Professional Documents
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SUPREMECOURTREPORTSANNOTATEDVOLUME175
VOL.175,JULY14,1989
343
AssociationofSmallLandownersinthePhilippines,Inc.vs.
SecretaryofAgrarianReform
G.R.No.78742.July14,1989.
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*ENBANC.
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that enacted it. By the same token, President Aquinos loss of legislative
powerdidnothavetheeffectofinvalidatingallthemeasuresenactedbyher
whenandaslongasshepossessedit.
SameSameSameAppropriation Law, defined Proc. No. 131 is not
an appropriation measure Reasons.That fund, as earlier noted, is itself
beingquestionedonthegroundthatitdoesnotconformtotherequirements
of a valid appropriation as specified in the Constitution. Clearly, however,
Proc.No.131isnotanappropriationmeasureevenifitdoesprovideforthe
creationofsaidfund,forthatisnotitsprincipalpurpose.Anappropriation
law is one the primary and specific purpose of which is to authorize the
release of public funds from the treasury. The creation of the fund is only
incidental to the main objective of the proclamation, which is agrarian
reform.
Same Same Same Section 6 of Comprehensive Agrarian Reform
Program of 1988 (R.A. No. 6657) provides for retention limits.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
requiredbyArticleXIII,Section4,oftheConstitutionisnolongertenable.
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
agriculturalland,thesizeofwhichshallvaryaccordingtofactorsgoverning
a viable familysized farm, such as commodity produced, terrain,
infrastructure, and soil fertility as determined by the Presidential Agrarian
ReformCouncil(PARC)createdhereunder,butinnocaseshallretentionby
thelandownerexceedfive(5)hectares.Three(3)hectaresmaybeawardedto
eachchildofthelandowner,subjecttothefollowingqualifications:(1)that
he is at least fifteen (15) years of age and (2) that he is actually tilling the
landordirectlymanagingthefarmProvided,Thatlandownerswhoselands
havebeencoveredbyPresidentialDecreeNo.27shallbeallowedtokeepthe
areaoriginallyretainedbythemthereunder,further,Thatoriginalhomestead
granteesordirectcompulsoryheirswhostillowntheoriginalhomesteadat
the time of the approval of this Act shall retain the same areas as long as
theycontinuetocultivatesaidhomestead.
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AssociationofSmallLandownersinthePhilippines,Inc.vs.Secretaryof
AgrarianReform
SameSameSameRulethatthetitleofthebilldoesnothavetobea
catalogue of its contents.The argument that E.O. No. 229 violates the
constitutional requirement that a bill shall have only one subject, to be
expressedinitstitle,deservesonlyshortattention.Itissettledthatthetitle
ofthebilldoesnothavetobeacatalogueofitscontentsandwillsufficeif
the matters embodied in the text are relevant to each other and may be
inferredfromthetitle.
Same Same Same Mandamus Rule that mandamus can issue to
require action only but not specific action.Finally, there is the contention
of the public respondent in G.R. No. 78742 that the writ of mandamus
cannotissuetocompeltheperformanceofadiscretionaryact,especiallybya
specificdepartmentofthegovernment.Thatistrueasageneralproposition
but is subject to one important qualification. Correctly and categorically
stated, the rule is that mandamus will lie to compel the dischrage 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
unnecessaryandunreasonabledelayintheexerciseofsuchdutyoccurs,ifit
isacleardutyimposedbylaw,thecourtswillintervenebytheextraordinary
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,thecourtsbymandamuswillrequireactiononly.Forexample,
if an inferior court, public official, or board should, for an unreasonable
lengthoftime,failtodecideaparticularquestiontothegreatdetrimentofall
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
takenofthecause.
Same Same Same Eminent Domain Police Power Property
condemned under Police Power is noxious or intended for a noxious
purposeisnotcompensable.There are traditional distinctions between the
police power and the power of eminent domain that logically preclude the
applicationofbothpowersatthesametimeonthesamesubject.Inthecase
of City of Baguio v. NAWASA, 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
exercisedwaseminentdomainbecausethepropertyinvolvedwaswholesome
andintendedforapublicuse.
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AssociationofSmallLandownersinthePhilippines,Inc.vs.Secretaryof
AgrarianReform
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AgrarianReform
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ent 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
burdenofimplementinglandreformmustberejected.Thereisasubstantial
distinctionbetweenthesetwoclassesofownersthatisclearlyvisibleexcept
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.Itsdecisionisaccordedrecognitionandrespect by the courts
of justice except only where its discretion is abused to the detriment of the
BillofRights.
SameSameSameSameStatutesA statute may be sustained under
the police power only if there is a concurrence of the lawful subject and
method.It is worth remarking at this juncture that a statute may be
sustainedunderthepolicepoweronlyifthereisaconcurrenceofthelawful
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
reasonablynecessaryfortheattainmentofthepurposesoughttobeachieved
and not unduly oppressive upon individuals. As the subject and purpose of
agrarianreformhavebeenlaiddownbytheConstitutionitself,wemaysay
thatthefirstrequirementhasbeensatisfied.Whatremainstobeexaminedis
thevalidityofthemethodemployedtoachievetheConstitutionalgoal.
SameSameSameSameEminentDomain,defined.Eminentdomain
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,thereisnoneedtoexpropriatewheretheowneriswilling
to sell under terms also acceptable to the purchaser, in which case an
ordinarydeedofsalemaybeagreeduponbytheparties.Itisonlywherethe
owner is unwilling to sell, or cannot accept the price or other conditions
offeredbythevendee,thatthepowerofeminentdomainwillcomeintoplay
to assert the paramount authority of the State over the interests of the
propertyowner.Privaterightsmustthenyieldtotheirresistibledemandsof
the public interest on the timehonored justification, as in the case of the
policepower,thatthewelfareofthepeopleisthesupremelaw.
SameSameSameSameRequirementsforaproperexerciseofpower
ofeminentdomain.Butforallitsprimacyandurgency,the
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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
exerciseofthepowerare:(1)publicuseand(2)justcompensation.
SameSameSameSameConceptofpoliticalquestion.Abecoming
courtesyadmonishesustorespectthedecisionsofthepoliticaldepartments
when they decide what is known as the political question. As explained by
Chief Justice Concepcion in the case of Taada v. Cuenco: 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
issuesdependentuponthewisdom,notlegality,ofaparticularmeasure.
