalent in money, which must be paid at least within a reasonable
time after the taking, and it is not within the power of the Legislature to
substitute for such payment future obligations, bonds, or other valuable
advantage. 49 (Emphasis supplied.)
It cannot be denied from these cases that the traditional medium for
the payment of just compensation is money and no other. And so,
conformably, has just compensation been paid in the past solely in that
medium. However, we do not deal here with the traditional excercise of
the power of eminent domain. This is not an ordinary expropriation
where only a specific property of relatively limited area is sought to be
taken by the State from its owner for a specific and perhaps local
purpose.
What we deal with here is a revolutionary kind of expropriation.

The expropriation before us affects all private agricultural lands

whenever found and of whatever kind as long as they are in excess of
the maximum retention limits allowed their owners. This kind of
expropriation is intended for the benefit not only of a particular
community or of a small segment of the population but of the entire
Filipino nation, from all levels of our society, from the impoverished
farmer to the land-glutted owner. Its purpose does not cover only the
whole territory of this country but goes beyond in time to the
foreseeable future, which it hopes to secure and edify with the vision
and the sacrifice of the present generation of Filipinos. Generations yet
to come are as involved in this program as we are today, although
hopefully only as beneficiaries of a richer and more fulfilling life we will
guarantee to them tomorrow through our thoughtfulness today. And,
finally, let it not be forgotten that it is no less than the Constitution itself
that has ordained this revolution in the farms, calling for "a just
distribution" among the farmers of lands that have heretofore been the
prison of their dreams but can now become the key at least to their
deliverance.

compensation, with other things of value. We may also suppose that

what they had in mind was a similar scheme of payment as that
prescribed in P.D. No. 27, which was the law in force at the time they
deliberated on the new Charter and with which they presumably
agreed in principle.

Such a program will involve not mere millions of pesos. The cost will
be tremendous. Considering the vast areas of land subject to
expropriation under the laws before us, we estimate that hundreds of
billions of pesos will be needed, far more indeed than the amount of
P50 billion initially appropriated, which is already staggering as it is by
our present standards. Such amount is in fact not even fully available
at this time.

On the other hand, there is nothing in the records either that militates
against the assumptions we are making of the general sentiments and
intention of the members on the content and manner of the payment to
be made to the landowner in the light of the magnitude of the
expenditure and the limitations of the expropriator.

We assume that the framers of the Constitution were aware of this

difficulty when they called for agrarian reform as a top priority project of
the government. It is a part of this assumption that when they
envisioned the expropriation that would be needed, they also intended
that the just compensation would have to be paid not in the orthodox
way but a less conventional if more practical method. There can be no
doubt that they were aware of the financial limitations of the
government and had no illusions that there would be enough money to
pay in cash and in full for the lands they wanted to be distributed
among the farmers. We may therefore assume that their intention was
to allow such manner of payment as is now provided for by the CARP
Law, particularly the payment of the balance (if the owner cannot be
paid fully with money), or indeed of the entire amount of the just

The Court has not found in the records of the Constitutional

Commission any categorical agreement among the members
regarding the meaning to be given the concept of just compensation as
applied to the comprehensive agrarian reform program being
contemplated. There was the suggestion to "fine tune" the requirement
to suit the demands of the project even as it was also felt that they
should "leave it to Congress" to determine how payment should be
made to the landowner and reimbursement required from the farmerbeneficiaries. Such innovations as "progressive compensation" and
"State-subsidized compensation" were also proposed. In the end,
however, no special definition of the just compensation for the lands to
be expropriated was reached by the Commission. 50

With these assumptions, the Court hereby declares that the content
and manner of the just compensation provided for in the afore- quoted
Section 18 of the CARP Law is not violative of the Constitution. We do
not mind admitting that a certain degree of pragmatism has influenced
our decision on this issue, but after all this Court is not a cloistered
institution removed from the realities and demands of society or
oblivious to the need for its enhancement. The Court is as acutely
anxious as the rest of our people to see the goal of agrarian reform
achieved at last after the frustrations and deprivations of our peasant
masses during all these disappointing decades. We are aware that
invalidation of the said section will result in the nullification of the entire
program, killing the farmer's hopes even as they approach realization
and resurrecting the spectre of discontent and dissent in the restless
countryside. That is not in our view the intention of the Constitution,
and that is not what we shall decree today.

Accepting the theory that payment of the just compensation is not

always required to be made fully in money, we find further that the
proportion of cash payment to the other things of value constituting the
total payment, as determined on the basis of the areas of the lands
expropriated, is not unduly oppressive upon the landowner. It is noted
that the smaller the land, the bigger the payment in money, primarily
because the small landowner will be needing it more than the big
landowners, who can afford a bigger balance in bonds and other things
of value. No less importantly, the government financial instruments
making up the balance of the payment are "negotiable at any time."
The other modes, which are likewise available to the landowner at his
option, are also not unreasonable because payment is made in shares
of stock, LBP bonds, other properties or assets, tax credits, and other
things of value equivalent to the amount of just compensation.
Admittedly, the compensation contemplated in the law will cause the
landowners, big and small, not a little inconvenience. As already
remarked, this cannot be avoided. Nevertheless, it is devoutly hoped
that these countrymen of ours, conscious as we know they are of the
need for their forebearance and even sacrifice, will not begrudge us
their indispensable share in the attainment of the ideal of agrarian
reform. Otherwise, our pursuit of this elusive goal will be like the quest
for the Holy Grail.
The complaint against the effects of non-registration of the land under
E.O. No. 229 does not seem to be viable any more as it appears that
Section 4 of the said Order has been superseded by Section 14 of the
CARP Law. This repeats the requisites of registration as embodied in
the earlier measure but does not provide, as the latter did, that in case
of failure or refusal to register the land, the valuation thereof shall be
that given by the provincial or city assessor for tax purposes. On the
contrary, the CARP Law says that the just compensation shall be
ascertained on the basis of the factors mentioned in its Section 17 and
in the manner provided for in Section 16.
The last major challenge to CARP is that the landowner is divested of
his property even before actual payment to him in full of just
compensation, in contravention of a well- accepted principle of eminent
domain.

