ASSOCIATION OF SMALL LANDOWNERS IN THE PHIL. VS SEC.

OF DAR
175 SCRA 343 Political Law Constitutional Law Bill of Rights Equal Protection Valid
Classification
Eminent Domain Just Compensation

These are four consolidated cases questioning the constitutionality of the

Comprehensive Agrarian Reform Act (R.A. No. 6657 and related laws i.e., Agrarian
Land Reform Code or R.A. No. 3844).
Brief background: Article XIII of the Constitution on Social Justice and Human Rights
includes a call for the adoption by the State of an agrarian reform program. The
State shall, by law, undertake an agrarian reform program founded on the right of
farmers and regular farm workers, who are landless, to own directly or collectively
the lands they till or, in the case of other farm workers, to receive a just share of the
fruits thereof. RA 3844 was enacted in 1963. P.D. No. 27 was promulgated in 1972 to
provide for the compulsory acquisition of private lands for distribution among
tenant-farmers and to specify maximum retention limits for landowners. In 1987,
President Corazon Aquino issued E.O. No. 228, declaring full land ownership in favor
of the beneficiaries of PD 27 and providing for the valuation of still unvalued lands
covered by the decree as well as the manner of their payment. In 1987, P.P. No. 131,
instituting a comprehensive agrarian reform program (CARP) was enacted; later,
E.O. No. 229, providing the mechanics for its (PP131s) implementation, was also
enacted. After which is the enactment of R.A. No. 6657, Comprehensive Agrarian
Reform Law in 1988. This law, while considerably changing the earlier mentioned
enactments, nevertheless gives them suppletory effect insofar as they are not
inconsistent with its provisions.
[Two of the consolidated cases are discussed below]
G.R. No. 78742: (Association of Small Landowners vs Secretary)
The Association of Small Landowners in the Philippines, Inc. sought exception from
the land distribution scheme provided for in R.A. 6657. The Association is comprised
of landowners of ricelands and cornlands whose landholdings do not exceed 7
hectares. They invoke that since their landholdings are less than 7 hectares, they
should not be forced to distribute their land to their tenants under R.A. 6657 for
they themselves have shown willingness to till their own land. In short, they want to
be exempted from agrarian reform program because they claim to belong to a
different class.
G.R. No. 79777: (Manaay vs Juico)
Nicolas Manaay questioned the validity of the agrarian reform laws (PD 27, EO 228,
and 229) on the ground that these laws already valuated their lands for the agrarian
reform program and that the specific amount must be determined by the
Department of Agrarian Reform (DAR). Manaay averred that this violated the
principle in eminent domain which provides that only courts can determine just
compensation. This, for Manaay, also violated due process for under the
constitution, no property shall be taken for public use without just compensation.

Manaay also questioned the provision which states that landowners may be paid for
their land in bonds and not necessarily in cash. Manaay averred that just
compensation has always been in the form of money and not in bonds.
ISSUE:
1. Whether or not there was a violation of the equal protection clause.
2. Whether or not there is a violation of due process.
3. Whether or not just compensation, under the agrarian reform program, must be
in terms of cash.
HELD:
1. No. The Association had not shown any proof that they belong to a different class
exempt from the agrarian reform program. Under the law, classification has been
defined as the grouping of persons or things similar to each other in certain
particulars and different from each other in these same particulars. To be valid, it
must conform to the following requirements:
(1) it must be based on substantial distinctions;
(2) it must be germane to the purposes of the law;
(3) it must not be limited to existing conditions only; and
(4) it must apply equally to all the members of the class.
Equal protection simply means that all persons or things similarly situated must be
treated alike both as to the rights conferred and the liabilities imposed. The
Association have not shown that they belong to a different class and entitled to a
different treatment. The argument that not only landowners but also owners of
other properties must be made to share the burden of implementing land reform
must be rejected. There is a substantial distinction between these two classes of
owners that is clearly visible except to those who will not see. There is no need to
elaborate on this matter. In any event, the Congress is allowed a wide leeway in
providing for a valid classification. Its decision is accorded recognition and respect
by the courts of justice except only where its discretion is abused to the detriment
of the Bill of Rights. In the contrary, it appears that Congress is right in classifying
small landowners as part of the agrarian reform program.
2. No. It is true that the determination of just compensation is a power lodged in the
courts. However, there is no law which prohibits administrative bodies like the DAR
from determining just compensation. In fact, just compensation can be that amount
agreed upon by the landowner and the government even without judicial
intervention so long as both parties agree. The DAR can determine just
compensation through appraisers and if the landowner agrees, then judicial
intervention is not needed. What is contemplated by law however is that, the just
compensation determined by an administrative body is merely preliminary. If the
landowner does not agree with the finding of just compensation by an
administrative body, then it can go to court and the determination of the latter shall
be the final determination. This is even so provided by RA 6657:
Section 16 (f): Any party who disagrees with the decision may bring the matter to
the court of proper jurisdiction for final determination of just compensation.
3. No. Money as [sole] payment for just compensation is merely a concept
in traditional exercise of eminent domain. The agrarian reform program is a
revolutionary exercise of eminent domain. The program will require billions of pesos
in funds if all compensation has to be made in cash if everything is in cash, then

the government will not have sufficient money hence, bonds, and other securities,
i.e., shares of stocks, may be used for just compensation.