Same Same Same Same Just Compensation, defined.Just
compensationisdefinedasthefullandfairequivalentofthepropertytaken
from its owner by the expropriator. It has been repeatedly stressed by this
Courtthatthemeasureisnotthetakersgainbuttheownersloss.Theword
justisusedtointensifythemeaningofthewordcompensationtoconvey
theideathattheequivalenttoberenderedforthepropertytobetakenshall
bereal,substantial,full,ample.
Same Same Same Same Requirements of compensable taking.As
heldinRepublicofthePhilippinesv.Castellvi,thereiscompensabletaking
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
propertymustbedevotedtopublicuseorotherwiseinformallyappropriated
orinjuriouslyaffectedand(5)theutilizationofthepropertyforpublicuse
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
measuresbeforeus.
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assessmentofthepropertybythegovernmentortheswornvaluationthereof
bytheowner,whicheverwaslower.
Same Same Same Same The Court declares that the content and
manner of the just compensation provided for in the CARP Law is not
violative of the Constitution.With these assumptions, the Court hereby
declaresthatthecontentandmannerofthejustcompensationprovidedforin
the aforequoted Section 18 of the CARP Law is not violative of the
Constitution.Wedonotmindadmittingthatacertaindegreeofpragmatism
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
oblivioustotheneedforitsenhancement.TheCourtisasacutelyanxiousas
therestofourpeopletoseethegoalofagrarianreformachievedatlastafter
the frustrations and deprivations of our peasant masses during all these
disappointingdecades.Weareawarethatinvalidationofthesaidsectionwill
result in the nullification of the entire program, killing the farmers hopes
even as they approach realization and resurrecting the spectre of discontent
anddissentintherestlesscountryside.Thatisnotinourviewtheintention
oftheConstitution,andthatisnotwhatweshalldecreetoday.
Same Same Same Same Theory that payment of the just
compensationisnotalwaysrequiredtobemadefullyinmoneyOthermodes
ofpayment.Acceptingthetheorythatpaymentofthejustcompensationis
not always required to be made fully in money, we find further that the
proportionofcashpaymenttotheotherthingsofvalueconstitutingthetotal
payment,asdeterminedonthebasisoftheareasofthelandsexpropriated,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
landwonerwillbeneedingitmorethanthebiglandowners,whocanafforda
biggerbalanceinbondsandotherthingsofvalue.Nolessimportantly,the
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AssociationofSmallLandownersinthePhilippines,Inc.vs.Secretaryof
AgrarianReform
governmentfinancialinstrumentsmakingupthebalanceofthepaymentare
negotiable at any time. The other modes, which are likewise available to
the landowner at his option, are also not unreasonable because payment is
madeinsharesofstock,LBPbonds,otherpropertiesorassets,taxcredits,
andotherthingsofvalueequivalenttotheamountofjustcompensation.
Same Same Same Same CARP Law repeats the requisites of
registrationbutdoesnotprovidethatincaseoffailureorrefusaltoregister
the land, the valuation thereof shall be that given by the provincial or city
assessor for tax purposes.The complaint against the effects of non
registration of the land under E.O. No. 229 does not seem to be viable any
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moreasitappearsthatSetion4oftheOrderhasbeensupersededbySection
14oftheCARPLaw.Thisrepeatstherequisitesofregistrationasembodied
intheearliermeasurebutdoesnotprovide,asthelatterdid,thatincaseof
failureorrefusaltoregistertheland,thevaluationthereofshallbethatgiven
by the provincial or city assessor for tax purposes. On the contrary, the
CARPLawsaysthatthejustcompensationshallbeascertainedonthebasis
ofthefactorsmentionedinitsSection17andinthemannerprovidedforin
Section16.
Same Same Same Same Recognized rule that title to the property
expropriated shall pass from the owner to the expropriator only upon full
paymentofthejustcompensation.Therecognizedrule,indeed,isthattitle
to the property expropriated shall pass from the owner to the expropriator
only upon full payment of the just compensation. Jurisprudence on this
settledprincipleisconsistentbothhereandinotherdemocraticjurisdictions.
SameSameSameSameCARPLaw(R.A.6657)ismoreliberalthan
those granted by P.D. No. 27 as to retention limits Case at bar.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
alreadybeenresolved.Althoughwehavesaidthatthedoctrineofexhaustion
of administrative remedies need not preclude immediate resort to judicial
action, there are factual issues that have yet to be examined on the
administrativelevel,especiallytheclaimthatthepetitionersarenotcovered
by LOI 474 because they do not own other agricultural lands than the
subjects of their petition. Obviously, the Court cannot resolve these issues.
Inanyevent,assum
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AssociationofSmallLandownersinthePhilippines,Inc.vs.Secretaryof
AgrarianReform
ing that the petitioners have not yet exercised their retention rights, if any,
underP.D.No.27,theCourtholdsthattheyareentitledtothenewretention
rightsprovidedforbyR.A.No.6657,whichinfactareonthewholemore
liberalthanthosegrantedbythedecree.
PETITIONStoreviewthedecisionsoftheSecretaryofAgrarian
Reform.
ThefactsarestatedintheopinionoftheCourt.
CRUZ,J.:
Inancientmythology,Antaeuswasaterriblegiantwhoblockedand
challenged Hercules for his life on his way to Mycenae after
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AssociationofSmallLandownersinthePhilippines,Inc.vs.
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1
nomicsecurityofallthepeople, especiallythelessprivileged. In
1973, the new Constitution affirmed this goal, adding specifically
that the State shall regulate the acquisition, ownership, use,
enjoymentanddispositionofprivatepropertyandequitablydiffuse
2
property ownership and profits. Significantly, there was also the
specificinjunctiontoformulateandimplementanagrarianreform
programaimedatemancipatingthetenantfromthebondageofthe
3
soil.
TheConstitutionof1987wasnottobeoutdone.Besidesechoing
thesesentiments,italsoadoptedonewholeandseparateArticleXIII
on Social Justice and Human Rights, containing grandiose but
undoubtedlysincereprovisionsfortheupliftofthecommonpeople.