The recognized rule, indeed, is that title to the property expropriated

shall pass from the owner to the expropriator only upon full payment of
the just compensation. Jurisprudence on this settled principle is
consistent both here and in other democratic jurisdictions. Thus:
Title to property which is the subject of condemnation proceedings
does not vest the condemnor until the judgment fixing just
compensation is entered and paid, but the condemnor's title relates
back to the date on which the petition under the Eminent Domain Act,
or the commissioner's report under the Local Improvement Act, is filed.
51
... although the right to appropriate and use land taken for a canal is
complete at the time of entry, title to the property taken remains in the
owner until payment is actually made. 52 (Emphasis supplied.)
In Kennedy v. Indianapolis, 53 the US Supreme Court cited several
cases holding that title to property does not pass to the condemnor
until just compensation had actually been made. In fact, the decisions
appear to be uniformly to this effect. As early as 1838, in Rubottom v.
McLure, 54 it was held that "actual payment to the owner of the
condemned property was a condition precedent to the investment of
the title to the property in the State" albeit "not to the appropriation of it
to public use." In Rexford v. Knight, 55 the Court of Appeals of New
York said that the construction upon the statutes was that the fee did
not vest in the State until the payment of the compensation although
the authority to enter upon and appropriate the land was complete
prior to the payment. Kennedy further said that "both on principle and
authority the rule is ... that the right to enter on and use the property is
complete, as soon as the property is actually appropriated under the
authority of law for a public use, but that the title does not pass from
the owner without his consent, until just compensation has been made
to him."
Our own Supreme Court has held in Visayan Refining Co. v. Camus
and Paredes, 56 that:
If the laws which we have exhibited or cited in the preceding
discussion are attentively examined it will be apparent that the method

of expropriation adopted in this jurisdiction is such as to afford absolute

reassurance that no piece of land can be finally and irrevocably taken
from an unwilling owner until compensation is paid ... . (Emphasis
supplied.)
It is true that P.D. No. 27 expressly ordered the emancipation of tenantfarmer as October 21, 1972 and declared that he shall "be deemed the
owner" of a portion of land consisting of a family-sized farm except that
"no title to the land owned by him was to be actually issued to him
unless and until he had become a full-fledged member of a duly
recognized farmers' cooperative." It was understood, however, that full
payment of the just compensation also had to be made first,
conformably to the constitutional requirement.
When E.O. No. 228, categorically stated in its Section 1 that:
All qualified farmer-beneficiaries are now deemed full owners as of
October 21, 1972 of the land they acquired by virtue of Presidential
Decree No. 27. (Emphasis supplied.)
it was obviously referring to lands already validly acquired under the
said decree, after proof of full-fledged membership in the farmers'
cooperatives and full payment of just compensation. Hence, it was also
perfectly proper for the Order to also provide in its Section 2 that the
"lease rentals paid to the landowner by the farmer- beneficiary after
October 21, 1972 (pending transfer of ownership after full payment of
just compensation), shall be considered as advance payment for the
land."
The CARP Law, for its part, conditions the transfer of possession and
ownership of the land to the government on receipt by the landowner
of the corresponding payment or the deposit by the DAR of the
compensation in cash or LBP bonds with an accessible bank. Until
then, title also remains with the landowner. 57 No outright change of
ownership is contemplated either.
Hence, the argument that the assailed measures violate due process
by arbitrarily transferring title before the land is fully paid for must also
be rejected.

It is worth stressing at this point that all rights acquired by the tenantfarmer under P.D. No. 27, as recognized under E.O. No. 228, are
retained by him even now under R.A. No. 6657. This should counterbalance the express provision in Section 6 of the said law that "the
landowners whose lands have been covered by Presidential Decree
No. 27 shall be allowed to keep the area originally retained by them
thereunder, further, That original homestead grantees or 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."
In connection with these retained rights, it does not appear in G.R. No.
78742 that the appeal filed by the petitioners with the Office of the
President has already been resolved. Although we have said that the
doctrine of exhaustion of administrative remedies need not preclude
immediate resort to judicial action, there are factual issues that have
yet to be examined on the administrative level, especially the claim that
the petitioners are not covered by LOI 474 because they do not own
other agricultural lands than the subjects of their petition.
Obviously, the Court cannot resolve these issues. In any event,
assuming that the petitioners have not yet exercised their retention
rights, if any, under P.D. No. 27, the Court holds that they are entitled
to the new retention rights provided for by R.A. No. 6657, which in fact
are on the whole more liberal than those granted by the decree.
V
The CARP Law and the other enactments also involved in these cases
have been the subject of bitter attack from those who point to the
shortcomings of these measures and ask that they be scrapped
entirely. To be sure, these enactments are less than perfect; indeed,
they should be continuously re-examined and rehoned, that they may
be sharper instruments for the better protection of the farmer's rights.
But we have to start somewhere. In the pursuit of agrarian reform, we
do not tread on familiar ground but grope on terrain fraught with pitfalls
and expected difficulties. This is inevitable. The CARP Law is not a
tried and tested project. On the contrary, to use Justice Holmes's
words, "it is an experiment, as all life is an experiment," and so we
learn as we venture forward, and, if necessary, by our own mistakes.

We cannot expect perfection although we should strive for it by all

means. Meantime, we struggle as best we can in freeing the farmer
from the iron shackles that have unconscionably, and for so long,
fettered his soul to the soil.
By the decision we reach today, all major legal obstacles to the
comprehensive agrarian reform program are removed, to clear the way
for the true freedom of the farmer. We may now glimpse the day he will
be released not only from want but also from the exploitation and
disdain of the past and from his own feelings of inadequacy and
helplessness. At last his servitude will be ended forever. At last the
farm on which he toils will be his farm. It will be his portion of the
Mother Earth that will give him not only the staff of life but also the joy
of living. And where once it bred for him only deep despair, now can he
see in it the fruition of his hopes for a more fulfilling future. Now at last
can he banish from his small plot of earth his insecurities and dark
resentments and "rebuild in it the music and the dream."
WHEREFORE, the Court holds as follows:
1.
R.A. No. 6657, P.D. No. 27, Proc. No. 131, and E.O. Nos. 228
and 229 are SUSTAINED against all the constitutional objections
raised in the herein petitions.
2. Title to all expropriated properties shall be transferred to the State
only upon full payment of compensation to their respective owners.
3. All rights previously acquired by the tenant- farmers under P.D. No.
27 are retained and recognized.
4. Landowners who were unable to exercise their rights of retention
under P.D. No. 27 shall enjoy the retention rights granted by R.A. No.
6657 under the conditions therein prescribed.
5. Subject to the above-mentioned rulings all the petitions are
DISMISSED, without pronouncement as to costs.
SO ORDERED.

Fernan, (C.J.), Narvasa, Melencio-Herrera, Gutierrez, Jr., Paras,

Feliciano, Gancayco, Padilla, Bidin, Sarmiento, Cortes, Grio-Aquino,
Medialdea and Regalado, JJ., concur.

EN BANC

[G.R. No. 86889. December 4, 1990.]

LUZ FARMS, petitioner, vs. THE HONORABLE SECRETARY OF

THE DEPARTMENT OF AGRARIAN REFORM, respondent.

Enrique M. Belo for petitioner.

DECISION

PARAS, J p:
This is a petition for prohibition with prayer for restraining order
and/or preliminary and permanent injunction against the Honorable
Secretary of the Department of Agrarian Reform for acting without
jurisdiction in enforcing the assailed provisions of R.A. No. 6657,
otherwise known as the Comprehensive Agrarian Reform Law of 1988
and in promulgating the Guidelines and Procedure Implementing
Production and Profit Sharing under R.A. No. 6657, insofar as the
same apply to herein petitioner, and further from performing an act in
violation of the constitutional rights of the petitioner.
As gathered from the records, the factual background of this case,
is as follows:
On June 10, 1988, the President of the Philippines approved R.A.
No. 6657, which includes the raising of livestock, poultry and swine in
its coverage (Rollo, p. 80).

On January 2, 1989, the Secretary of Agrarian Reform

promulgated the Guidelines and Procedures Implementing Production
and Profit Sharing as embodied in Sections 13 and 32 of R.A. No.
6657 (Rollo, p. 80).
On January 9, 1989, the Secretary of Agrarian Reform
promulgated its Rules and Regulations implementing Section 11 of
R.A. No. 6657 (Commercial Farms). (Rollo, p. 81).
Luz Farms, petitioner in this case, is a corporation engaged in the
livestock and poultry business and together with others in the same
business allegedly stands to be adversely affected by the enforcement
of Section 3(b), Section 11, Section 13, Section 16(d) and 17 and
Section 32 of R.A. No. 6657 otherwise known as Comprehensive
Agrarian Reform Law and of the Guidelines and Procedures
Implementing Production and Profit Sharing under R.A. No. 6657
promulgated on January 2, 1989 and the Rules and Regulations
Implementing Section 11 thereof as promulgated by the DAR on
January 9, 1989 (Rollo, pp. 2-36).
Hence, this petition praying that aforesaid laws, guidelines and
rules be declared unconstitutional. Meanwhile, it is also prayed that a
writ of preliminary injunction or restraining order be issued enjoining
public respondents from enforcing the same, insofar as they are made
to apply to Luz Farms and other livestock and poultry raisers.
This Court in its Resolution dated July 4, 1939 resolved to deny,
among others, Luz Farms' prayer for the issuance of a preliminary
injunction in its Manifestation dated May 26, and 31, 1989. (Rollo, p.
98).
Later, however, this Court in its Resolution dated August 24, 1989
resolved to grant said Motion for Reconsideration regarding the
injunctive relief, after the filing and approval by this Court of an
injunction bond in the amount of P100,000.00. This Court also gave
due course to the petition and required the parties to file their
respective memoranda (Rollo, p. 119).
The petitioner filed its Memorandum on September 6, 1989
(Rollo, pp. 131-168).

On December 22, 1989, the Solicitor General adopted his

Comment to the petition as his Memorandum (Rollo, pp. 186-187).
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 productionsharing 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: Provided, That these individuals or entities realize
gross sales in excess of five million pesos per annum unless the DAR,
upon proper application, determine a lower ceiling.
In the event that the individual or entity realizes a profit, an additional
ten (10%) of the net profit after tax shall be distributed to said regular
and other farmworkers within ninety (90) days of the end of the fiscal
year . . ."
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 as well as the
Implementing Rules and Guidelines promulgated in accordance
therewith.
The constitutional provision under consideration reads as follows:

ARTICLE XIII
xxx
xxx
xxx
AGRARIAN AND NATURAL RESOURCES REFORM
Section 4.
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.
To this end, the State shall encourage and undertake the just
distribution of all agricultural lands, subject to such priorities and
reasonable retention limits as the Congress may prescribe, taking into
account ecological, developmental, or equity considerations, and
subject to the payment of just compensation. In determining retention
limits, the State shall respect the rights of small landowners. The State
shall further provide incentives for voluntary land-sharing.
xxx
xxx
xxx"
Luz Farms contended that it does not seek the nullification of R.A.
6657 in its entirety. In fact, it acknowledges the correctness of the
decision of this Court in the case of the Association of Small
Landowners in the Philippines, Inc. vs. Secretary of Agrarian Reform
(G.R. 78742, 14 July 1989) affirming the constitutionality of the
Comprehensive Agrarian Reform Law. It, however, argued that
Congress in enacting the said law has transcended the mandate of the
Constitution, in including land devoted to the raising of livestock,
poultry and swine in its coverage (Rollo, p. 131). Livestock or poultry
raising is not similar to crop or tree farming. Land is not the primary
resource in this undertaking and represents no more than five percent
(5%) of the total investment of commercial livestock and poultry
raisers. Indeed, there are many owners of residential lands all over the
country who use available space in their residence for commercial
livestock and raising purposes, under "contract-growing
arrangements," whereby processing corporations and other
commercial livestock and poultry raisers (Rollo, p. 10). Lands support
the buildings and other amenities attendant to the raising of animals
and birds. The use of land is incidental to but not the principal factor or
consideration in productivity in this industry. Including backyard raisers,
about 80% of those in commercial livestock and poultry production
occupy five hectares or less. The remaining 20% are mostly corporate
farms (Rollo, p. 11).

On the other hand, the public respondent argued that livestock

and poultry raising is embraced in the term "agriculture" and the
inclusion of such enterprise under Section 3(b) of R.A. 6657 is proper.
He cited that Webster's International Dictionary, Second Edition (1954),
defines the following words:

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.

"Agriculture the art or science of cultivating the ground and raising

and harvesting crops, often, including also, feeding, breeding and
management of livestock, tillage, husbandry, farming.
It includes farming, horticulture, forestry, dairying, sugarmaking . . .
Livestock domestic animals used or raised on a farm, especially for
profit.
Farm a plot or tract of land devoted to the raising of domestic or
other animals." (Rollo, pp. 82-83).
The petition is impressed with merit.