Theseincludeacallinthefollowingwordsfortheadoptionbythe
Stateofanagrarianreformprogram:
SEC. 4. The State shall, by law, undertake an agrarian reform program
foundedontherightoffarmersandregularfarmworkers,whoarelandless,
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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,infact,R.A.No.3844,otherwiseknownastheAgricultural
LandReformCode,hadalreadybeenenactedbytheCongressofthe
Philippines on August 8, 1963, in line with the abovestated
principles. This was substantially superseded almost a decade later
byP.D.No.27,whichwaspromulgatedonOctober21,1972,along
with martial law, to provide for the compulsory acquisition of
privatelandsfordistributionamong
_______________
1Art.II,Sec.5.
21973Constitution,Art.II,Sec.6.
3Ibid.,Art.XIV,Sec.12.
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AssociationofSmallLandownersinthePhilippines,Inc.vs.
SecretaryofAgrarianReform
Thesubjectsofthispetitionarea9hectarericelandworkedbyfour
tenantsandownedbypetitionerNicolasManaayandhiswifeanda
5hectare riceland worked by four tenants and owned by petitioner
Augustin Hermano, Jr. The tenants were declared full owners of
theselandsbyE.O.No.228asqualifiedfarmersunderP.D.No.27.
The petitioners are questioning P.D. No. 27 and E.O. Nos. 228
and229ongroundsinteraliaofseparationofpowers,dueprocess,
equal protection and the constitutional limitation that no private
propertyshallbetakenforpublicusewithoutjustcompensation.
They contend that President Aquino usurped legislative power
when she promulgated E.O. No. 228. The said measure is invalid
alsoforviolationofArticleXIII,Section4,oftheConstitution,for
failure to provide for retention limits for small landowners.
Moreover,itdoesnotconformtoArticleVI,Section25(4)andthe
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
PresidentofthePhilippines.TheyinvoketherecentcasesofEPZA
5
6
v.Dulay and Manotok v. National Food Authority. Moreover, the
just compensationcontemplated by the Bill of Rights is payable in
money or in cash and not in the form of bonds or other things of
value.
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theamountappropriatedisinfuturo,notinesse.Themoneyneeded
to cover the cost of the contemplated expropriation has yet to be
raisedandcannotbeappropriatedatthistime.
Furthermore,theycontendthattakingmustbesimultaneouswith
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 owners declaration of current fair
marketvalueasprovidedinSection4hereof,butsubjecttocertain
controlstobedefinedandpromulgatedbythePresidentialAgrarian
Reform Council. This compensation may not be paid fully in
moneybutinanyofseveralmodesthatmayconsistofpartcashand
partbond,withinterest,maturingperiodically,ordirectpaymentin
cashorbondasmaybemutuallyagreeduponbythebeneficiaryand
thelandownerorasmaybeprescribedorapprovedbythePARC.
The petitioners also argue that in the issuance of the two
measures,noeffortwasmadetomakeacarefulstudyofthesugar
planters situation. There is no tenancy problem in the sugar areas
thatcanjustifytheapplicationoftheCARPtothem.Totheextent
thatthesugarplantershavebeenlumpedinthesamelegislationwith
other farmers, although they are a separate group with problems
exclusively their own, their right to equal protection has been
violated.
A motion for intervention was filed on August 27, 1987 by the
National Federation of Sugarcane Planters (NASP) which claims a
membershipofatleast20,000individualsugarplantersalloverthe
country. On September 10, 1987, another motion for intervention
was filed, this time by Manuel Barcelona, et al., representing
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AssociationofSmallLandownersinthePhilippines,Inc.vs.
SecretaryofAgrarianReform
G.R.No.79744
The petitioner alleges that the then Secretary of Department of
Agrarian Reform, in violation of due process and the requirement
forjustcompensation,placedhislandholdingunderthecoverageof
Operation Land Transfer. Certificates of Land Transfer were
subsequently issued to the private respondents, who then refused
paymentofleaserentalstohim.
On September 3, 1986, the petitioner protested the erroneous
inclusion of his small landholding under Operation Land Transfer
andaskedfortherecallandcancellationoftheCertificatesofLand
Transfer in the name of the private respondents. He claims that on
December 24, 1986, his petition was denied without hearing. On
February17,1987,hefiledamotionforreconsideration,whichhad
not been acted upon when E.O. Nos. 228 and 229 were issued.
Theseordersrenderedhismotionmootandacademicbecausethey
directlyeffectedthetransferofhislandtotheprivaterespondents.
Thepetitionernowarguesthat:
(1) E.O.Nos.228and229wereinvalidlyissuedbythePresi
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AssociationofSmallLandownersinthePhilippines,Inc.vs.
SecretaryofAgrarianReform
dentofthePhilippines.
(2) Thesaidexecutiveordersareviolativeoftheconstitutional
provision that no private property shall be taken without
dueprocessorjustcompensation.
(3) The petitioner is denied the right of maximum retention
providedforunderthe1987Constitution.
ThepetitionercontendsthattheissuanceofE.ONos.228and229
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
promulgatedintheproperexerciseofthepolicepower.
The petitioner also invokes his rights not to be deprived of his
propertywithoutdueprocessoflawandtotheretentionofhissmall
parcelsofriceholdingasguaranteedunderArticleXIII,Section4of
the Constitution. He likewise argues that, besides denying him just
compensationforhisland,theprovisionsofE.O.No.228declaring
that:
Lease rentals paid to the landowner by the farmerbeneficiary after October
21,1972shallbeconsideredasadvancepaymentfortheland.
isanunconstitutionaltakingofavestedpropertyright.Itisalsohis
contention that the inclusion of even small landowners in the
programalongwithotherlandownerswithlandsconsistingofseven
hectaresormoreisundemocratic.
InhisComment,theSolicitorGeneralsubmitsthatthepetitionis
premature because the motion for reconsideration filed with the
MinisterofAgrarianReformisstillunresolved.Asforthevalidity
oftheissuanceofE.O.Nos.228and229,hearguesthattheywere
enacted pursuant to Section 6, Article XVIII of the Transitory
Provisionsofthe1987Constitutionwhichreads:
The incumbent president shall continue to exercise legislative powers until
thefirstCongressisconvened.