The Committee adopted the definition of "agricultural land" as

defined under Section 166 of R.A. 3844, as laud devoted to any
growth, including but not limited to crop lands, saltbeds, fishponds, idle
and abandoned land (Record, CONCOM, August 7, 1986, Vol. III, p.
11).

The question raised is one of constitutional construction. The

primary task in constitutional construction is to ascertain and thereafter
assure the realization of the purpose of the framers in the adoption of
the Constitution (J.M. Tuazon & Co. vs. Land Tenure Administration, 31
SCRA 413 [1970]).
Ascertainment of the meaning of the provision of Constitution
begins with the language of the document itself. The words used in the
Constitution are to be given their ordinary meaning except where
technical terms are employed in which case the significance thus
attached to them prevails (J.M. Tuazon & Co. vs. Land Tenure
Administration, 31 SCRA 413 [1970]).
It is generally held that, in construing constitutional provisions
which are ambiguous or of doubtful meaning, the courts may consider
the debates in the constitutional convention as throwing light on the
intent of the framers of the Constitution. It is true that the intent of the
convention is not controlling by itself, but as its proceeding was
preliminary to the adoption by the people of the Constitution the
understanding of the convention as to what was meant by the terms of
the constitutional provision which was the subject of the deliberation,
goes a long way toward explaining the understanding of the people
when they ratified it (Aquino, Jr. v. Enrile, 59 SCRA 183 [1974]).

The intention of the Committee is to limit the application of the

word "agriculture." Commissioner Jamir proposed to insert the word
"ARABLE" to distinguish this kind of agricultural land from such lands
as commercial and industrial lands and residential properties because
all of them fall under the general classification of the word
"agricultural". This proposal, however, was not considered because the
Committee contemplated that agricultural lands are limited to arable
and suitable agricultural lands and therefore, do not include
commercial, industrial and residential lands (Record, CONCOM,
August 7, 1986, Vol. III, p. 30).
In the interpellation, then Commissioner Regalado (now a
Supreme Court Justice), posed several questions, among others,
quoted as follows:
xxx
xxx
xxx
"Line 19 refers to genuine reform program founded on the primary right
of farmers and farmworkers. I wonder if it means that leasehold
tenancy is thereby proscribed under this provision because it speaks of
the primary right of farmers and farmworkers to own directly or
collectively the lands they till. As also mentioned by Commissioner
Tadeo, farmworkers include those who work in piggeries and poultry
projects.
I was wondering whether I am wrong in my appreciation that if
somebody puts up a piggery or a poultry project and for that purpose
hires farmworkers therein, these farmworkers will automatically have
the right to own eventually, directly or ultimately or collectively, the land

on which the piggeries and poultry projects were constructed. (Record,

CONCOM, August 2, 1986, p. 618).
xxx
xxx
xxx
The questions were answered and explained in the statement of
then Commissioner Tadeo, quoted as follows:
xxx
xxx
xxx
"Sa pangalawang katanungan ng Ginoo ay medyo hindi kami
nagkaunawaan. 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 (Record, CONCOM, August 2, 1986, Vol. II, p. 621).
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. (Rollo, p. 21).
Hence, there is merit in Luz Farms' argument that the requirement
in Sections 13 and 32 of R.A. 6657 directing "corporate farms" which
include livestock and poultry raisers to execute and implement
"production-sharing plans" (pending final redistribution of their
landholdings) whereby they are called upon to distribute from three
percent (3%) of their gross sales and ten percent (10%) of their net
profits to their workers as additional compensation is unreasonable for
being confiscatory, and therefore violative of due process (Rollo, p.
21).
It has been established that this Court will assume jurisdiction
over a constitutional question only if it is shown that the essential
requisites of a judicial inquiry into such a question are first satisfied.
Thus, there must be an actual case or controversy involving a conflict
of legal rights susceptible of judicial determination, the constitutional
question must have been opportunely raised by the proper party, and
the resolution of the question is unavoidably necessary to the decision
of the case itself (Association of Small Landowners of the Philippines,
Inc. v. Secretary of Agrarian Reform, G.R. 78742; Acuna v. Arroyo,

G.R. 79310; Pabico v. Juico, G.R. 79744; Manaay v. Juico, G.R.

79777, 14 July 1989, 175 SCRA 343).
However, despite the inhibitions pressing upon the Court when
confronted with constitutional issues, it will not hesitate to declare a law
or act invalid when it is convinced that this must be done. In arriving at
this conclusion, its only criterion will be the Constitution and God as its
conscience gives it in the light to probe its meaning and discover its
purpose. Personal motives and political considerations are
irrelevancies that cannot influence its decisions. Blandishment is as
ineffectual as intimidation, for all the awesome power of the Congress
and Executive, the Court will not hesitate "to make the hammer fall
heavily," where the acts of these departments, or of any official, betray
the people's will as expressed in the Constitution (Association of Small
Landowners of the Philippines, Inc. v. Secretary of Agrarian Reform,
G.R. 78742; Acuna v. Arroyo, G.R. 79310; Pabico v. Juico, G.R. 79744;
Manaay v. Juico, G.R. 79777, 14 July 1989).
Thus, where the legislature or the executive acts beyond the scope of
its constitutional powers, it becomes the duty of the judiciary to declare
what the other branches of the government had assumed to do, as
void. This is the essence of judicial power conferred by the Constitution
"(I)n one Supreme Court and in such lower courts as may be
established by law" (Art. VIII, Section 1 of the 1935 Constitution; Article
X, Section I of the 1973 Constitution and which was adopted as part of
the Freedom Constitution, and Article VIII, Section 1 of the 1987
Constitution) and which power this Court has exercised in many
instances (Demetria v. Alba, 148 SCRA 208 [1987]).
PREMISES CONSIDERED, the instant petition is hereby
GRANTED. 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 therewith, are hereby DECLARED null and
void for being unconstitutional and the writ of preliminary injunction
issued is hereby MADE permanent.
SO ORDERED.

Fernan (C.J.), Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz,

Gancayco, Padilla, Bidin, Grio-Aquino, Medialdea and Regalado, JJ.,
concur.
Feliciano, J., is on leave.

Separate Opinions

SARMIENTO, J., concurring:

I agree that the petition be granted.
It is my opinion however that the main issue on the validity of the
assailed provisions of R.A. 6657 (the Comprehensive Agrarian Reform
Law of 1988) and its Implementing Rules and Guidelines insofar as
they include the raising of livestock, poultry, and swine in their
coverage can not be simplistically reduced to a question of
constitutional construction.
It is a well-settled rule that construction and interpretation come
only after it has been demonstrated that application is impossible or
inadequate without them. A close reading however of the constitutional
text in point, specifically, Sec. 4, Art. XIII, particularly the phrase, ". . . in
case of other farmworkers, to receive a just share of the fruits thereof,"
provides a basis for the clear and possible coverage of livestock,
poultry, and swine raising within the ambit of the comprehensive
agrarian reform program. This accords with the principle that every
presumption should be indulged in favor of the constitutionality of a
statute and the court in considering the validity of a statute should give
it such reasonable construction as can be reached to bring it within the
fundamental law. 1
The presumption against unconstitutionality, I must say, assumes
greater weight when a ruling to the contrary would, in effect, defeat the
laudable and noble purpose of the law, i.e., the welfare of the landless
farmers and farmworkers in the promotion of social justice, by the

expedient conversion of agricultural lands into livestock, poultry, and

swine raising by scheming landowners, thus, rendering the
comprehensive nature of the agrarian program merely illusory.
The instant controversy, I submit, boils down to the question of
whether or not the assailed provisions violate the equal protection
clause of the Constitution (Article II, section 1) which teaches simply
that all persons or things similarly situated should be treated alike, both
as to rights conferred and responsibilities imposed. 2
There is merit in the contention of the petitioner that substantial
distinctions exist between land directed purely to cultivation and
harvesting of fruits or crops and land exclusively used for livestock,
poultry and swine raising, that make real differences, to wit:
xxx
xxx
xxx
No land is tilled and no crop is harvested in livestock and poultry
farming. There are no tenants nor landlords, only employers and
employees.
Livestock and poultry do not sprout from land nor are they "fruits of the
land."
Land is not even a primary resource in this industry. The land input is
inconsequential that all the commercial hog and poultry farms
combined occupy less than one percent (1%) (0.4% for piggery, 0.2%
for poultry) of the 5.45 million hectares of land supposedly covered by
the CARP. And most farms utilize only 2 to 5 hectares of land.
In every respect livestock and poultry production is an industrial
activity. Its use of an inconsequential portion of land is a mere incident
of its operation, as in any other undertaking, business or otherwise.
The fallacy of defining livestock and poultry production as an
agricultural enterprise is nowhere more evident when one considers
that at least 95% of total investment in these farms is in the form of
fixed assets which are industrial in nature.
These include (1) animal housing structures and facilities complete
with drainage, waterers, blowers, misters and in some cases even
piped-in music; (2) feedmills complete with grinders, mixers,
conveyors, exhausts, generators, etc.; (3) extensive warehousing
facilities for feeds and other supplies; (4) anti-pollution equipment such
as bio-gas and digester plants augmented by lagoons and concrete
ponds; (5) deepwells, elevated water tanks, pumphouses and

accessory facilities; (6) modern equipment such as sprayers,

pregnancy testers, etc.; (7) laboratory facilities complete with
expensive tools and equipment; and a myriad other such
technologically advanced appurtances.
How then can livestock and poultry farmlands be arable when such are
almost totally occupied by these structures?
The fallacy of equating the status of livestock and poultry farmworkers
with that of agricultural tenants surfaces when one considers
contribution to output. Labor cost of livestock and poultry farms is no
more than 4% of total operating cost. The 98% balance represents
inputs not obtained from the land nor provided by the farmworkers
inputs such as feeds and biochemicals (80% of the total cost), power
cost, cost of money and several others.
Moreover, livestock and poultry farmworkers are covered by minimum
wage law rather than by tenancy law. They are entitled to social
security benefits where tenant-farmers are not. They are paid fixed
wages rather than crop shares. And as in any other industry, they
receive additional benefits such as allowances, bonuses, and other
incentives such as free housing privileges, light and water.
Equating livestock and poultry farming with other agricultural activities
is also fallacious in the sense that like the manufacturing sector, it is a
market for, rather than a source of agricultural output. At least 60% of
the entire domestic supply of corn is absorbed by livestock and poultry
farms. So are the by-products of rice (rice-bran), coconut (copra meal),
banana (banana pulp meal), and fish (fish meal). 3
xxx
xxx
xxx
In view of the foregoing, it is clear that both kinds of lands are not
similarly situated and hence, can not be treated alike. Therefore, the
assailed provisions which allow for the inclusion of livestock and
poultry industry within the coverage of the agrarian reform program
constitute invalid classification and must accordingly be struck down as
repugnant to the equal protection clause of the Constitution.

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' predecessorsin-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.

THIRD DIVISION
[G.R. No. 139083. August 30, 2001]

2. Declaring the validity of the Emancipation Patents issued to private

respondents; and

FLORENCIA PARIS, petitioner, vs. DIONISIO A. ALFECHE, JUAN

L. ALFECHE, MAXIMO N. PADILLA, DIONISIO Q. MATILOS, Heirs
of GREG A. ALFECHE, DIONISIO W. MATILO, SIMPLICIO L.
ADAYA, TEOFILO M. DE GUZMAN, FRANCISCO B. DINGLE and
MARIFE NAVARO, respondents.

3. Dismissing the case.[3]

DECISION
PANGANIBAN, J.:

Petitioner is the registered owner of a parcel of land situated at Paitan,

Quezon, Bukidnon with an area of 10.6146 hectares, more or less,
covered by Transfer Certificate of Title No. T-8275 and another
property with an area of 13.2614 hectares covered by Original
Certificate of Title No. P-4985, also located at Paitan, Quezon,
Bukidnon; the said parcels are fully tenanted by private respondents
herein who are recipients of Emancipation Patents in their names
pursuant to Operation Land Transfer under P.D. 27 (Annexes A, A-1 to
A-18) notwithstanding the fact that neither the tenants nor the Land
Bank of the Philippines (LBP) [has] paid a single centavo for the said
land. Petitioner and the tenants have not signed any Land Transfer
Production Agreement. Petitioner and her children have been deprived
of their property without due process of law and without just
compensation, especially so that the tenants have already stopped
paying rentals as of December 1988 to the damage and prejudice of
petitioner.