Ontheissueofjustcompensation,hispositionisthatwhenP.D.No.
27waspromulgatedonOctober21,1972,thetenant
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farmerofagriculturallandwasdeemedtheownerofthelandhewas
tilling.Theleaseholdrentalspaidafterthatdateshouldthereforebe
consideredamortizationpayments.
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
promulgationofE.O.Nos.228and229,whichineffectsanctioned
thevalidityofthepublicrespondentsacts.
G.R.No.78742
Thepetitionersinthiscaseinvoketherightofretentiongrantedby
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.Theirrespectivelandsdonotexceedthestatutorylimitbutare
occupiedbytenantswhoareactuallycultivatingsuchlands.
According to P.D. No. 316, which was promulgated in
implementationofP.D.No.27:
No tenantfarmer 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 tenantfarmers 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 abovequoted decree. They therefore ask the
Courtforawritofmandamustocompeltherespondenttoissuethe
saidrules.
In his Comment, the public respondent argues that P.D. No. 27
hasbeenamendedbyLOI474removinganyrightofretentionfrom
personswhoownotheragriculturallandsofmorethan7hectaresin
aggregate area or lands used for residential, commercial, industrial
orotherpurposesfromwhichtheyderiveadequateincomefortheir
family.Andevenassumingthat
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15SCRA479Sanidadv.COMELEC,73SCRA333.
366
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AssociationofSmallLandownersinthePhilippines,Inc.vs.
SecretaryofAgrarianReform
Thecasesbeforeuscategoricallyraiseconstitutionalquestionsthat
thisCourtmustcategoricallyresolve.Andsoweshall.
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II
Weproceedfirsttotheexaminationofthepreliminaryissuesbefore
resolvingthemoreseriouschallengestotheconstitutionalityofthe
severalmeasuresinvolvedinthesepetitions.
The promulgation of P.D. No. 27 by President Marcos in the
exerciseofhispowersundermartiallawhasalreadybeensustained
inGonzalesv.Estrellaandwefindnoreasontomodifyorreverseit
on that issue. As for the power of President Aquino to promulgate
Proc.No.131andE.O.Nos.228and229,thesamewasauthorized
under Section 6 of the Transitory Provisions of the 1987
Constitution,quotedabove.
ThesaidmeasureswereissuedbyPresidentAquinobeforeJuly
27, 1987, when the Congress of the Philippines was formally
convened and took over legislative power from her. They are not
midnightenactmentsintendedtopreemptthelegislaturebecause
E.O.No.228wasissuedonJuly17,1987,andtheothermeasures,
i.e.,Proc.No.131andE.O.No.229,werebothissuedonJuly22,
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
continuetobeinforceunless
_______________
16Angarav.ElectoralCommission,63Phil.139.
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TheargumentofsomeofthepetitionersthatProc.No.131andE.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
suchlimitsnowinSection6ofthelaw,whichinfactisoneofits
mostcontroversialprovisions.Thissectiondeclares:
RetentionLimits.ExceptasotherwiseprovidedinthisAct,nopersonmay
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
fertilityasdeterminedbythePresidentialAgrarianReformCouncil(PARC)
createdhereunder,butinnocaseshallretentionbythelandownerexceedfive
(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)yearsofageand(2)thatheisactuallytillingthelandordirectly
managing the farm Provided, That landowners whose lands have been
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VideogramRegulatoryBoard,151SCRA208.
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couldnothaverepealedP.D.No.27becausetheformerwasonlya
letter of instruction. The important thing is that it was issued by
PresidentMarcos,whosewordwaslawduringthattime.
But for all their peremptoriness, these issuances from the
President Marcos still had to comply with the requirement
for
21
publication as this Court held in Taadav.Tuvera. Hence, unless
publishedintheOfficialGazetteinaccordancewithArticle2ofthe
Civil Code, they could not have any force and effect if they were
among those enactments successfully challenged in that case. (LOI
474waspublished,though,intheOfficialGazettedatedNovember
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
departmentofthegovernment.Thatistrueasageneralproposition
but is subject to one important qualification. Correctly and
categoricallystated,theruleisthatmandamuswilllietocompelthe
discharge of the discretionary duty itself but not to control the
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Andwhileitistruethatasarulethewritwillnotbeproperaslong
asthereisstillaplain,speedyandadequateremedyavailablefrom
the administrative authorities, resort to the courts
may still be
23
permittediftheissueraisedisaquestionoflaw.
III
There are traditional distinctions between the police power and the
powerofeminentdomainthatlogicallyprecludetheapplicationof
both powers at the same time
on the same subject. In the case of
24
CityofBaguiov.NAWASA, forexample,wherealawrequiredthe
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
noxiouspurpose,suchasabuildingonthevergeofcollapse,which
should be demolished for the public safety, or obscene materials,
which should be destroyed in the interest of public morals. The
confiscationofsuchpropertyisnotcompensable,unlikethetaking
of property under the power of expropriation, which requires the
paymentofjustcompensationtotheowner.
25
InthecaseofPennsylvaniaCoalCo.v.Mahon, JusticeHolmes
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25
InthecaseofPennsylvaniaCoalCo.v.Mahon, JusticeHolmes
laiddownthelimitsofthepolicepowerinafamousaphorism: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
coalcompanywhichhadearliergrantedadeedtothelandoverits
minebutreservedallmining
_______________
23
VeteransAdministration,137SCRA314.
24106Phil.144.
25260US393.
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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
policepower.Hesaid:
Every restriction upon the use of property imposed in the exercise of the
policepowerdeprivestheownerofsomerighttheretoforeenjoyed,andis,in
that sense, an abridgment by the State of rights in property without making
compensation.Butrestrictionimposedtoprotectthepublichealth,safetyor
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 noxiousas it may because of
furtherchangesinlocalorsocialconditionstherestrictionwillhavetobe
removedandtheownerwillagainbefreetoenjoyhispropertyasheretofore.
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(referringtotheearliercaseofEuclidv.AmblerRealtyCo.,272US
365, which sustained a zoning law under the police power) makes
thefollowingsignificantremarks:
Euclid,moreover,wasdecidedinanerawhenjudgeslocatedthepoliceand
eminent domain powers on different planets. Generally speaking, they
viewed eminent domain as encompassing public acquisition of private
propertyforimprovementsthatwouldbeavailableforpublicuse,literally
construed.Tothepolicepower,ontheother
_______________
26Powellv.Pennsylvania,127US678Lutz v. Araneta,98 Phil. 148 Tio v. Videogram
RegulatoryBoard,supra.
372
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AssociationofSmallLandownersinthePhilippines,Inc.vs.Secretaryof
AgrarianReform
InPennCentralTransportationCo.v.NewYorkCity, decidedbya
63votein1978,theU.SSupremeCourtsustainedtherespondents
LandmarksPreservationLawunderwhichtheownersoftheGrand
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John J. Costonis, The Disparity Issue: A Context for the Grand Central
TerminalDecision,HarvardLawReview,Vol.91:40,1977,p.404.
28348US1954.
29438US104.
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whichhadbeendesignatedahistoriclandmark.Preservationofthe
landmarkwasheldtobeavalidobjectiveofthepolicepower.The
problem, however, was that the owners of the Terminal would be
deprived of the right to use the airspace above it although other
landownersintheareacoulddosoovertheirrespectiveproperties.
Whileinsistingthattherewasherenotaking,theCourtnonetheless
recognized certain compensatory rights accruing to Grand Central
Terminalwhichitsaidwouldundoubtedlymitigatethelosscaused
by the regulation. This fair compensation, as he called it, was
explainedbyProf.Costonisinthiswise:
InreturnforretainingtheTerminalsiteinitspristinelandmarkstatus,Penn
Central was authorized to transfer to neighboring properties the authorized
butunusedrightsaccruingtothesitepriortotheTerminalsdesignationasa
landmarkthe rights which would have been exhausted by the 59story
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
byconstructingorsellingtootherstherighttoconstructlarger,hencemore
30
profitablebuildingsonthetransfereesites.
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the physical possession of the said excess and all beneficial rights
accruing
_______________
30Seenote27.
374
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totheownerinfavorofthefarmerbeneficiary.Thisisdefinitelyan
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
violativeofthedueprocessandequalprotectionclauses.
ThechallengetoProc.No.131andE.O.Nos.228and299onthe
ground that no retention limits are prescribed has already been
discussedanddismissed.Itisnotedthatalthoughtheyexcitedmany
bitter exchanges during the deliberation of the CARP Law in
Congress, the retention limits finally agreed upon are, curiously
enough,notbeingquestionedinthesepetitions.Wethereforedonot
discuss them here. The Court will come to the other claimed
violationsofdueprocessinconnectionwithourexaminationofthe
adequacy of just compensation as required under the power of
expropriation.
The argument of the small farmers that they have been denied
equalprotectionbecauseoftheabsenceofretentionlimitshasalso
becomeacademicunderSection6ofR.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
agrarianreform,anobjectionalsomadebythesugarplantersonthe
groundthattheybelongtoaparticularclasswithparticularinterests
oftheirown.However,noevidencehasbeensubmittedtotheCourt
thattherequisitesofavalidclassificationhavebeenviolated.
Classification has been defined as the grouping of persons or
thingssimilartoeachotherincertainparticularsanddifferentfrom
31
eachotherinthesesameparticulars. Tobevalid,itmustconform
to the following requirements: (1) it must be based on substantial
distinctions(2)itmustbegermanetothepurposesofthelaw(3)it
mustnotbelimitedtoexistingconditionsonlyand(4)itmustapply
32
equally to all the members of the class. The Court finds that all
these requisites have been met by the measures here challenged as
arbitraryanddiscriminatory.
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________________
31InternationalHarvesterCo.v.Missouri,234US199.
32Peoplev.Cayat,68Phil.12.
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34USv.Toribio,15Phil.85Fabiev.CityofManila,21Phil.486Casev.Boardof
Health,24Phil.256.
376
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thebypassingofanindividualsrights.Itisnoexaggerationtosay
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
nationwhowoulddenyhimthatright.
That right covers the persons life, his liberty and his property
underSection1ofArticleIIIoftheConstitution.Withregardtohis
property,theownerenjoystheaddedprotectionofSection9,which
reaffirmsthefamiliarrulethatprivatepropertyshallnotbetakenfor
publicusewithoutjustcompensation.
Thisbringsusnowtothepowerofeminentdomain.
IV
EminentdomainisaninherentpoweroftheStatethatenablesitto
forciblyacquireprivatelandsintendedforpublicuseuponpayment
of just compensation to the owner. Obviously, there is no need to
expropriate where the owner is willing to sell under terms also
acceptabletothepurchaser,inwhichcaseanordinarydeedofsale
35
may be agreed upon by the parties. It is only where the owner is
unwilling to sell, or cannot accept the price or other conditions
offeredbythevendee,thatthepowerofeminentdomainwillcome
into play to assert the paramount authority of the State over the
interestsofthepropertyowner.Privaterightsmustthenyieldtothe
irresistible demands of the public interest on the timehonored
justification, as in the case of the police power, that the welfare of
thepeopleisthesupremelaw.
Butforallitsprimacyandurgency,thepowerofexpropriationis
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
fromtheinterpretationofthisprinciple.Basically,therequirements
for a proper exercise of the power are: (1) public use and (2) just
compensation.
________________
35Noblev.CityofManila,67Phil.1.
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377
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AssociationofSmallLandownersinthePhilippines,Inc.vs.
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LetusdisposefirstoftheargumentraisedbythepetitionersinG.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
agriculturallandsmaybecoveredbytheCARPastheConstitution
callsforthejustdistributionofallagriculturallands.Inanyevent,
the decision to redistribute private agricultural lands in the manner
prescribedbytheCARPwasmadebythelegislativeandexecutive
departmentsintheexercise of their discretion. We are not justified
inreviewingthatdiscretionintheabsenceofaclearshowingthatit
hasbeenabused.
A becoming courtesy admonishes us to respect the decisions of
the political departments when they decide what is known as the
politicalquestion.AsexplainedbyChiefJusticeConcepcioninthe
36
caseofTaadav.Cuenco:
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
issuesdependentuponthewisdom,notlegality,ofaparticularmeasure.