Homesteads are not exempt from the operation of the Land Reform
Law. The right to retain seven hectares of land is subject to the
condition that the landowner is actually cultivating that area or will
cultivate it upon the effectivity of the said law.
The Case
The Petition for Review before us assails the June 4, 1999 Decision of
the Court of Appeals[1] (CA), in CA-GR SP No. 45738, which affirmed
the ruling of the Department of Agrarian Reform Adjudication Board
(DARAB). The decretal portion of the CA Decision reads:
WHEREFORE, [there being] no grave abuse of discretion x x x
committed by DARAB, the instant petition is hereby DENIED DUE
COURSE and DISMISSED. Costs against the petitioner.[2]
The Decision of the DARAB, which was affirmed by the CA, had
disposed as follows:
WHEREFORE, premises considered, the assailed Decision dated
March 19, 1992 is hereby REVERSED and SET ASIDE, and a new
one is entered:
1. Declaring the private respondents to be full owners of the land they
till pursuant to Presidential Decree No. 27 and Executive Order No.
228;

The Facts
The Court of Appeals narrates the facts thus:

Petitioner contends that since she is entitled to a retention of seven (7)

hectares under P.D. 27 and/or 5 hectares and 3 hectares each for her
children under the Comprehensive Agrarian Reform Law (CARL), the
tenants are not supposed to acquire the subject land and the
Emancipation Patents precipitately issued to them are null and void for
being contrary to law. Petitioner further alleged that she owns the
subject property covered by OCT No. P-4985 as original homestead
grantee who still owned the same when Republic Act No. 6657 was
approved, thus she is entitled to retain the area to the exclusion of her
tenants. As regards TCT No. 8275, petitioner has applied for retention
of seven hectares per Letter of Retention attached as Annex B, that
the lands subject of the instant petition are covered by Homestead
Patents, and as decided by the Supreme Court in the cases of Patricio
vs. Bayug (112 SCRA 41) and Alita vs. Court of Appeals (170 SCRA

706), the homesteaders and their heirs have the right to cultivate their
homesteads personally, which is a superior right over that of tenantfarmers.
Petitioner moved for the cancellation and recall of the Emancipation
Patents issued to private respondents-farmers and to restore to
petitioner and her children the ownership and cultivation of the subject
lots plus payment of back rentals from the time they stopped paying
the same until ejected therefrom.
Respondents filed their answer dated May 29, 1991 and admitted the
generation and issuance of Emancipation Patents to private
respondents as tenant-farmers thereof and the Supreme Court rulings
on the Bayug and Alita cases relative to homestead patents, but
denied the rest of the material allegations for want of knowledge or
information as to the truth relative thereto. Respondents alleged that
when the subject lands were covered under P.D. 27, the petitioner was
repeatedly informed and invited by the DAR Office at Valencia,
Bukidnon to thresh out the matter; that petitioners right to retain seven
(7) hectares is not absolute since she owns other agricultural
landholdings, thus disqualifying her to retain the area, aside from the
fact that she has other properties sufficient to support her family as
shown in the Certification of the Provincial Assessors Office listing
down the petitioners landholdings (Annex 2). By way of special
affirmative defenses, respondents averred that the criteria set forth
under P.D. 27 were observed before the generation of the
Emancipation Patents; that under Executive Order No. 228, the tenantfarmers under P.D. 27 are deemed full owners of the lands they till and
the lease rentals paid by them should be considered as amortization
payments; that under LOI 474, petitioner who owns more than seven
(7) hectares of lands are not entitled to retention. Respondents prayed
for the dismissal of the case. They likewise prayed that the
Emancipation Patents issued to private respondents and their peaceful
possession of their farm lots be respected.
The Adjudicator a quo conducted a hearing and afforded the parties
their day in court and the opportunity to present their evidence. On
August 13, 1991, the Adjudicator a quo issued an Order for the parties
to submit their respective position papers with evidence to buttress

their allegations. On March 10, 1992, the Adjudicator a quo rendered

the decision, thus:
WHEREFORE, in the light of the foregoing, this Adjudicator declares
the following:
1. That all the Emancipation Patents issued to tenants-respondents
shall be cancelled and recalled;
2. That the Register of Deeds of Malaybalay, Bukidnon shall cancel all
Emancipation Patents registered under the names of the herein
tenants-respondents; and
3. That back rentals due to the petitioners, which were given to the
LBP as amortizations, shall be given to the said petitioner.[4]
On appeal, the DARAB reversed the adjudicator.
Ruling of the Court of Appeals
The CA rejected the claim of petitioner. It ruled that she could not retain
her homesteads, since she was not the actual cultivator thereof. It also
held that she and her heirs had not been deprived of their right to
retain the area mandated by law, because the records showed that
they had other agricultural landholdings. Finally, it ruled that she had
not been deprived of her properties without just compensation, since
Section 2 of Executive Order 228 declared that tenant-farmers of
agricultural lands under P.D. 27 are deemed owners of the land they till
and the lease rentals paid by them shall be considered as amortization
payments.[5]
Hence, this Petition.[6]
The Issues
In her Memorandum, petitioner submits the following issues for our
consideration:
I. Whether or not the original homesteads issued under the public land
act [are] exempted from the operation of land reform.

II. Granting arguendo that homesteads are not exempt, whether or not
the Emancipation Patents issued to the respondents are valid
notwithstanding lack of payment of just compensation.
III. On the assumption that homesteads are exempt from land reform
and/or the emancipation patents are illegally issued hence, void, can
the respondents be ejected from the premises in question?[7]
The Courts Ruling
The Petition is partly meritorious. Respondents are entitled to the lands
they till, subject to the determination and payment of just compensation
to petitioner.
First Issue: Petitioners Homesteads Not Exempt from Land Reform
Petitioner contends that because the subject properties are covered by
homestead patents, they are exempt from the operation of land reform.
In support of her position, she cites the cases Alita v. CA[8] and
Patricio v. Bayug,[9] in which the Court ruled that homesteaders had a
superior right to cultivate their homesteads as against their tenants.
Petitioners contention is without legal basis. Presidential Decree (PD)
No. 27, under which the Emancipation Patents sought to be cancelled
here were issued to respondents, applies to all tenanted private
agricultural lands primarily devoted to rice and corn under a system of
share-crop or lease-tenancy, whether classified as landed estate or
not.[10] The law makes no exceptions whatsoever in its coverage.
Nowhere therein does it appear that lots obtained by homestead
patents are exempt from its operation.
The matter is made even clearer by Department Memorandum Circular
No. 2, Series of 1978, which states: Tenanted private agricultural lands
primarily devoted to rice and/or corn which have been acquired under
the provisions of Commonwealth Act 141, as amended, shall also be
covered by Operation Land Transfer. Unquestionably, petitioners
parcels of land, though obtained by homestead patents under
Commonwealth Act 141, are covered by land reform under PD 27.