378
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AssociationofSmallLandownersinthePhilippines,Inc.vs.
SecretaryofAgrarianReform
Asearlierobserved,therequirementforpublicusehasalreadybeen
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
prescribedmaximumretentionlimits.ThepurposesspecifiedinP.D.
No.27,Proc.No.131andR.A.No.6657areonlyanelaborationof
the constitutional injuction that the State adopt the necessary
measures to encourage and undertake the just distribution of all
agriculturallandstoenablefarmerswhoarelandlesstoowndirectly
orcollectivelythelandstheytill.Thatpublicuse,aspronouncedby
thefundamentallawitself,mustbebindingonus.
Thesecondrequirement,i.e.,thepaymentofjustcompensation,
needsalongerandmorethoughtfulexamination.
Justcompensationisdefinedasthefullandfairequivalentofthe
39
propertytakenfromitsownerbytheexpropriator. Ithas
_______________
3857Led.1063.
39ManilaRailroadCo.v.Velasquez,32Phil.286.
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380
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depositwithanaccessiblebankdesignatedbytheDARofthecompensation
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
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thisConstitutionisreservedtoitforfinaldetermination.
Thus,althoughinanexpropriationproceedingthecourttechnicallywould
still have the power to determine the just compensation for the property,
following the applicable decrees, its task would be relegated to simply
statingthelowervalueofthepropertyasdeclaredeitherbytheownerorthe
assessor. As a necessary consequence, it would be useless for the court to
appointcommissionersunderRule67oftheRulesofCourt.Moreover,the
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need to satisfy the due process clause in the taking of private property is
seeminglyfulfilledsinceitcannotbesaidthatajudicialproceedingwasnot
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
andthatoftheassessor,anditschoiceisalwayslimitedtothelowerofthe
two.Thecourtcannotexerciseitsdiscretionorindependenceindetermining
whatisjustorfair.Evenagradeschoolpupilcouldsubstituteforthejudge
insofarasthedeterminationofconstitutionaljustcompensationisconcerned.
xxx
In the present petition, we are once again confronted with the same
questionofwhetherthecourtsunderP.D.No.1533,whichcontainsthesame
provision on just compensation as its predecessor decrees, still have the
powerandauthoritytodeterminejustcompensation,independentofwhatis
stated by the decree and to this effect, to appoint commissioners for such
purpose.
Thistime,weanswerintheaffirmative.
xxx
Itisviolativeofdueprocesstodenytheownertheopportunitytoprove
thatthevaluationinthetaxdocumentsisunfairorwrong.Anditisrepulsive
tothebasicconceptsofjusticeandfairnesstoallowthehaphazardworkofa
minorbureaucratorclerktoabsolutelyprevailoverthejudgmentofacourt
promulgated only after expert commissioners have actually viewed the
property,afterevidenceandargumentsproandconhavebeenpresented,and
after all factors and considerations essential to a fair and just determination
havebeenjudiciouslyevaluated.
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willstillhavetherighttoreviewwithfinalitythesaiddetermination
intheexerciseofwhatisadmittedlyajudicialfunction.
Thesecondandmoreseriousobjectiontotheprovisionsonjust
compensationisnotaseasilyresolved.
ThisreferstoSection18oftheCARPLawprovidinginfullas
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
providedforinSections16and17,andotherpertinentprovisionshereof,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
optionofthelandowner:
(1) Cashpayment,underthefollowingtermsandconditions:
(a) Forlandsabovefifty(50)hectares,insofarastheexcesshectarage
is concernedTwentyfive percent (25%) cash, the balance to be
paidingovernmentfinancialinstrumentsnegotiableatanytime.
(b) For lands above twentyfour (24) hectares and up to fifty (50)
hectaresThirty percent (30%) cash, the balance to be paid in
governmentfinancialinstrumentsnegotiableatanytime.
(c) Forlandstwentyfour(24)hectaresandbelowThirtyfivepercent
(35%)cash,thebalancetobepaidingovernment
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financialinstrumentsnegotiableatanytime.
(2) Shares of stock in governmentowned or controlled corporations,
LBPpreferredshares,physicalassetsorotherqualifiedinvestments
inaccordancewithguidelinessetbythePARC
(3) Taxcreditswhichcanbeusedagainstanytaxliability
(4) LBPbonds,whichshallhavethefollowingfeatures:
(a) Market interest rates aligned with 91day treasury bill rates. Ten
percent(10%)ofthefacevalueofthebondsshallmatureeveryyear
fromthedateofissuanceuntilthetenth(10th)year:Provided,That
shouldthelandownerchoosetoforegothecashportion,whetherin
fullorinpart,heshallbepaidcorrespondinglyinLBPbonds
(b) Transferability and negotiability. Such LBP bonds may be used by
the landowner, his successorsininterest or his assigns, up to the
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amountoftheirfacevalue,foranyofthefollowing:
(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
aresituated
(ii) Acquisition of shares of stock of governmentowned or controlled
corporationsorsharesofstockownedbythegovernmentinprivate
corporations
(iii) Substitution for surety or bail bonds for the provisional release of
accusedpersons,orforperformancebonds
(iv) Security for loans with any government financial institution,
providedtheproceedsoftheloansshallbeinvestedinaneconomic
enterprise, preferably in a small and mediumscale industry, in the
sameprovinceorregionasthelandforwhichthebondsarepaid
(v) Payment for various taxes and fees to government: Provided, That
theuseofthesebondsforthesepurposeswillbelimitedtoacertain
percentage of the outstanding balance of the financial instruments
Provided, further, That the PARC shall determine the percentages
mentionedabove
(vi) Payment for tuition fees of the immediate family of the original
bondholderingovernmentuniversities,colleges,tradeschools,and
otherinstitutions
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(vii) Paymentforfeesoftheimmediatefamilyoftheoriginalbondholder
ingovermenthospitalsand
(viii) SuchotherusesasthePARCmayfromtimetotimeallow.