Petitioners claimed entitlement to retain seven (7) hectares is also

untenable. PD 27, which provides the retention limit, states:
In all cases, the landowner may retain an area of not more than seven
(7) hectares if such landowner is cultivating such area or will now
cultivate it.
Clearly, the right to retain an area of seven hectares is not absolute. It
is premised on the condition that the landowner is cultivating the area
sought to be retained or will actually cultivate it upon effectivity of the
law.
In the case at bar, neither of the conditions for retention is present. As
admitted by petitioner herself, the subject parcels are fully tenanted;
thus, she is clearly not cultivating them, nor will she personally cultivate
any part thereof. Undoubtedly, therefore, she has no right to retain any
portion of her landholdings.
Even under the current primary law on agrarian reform, Republic Act
(RA) No. 6657, to which the application of PD 27 is suppletory,
petitioners lands are subject to land reform. The said Act lays down the
rights of homestead grantees as follows:
SEC. 6. Retention Limits. Except as otherwise provided in this Act, no
person may own or retain, directly or indirectly, any public or private
agricultural land, the size of which shall vary according to factors
governing a viable family-sized farm, such as commodity produced,
terrain, infrastructure, and soil fertility as determined by the
Presidential Agrarian Reform Council (PARC) created hereunder, but in
no case shall retention by the landowner exceed five (5) hectares.
Three (3) hectares may be awarded to each child of the landowner,
subject to the following qualifications: (1) that he is at least fifteen (15)
years of age; and (2) that he is actually tilling the land or directly
managing the farm; Provided, That landowners whose lands have
been covered by PD 27 shall be allowed to keep the area originally
retained by them thereunder; 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.
(italics supplied)

Indisputably, homestead grantees or their direct compulsory heirs can

own and retain the original homesteads, only for as long as they
continue to cultivate them. That parcels of land are covered by
homestead patents will not automatically exempt them from the
operation of land reform. It is the fact of continued cultivation by the
original grantees or their direct compulsory heirs that shall exempt their
lands from land reform coverage.

finds support in the aforecited Section 6 of RA 6657.[14] A closer look

at these cases shows that they are not applicable to the issues in the
present case.

In the present case, as previously pointed out, neither petitioner nor

her heirs are personally cultivating the subject homesteads. The DAR
and the CA found that respondents were the ones who had been
cultivating their respective portions of the disputed properties.

In Patricio, the owner and his heirs had previously cultivated the
homestead, which was later sold but subsequently reconveyed to the
former. After the reconveyance, the owners heirs wanted to resume
their cultivation of the homestead, but the previous buyers tenants did
not want to leave it. In Alita, the owner was also desirous of personally
cultivating the homestead; but the tenants, not wanting to relinquish it,
were asserting their own right to continue cultivating it. Thus, under
these circumstances, the Court upheld the right of the homestead
owners over that of the tenants.

However, petitioner can retain five (5) hectares in accordance with

Section 6 of RA 6657, which requires no qualifying condition for the
landowner to be entitled to retain such area. This ruling is in line with
Association of Small Landowners in the Philippines, Inc. v. Secretary of
Agrarian Reform, from which we quote:

In the case at bar, petitioner herself has not personally cultivated the
parcels of land. Neither has she or her heirs expressed, at any time,
any desire to cultivate them personally. She is invoking, yet is clearly
not intending to ever actually exercise, her alleged right as
homesteader to own and personally cultivate them.

x x x. In any event, assuming that the petitioners have not yet

exercised their retention rights, if any, under PD No. 27, the Court
holds that they are entitled to the new retention rights provided for by
RA No. 6657, which in fact are on the whole more liberal than those
granted by the decree.

Thus, the rulings in both Patricio and Alita, which are in line with the
state objective of fostering owner cultivatorship[15] and of abolishing
tenancy,[16] would be inapplicable to the present case. Since petitioner
and her heirs have evinced no intention of actually cultivating the lands
or even directly managing the farm, they will undoubtedly continue to
be absentee landlords. Therefore, to blindly and indiscriminately apply
the ruling in the cited cases would be tantamount to encouraging
feudalistic practices and going against the very essence of agrarian
reform. This we cannot sanction.

Petitioners heirs, however, are not entitled to awards of three (3)

hectares each, since they are not actually tilling the parcels or directly
managing the farm.
Patricio v. Bayug and Alita v. CA
Not Applicable
Petitioner insists that the appellate court ignored the ruling of the Court
in Patricio v. Bayug[11] and Alita v. CA.[12] She relies on the following
pronouncement in Patricio: We hold that the more paramount and
superior policy consideration is to uphold the right of the homesteader
and his heirs to own and cultivate personally the land acquired from
the State without being encumbered by tenancy relations.[13] She also
cites the statement in Alita that the inapplicability of P.D. 27 to lands
covered by homestead patents like those of the property in question

Second Issue: Just Compensation

It is undisputed that the subject parcels were covered by Operation
Land Transfer under PD 27, and that private respondents were
identified as beneficiaries. In fact, Emancipation Patents have already
been issued to them.
Petitioner, however, claims that she was not paid just compensation
and, thus, prays for the cancellation of the Emancipation Patents
issued to respondents under PD 27. She contends that it is illegal for

the DAR to take property without full payment of just compensation[;]

until full payment is done the title and ownership remain with the
landholder.[17]

they themselves admitted,[19] their value had not even been

determined yet. In the absence of such determination, the Court
cannot rule that just compensation has already been fully paid.

Petitioners contention has merit. Section 2 of PD 266 states:

Presidential Decree 27 and subsequently Executive Order (EO) 228,

which recognized the rights acquired by tenant-farmers under PD 27,
provide in detail the computation to be used in arriving at the exact
total cost of the parcels of land. Evidently, therefore, the law
recognizes that their exact value, or the just compensation to be given
to the landowner, cannot just be assumed; it must be determined with
certainty before the land titles are transferred.