ThecontentionofthepetitionersinG.R.No.79777isthattheabove
provisionisunconstitutionalinsofarasitrequirestheownersofthe
expropriatedpropertiestoacceptjustcompensationthereforinless
than money, which is the only medium of payment allowed. In
supportofthiscontention,theycitejurisprudenceholdingthat:
The fundamental rule in expropriation matters is that the owner of the
property expropriated is entitled to a just compensation, which should be
neithermorenorless,wheneveritispossibletomaketheassessment,than
themoney equivalent of said property. Just compensation has always been
understood to be the just and complete equivalent of the loss which the
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owner of the
thing expropriated has to suffer by reason of the
45
expropriation. (Emphasissupplied.)
46
InJ.M.TuazonCo.v.LandTenureAdministration, thisCourtheld:
Itiswellsettledthatjustcompensationmeanstheequivalentforthevalueof
the property at the time of its taking. Anything beyond that is more, and
anythingshortofthatisless,thanjustcompensation.Itmeansafairandfull
equivalentforthelosssustained,whichisthemeasureoftheindemnity,not
whatevergainwouldaccruetotheexpropriatingentity.Themarketvalueof
the land taken is the just compensation to which the owner of condemned
propertyisentitled,themarketvaluebeingthatsumofmoneywhichaperson
desirous,butnotcompelledtobuy,andanowner,willing,butnotcompelled
tosell,wouldagreeonasapricetobegivenandreceivedforsuchproperty.
(Emphasissupplied.)
_______________
45Manila Railroad Co. v. Velasquez,32 Phil. 286Province of Tayabas v. Perez,
supra,atnote40.
4631SCRA413.
385
VOL.175,JULY14,1989
385
AssociationofSmallLandownersinthePhilippines,Inc.vs.
SecretaryofAgrarianReform
IntheUnitedStates,wheremuchofourjurisprudenceonthesubject
hasbeenderived,theweightofauthorityisalsototheeffectthatjust
compensation for property expropriated is payable only in money
andnototherwise.Thus
The medium of payment of compensation is ready money or cash. The
condemnor cannot compel the owner to accept anything butmoney, 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
prescribedbytheConstitutionandthestatutes.Whenthepowerofeminent
domainisresortedto,theremustbeastandardmediumofpayment,binding
47
upon both parties, and the law has fixed that standard as money in cash.
(Emphasissupplied.)
Part cash and deferred payments are not and cannot, in the nature
of
48
things,beregardedasareliableandconstantstandardofcompensation.
Just compensation for property taken by condemnation means a fair
equivalentin money, which must be paid at least within a reasonable time
afterthetaking,anditisnotwithinthepoweroftheLegislaturetosubstitute
49
for such payment future obligations, bonds, or other valuable advantage.
(Emphasissupplied.)
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Itcannotbedeniedfromthesecasesthatthetraditionalmediumfor
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
areaissoughttobetakenbytheStatefromitsownerforaspecific
andperhapslocalpurpose.
_______________
47Mandlv.CityofPhoenix,18p2d273.
48SacrementoSouthernR.Co.v.Heilbron,156Cal.408,104pp.979,980.
49CityofWaterburyv.PlattBros.&Co.,56A856,76Conn,435citingButlerv.
RavineRoadSewerComrs,39N.J.L.665Bloodgoodv.Mohawkv.H.R.R.Co.,N.Y.
18Wend.935,31Am.Dec.313Sanbornv.Helden,51Cal266Burlington&C.R.
Co.v.Schweikart,14p.329,10Colo,17823WordsandPhrases,pl.460.
386
386
SUPREMECOURTREPORTSANNOTATED
AssociationofSmallLandownersinthePhilippines,Inc.vs.
SecretaryofAgrarianReform
Whatwedealwithhereisarevolutionarykindofexpropriation.
Theexpropriationbeforeusaffectsallprivateagriculturallands
wheneverfoundandofwhateverkindaslongastheyareinexcess
ofthemaximumretentionlimitsallowedtheirowners.Thiskindof
expropriation is intended for the benefit not only of a particular
communityorofasmallsegmentofthepopulationbutoftheentire
Filipinonation,fromalllevelsofoursociety,fromtheimpoverished
farmertothelandgluttedowner.Itspurposedoesnotcoveronlythe
whole territory of this country but goes beyond in time to the
foreseeablefuture,whichithopestosecureandedifywiththevision
andthesacrificeofthepresentgenerationofFilipinos.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
thoughtfulnesstoday.And,finally,letitnotbeforgottenthatitisno
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
nowbecomethekeyatleasttotheirdeliverance.
Suchaprogramwillinvolvenotmeremillionsofpesos.Thecost
will be tremendous. Considering the vast areas of land subject to
expropriationunderthelawsbeforeus,weestimatethathundredsof
billionsofpesoswillbeneeded,farmoreindeedthantheamountof
P50billioninitiallyappropriated,whichisalreadystaggeringasitis
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VOL.175,JULY14,1989
387
AssociationofSmallLandownersinthePhilippines,Inc.vs.
SecretaryofAgrarianReform
farmers.Wemaythereforeassumethattheirintentionwastoallow
suchmannerofpaymentasisnowprovidedforbytheCARPLaw,
particularlythepaymentofthebalance(iftheownercannotbepaid
fully with money), or indeed of the entire amount of the just
compensation,withotherthingsofvalue.Wemayalsosupposethat
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
theydeliberatedonthenewCharterandwithwhichtheypresumably
agreedinprinciple.
The Court has not found in the records of the Constitutional
Commission any categorial agreement among the members
regardingthemeaningtobegiventheconceptofjustcompensation
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 Statesubsidized compensation
werealsoproposed.Intheend,however,nospecialdefinitionofthe
just compensation
for the lands to be expropriated was reached by
50
theCommission.
On the other hand, there is nohing in the records either that
militates against the assumptions we are making of the general
sentimentsandintentionofthemembersonthecontentandmanner
of the payment to be made to the landowner in the light of the
magnitudeoftheexpenditureandthelimitationsoftheexpropriator.
With these assumptions, the Court hereby declares that the
content and manner of the just compensation provided for in the
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243247.
388
388
SUPREMECOURTREPORTSANNOTATED
AssociationofSmallLandownersinthePhilippines,Inc.vs.