After the tenant-farmer shall have fully complied with the requirements
for a grant of title under Presidential Decree No. 27, an Emancipation
Patent and/or Grant shall be issued by the Department of Agrarian
Reform on the basis of a duly approved survey plan.
On the other hand, paragraphs 8 and 9 of PD 27 reads as follows:
For the purpose of determining the cost of the land to be transferred to
the tenant-farmer pursuant to this Decree, the value of the land shall
be equivalent to two and one-half (2 ) times the average harvest of
three normal crop years immediately preceding the promulgation of
this Decree;
The total cost of the land, including interest at the rate of six (6) per
centum per annum, shall be paid by the tenant in fifteen (15) years of
fifteen (15) equal annual amortizations[.]
Although, under the law, tenant farmers are already deemed owners of
the land they till, they are still required to pay the cost of the land,
including interest, within fifteen years before the title is transferred to
them. Thus, the Court held in Association of Small Landowners in the
Philippines v. Secretary of Agrarian Reform:[18]
It is true that PD 27 expressly ordered the emancipation of tenantfarmers as of October 21, 1972 and declared that he shall be deemed
the owner of a portion of land consisting of a family-sized farm except
that no title to the land owned by him was to be actually issued to him
unless and until he had become a full-fledged member of a duly
recognized farmers cooperative. It was understood, however, that full
payment of the just compensation also had to be made first,
conformably to the constitutional requirement.
In the case at bar, there is no showing that respondents complied with
the requirement of full payment of the cost of the parcels of land. As

Although EO 228 provides that the total lease rentals paid for the lands
from October 21, 1972 shall be considered as advance payment, it
does not sanction the assumption that such rentals are automatically
considered as equivalent to just compensation for the land. The
provision significantly designates the lease rentals as advance, not full,
payment. The determination of the exact value of the lands cannot
simply be brushed aside, as it is fundamental to the determination of
whether full payment has been made.
Necessarily, the lease rentals admittedly paid by respondents until
December 1988 cannot, at this point, be considered as full settlement
of the value of the lands or as just compensation for them. The value of
the subject lands was never determined; thus, there is no amount that
can be used as basis for applying the lease rentals.
Under the circumstances, actual title to the subject lands remains with
petitioner. Clearly then, under PD 27 and EO 228, the application of
the process of agrarian reform to the subject lands is still incomplete.
Considering the passage of RA 6657 before the completion of the
application of the agrarian reform process to the subject lands, the
same should now be completed under the said law, with PD 27 and EO
228 having only suppletory effect. This ruling finds support in Land
Bank of the Philippines v. CA,[20] wherein the Court stated:
We cannot see why Sec. 18 of RA 6657 should not apply to rice and
corn lands under PD 27. Section 75 of RA 6657 clearly states that the

provisions of PD 27 and EO 228 shall only have a suppletory effect.

Section 7 of the Act also provides --Sec. 7. Priorities. The DAR, in coordination with the PARC shall plan
and program the acquisition and distribution of all agricultural lands
through a period of (10) years from the effectivity of this Act. Lands
shall be acquired and distributed as follows:
Phase One: Rice and Corn lands under P.D. 27; all idle or abandoned
lands; all private lands voluntarily offered by the owners for agrarian
reform; x x x and all other lands owned by the government devoted to
or suitable for agriculture, which shall be acquired and distributed
immediately upon the effectivity of this Act, with the implementation to
be completed within a period of not more than four (4) years emphasis
supplied).
This eloquently demonstrates that RA 6657 includes PD 27 lands
among the properties which the DAR shall acquire and distribute to the
landless. And to facilitate the acquisition and distribution thereof, Secs.
16, 17 and 18 of the Act should be adhered to. In Association of Small
Landowners of the Philippines v. Secretary of Agrarian Reform this
Court applied the provisions (of) RA 6657 to rice and corn lands when
it upheld the constitutionality of the payment of just compensation for
PD 27 lands through the different modes stated in Sec. 18.
In determining the amount to be paid petitioner, all lease rentals paid
by respondents to her after October 21, 1972 should be deducted
therefrom. This formula is intended to put into effect the provision of
Section 2 of EO 228.
Third Issue: Tenants Cannot Be Ejected
Petitioner submits that aside from cancelling the Emancipation Patents
issued to respondents, the ejectment of the latter from the premises
should be ordered by the Court, in accordance with the doctrine in
Patricio.
Petitioners position is unfounded. As earlier explained, Patricio finds no
application to the case at bar. Thus, there is no justification for ejecting
respondents. Besides, Section 22 of RA 6657 expressly states that

actual tenant-tillers in the landholding shall not be ejected or removed

therefrom. Furthermore, there is no reason for ejecting the tillers with
respect to the area of five hectares, which petitioner may choose to
retain. Section 6 of RA 6657 further states:
The right to choose the area to be retained, which shall be compact or
contiguous, shall pertain to the landowner; Provided, however, That in
case the area selected for retention by the land owner is tenanted, the
tenant shall have the option to choose whether to remain therein or be
a beneficiary in the same or another agricultural land with similar or
comparable features. In case the tenant chooses to remain in the
retained area, he shall be considered a lease holder and shall lose his
right to be a beneficiary under this Act. In case the tenant chooses to
be a beneficiary in another agricultural land, he loses his right as a
lease-holder to the land retained by the landowner. The tenant must
exercise this option within a period of one (1) year from the time the
landowner manifests his choice of the area for retention.
In all cases, the security of tenure of the farmers or farm workers on
the land prior to the approval of this Act shall be respected.
The current provision on retention removes the necessity, present
under PD 27, of ejecting actual tillers. Under the current law,
landowners who do not personally cultivate their lands are no longer
required to do so in order to qualify for the retention of an area not
exceeding five hectares. Instead, they are now required to maintain the
actual tiller of the area retained, should the latter choose to remain
therein.
WHEREFORE, the Petition is partially GRANTED. The assailed
Decision of the Court of Appeals is hereby SET ASIDE. The Decision
of the provincial agrarian reform adjudicator is REINSTATED with the
modification that the lease rentals, which respondents have already
paid to petitioner after October 21, 1972, are to be considered part of
the purchase price for the subject parcels of land.
SO ORDERED.
Melo, (Chairman), Vitug, Gonzaga-Reyes, and Sandoval-Gutierrez,
JJ., concur.