SecretaryofAgrarianReform
fromtherealitiesanddemandsofsocietyoroblivioustotheneedfor
itsenhancement.TheCourtisasacutelyanxiousastherestofour
people to see the goal of agrarian reform achieved at last after the
frustrationsanddeprivationsofourpeasantmassesduringallthese
disappointing decades. We are aware that invalidation of the said
sectionwillresultin the nullification of the entire program, killing
the farmers hopes even as they approach realization and
resurrecting the spectre of discontent and dissent in the restless
countryside.ThatisnotinourviewtheintentionoftheConstitution,
andthatisnotwhatweshalldecreetoday.
Accepting the theory that payment of the just compensation is
notalwaysrequiredtobemadefullyinmoney,wefindfurtherthat
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
balanceinbondsandotherthingsofvalue.Nolessimportantly,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
valueequivalenttotheamountofjustcompensation.
Admittedly,thecompensationcontemplatedinthelawwillcause
thelandowners,bigandsmall,notalittleinconvenience.Asalready
remarked,thiscannotbeavoided.Nevertheless,itisdevoutlyhoped
thatthesecountrymenofours,consciousasweknowtheyareofthe
needfortheirforebearanceandevensacrifice,willnotbegrudgeus
their indispensable share in the attainment of the ideal of agrarian
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reform. Otherwise, our pursuit of this elusive goal will be like the
questfortheHolyGrail.
Thecomplaintagainsttheeffectsofnonregistrationoftheland
underE.O.No.229doesnotseemtobeviableanymoreas
389
VOL.175,JULY14,1989
389
AssociationofSmallLandownersinthePhilippines,Inc.vs.
SecretaryofAgrarianReform
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53Ibid.
390
390
SUPREMECOURTREPORTSANNOTATED
AssociationofSmallLandownersinthePhilippines,Inc.vs.
SecretaryofAgrarianReform
54
as1838,inRubottomv.McLure, itwasheldthatactualpayment
totheownerofthecondemnedpropertywasaconditionprecedent
totheinvestmentofthetitletothepropertyintheStatealbeitnot
55
totheappropriationofittopublicuse.InRexfordv.Knight, the
Court of Appeals of New York said that the construction upon the
statuteswasthatthefeedidnotvestintheStateuntilthepaymentof
the compensation although the authority to enter upon and
appropriate the land was complete prior to the payment. Kennedy
furthersaidthatbothonprincipleandauthoritytheruleisxxxthat
therighttoenteronandusethepropertyiscomplete,assoonasthe
property is actually appropriated under the authority of law for a
publicuse,butthatthetitledoesnotpassfromtheownerwithouthis
consent,untiljustcompensationhasbeenmadetohim.
Our own Supreme
Court has held in Visayan Refining Co. v.
56
CamusandParedes, that:
Ifthelawswhichwehaveexhibitedorcitedintheprecedingdiscussionare
attentively examined it will be apparent that the method of expropriation
adoptedinthisjurisdictionissuchastoaffordabsolutereassurancethatno
piece of land can be finally and irrevocably taken from an unwilling owner
untilcompensationispaidxxx.(Emphasissupplied.)
391
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VOL.175,JULY14,1989
391
AssociationofSmallLandownersinthePhilippines,Inc.vs.
SecretaryofAgrarianReform
AllqualifiedfarmerbeneficiariesarenowdeemedfullownersasofOctober
21,1972ofthelandtheyacquiredbyvirtueofPresidentialDecreeNo.27.
(Emphasissupplied.)
itwasobviouslyreferringtolandsalreadyvalidlyacquiredunderthe
said decree, after proof of fullfledged 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
advancepaymentfortheland.
TheCARPLaw,foritspart,conditionsthetransferofpossession
and ownership of the land to the government on receipt by the
landownerofthecorrespondingpaymentorthedepositbytheDAR
ofthecompensationincashorLBPbondswithanaccessiblebank.
57
Until then, title also remains with the landowner. No outright
changeofownershipiscontemplatedeither.
Hence, the argument that the assailed measures violate due
process by arbitrarily transferring title before the land is fully paid
formustalsoberejected.
It is worth stressing at this point that all rights acquired by the
tenantfarmerunderP.D.No.27,asrecognizedunderE.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
thatthelandownerswhoselandshavebeencoveredbyPresidential
DecreeNo.27shallbeallowedtokeeptheareaoriginallyretained
by them thereunder, further, That original homestead grantees or
directcompulsoryheirswhostillowntheoriginalhomesteadatthe
timeoftheapprovalofthisActshallretainthesameareasaslongas
theycontinuetocultivatesaidhomestead.
In connection with these retained rights, it does not appear in
G.R.No.78742thattheappealfiledbythepetitionerswiththe
________________
57Sec.16(d).
392
392
SUPREMECOURTREPORTSANNOTATED
AssociationofSmallLandownersinthePhilippines,Inc.vs.
SecretaryofAgrarianReform
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OfficeofthePresidenthasalreadybeenresolved.Althoughwehave
saidthatthedoctrineofexhaustionofadministrativeremediesneed
not preclude immediate resort to judicial action, there are factual
issues that have yet to be examined on the administrative level,
especiallytheclaimthatthepetitionersarenotcoveredbyLOI474
becausetheydonotownotheragriculturallandsthanthesubjectsof
theirpetition.
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
entitledtothenewretentionrightsprovidedforbyR.A.No.6657,
whichinfactareonthewholemoreliberalthanthosegrantedbythe
decree.
V
The CARP Law and the other enactments also involved in these
caseshavebeenthesubjectofbitterattackfromthosewhopointto
the shortcomings of these measures and ask that they be scrapped
entirely.Tobesure, these enactments are less than perfect indeed,
theyshouldbecontinuouslyreexaminedandrehoned,thattheymay
be sharper instruments for the better protection of the farmers
rights. But we have to start somewhere. In the pursuit of agrarian
reform, we do not tread on familiar ground but grope on terrain
fraughtwithpitfallsandexpecteddifficulties.Thisisinevitable.The
CARPLawisnotatriedandtestedproject.Onthecontrary,touse
Justice Holmess 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
althoughweshouldstriveforitbyallmeans.Meantime,westruggle
asbestwecaninfreeingthefarmerfromtheironshacklesthathave
unconscionably,andforsolong,fetteredhissoultothesoil.
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
exploitationanddisdainofthepastandfromhisown
393
VOL.175,JULY14,1989
393
AssociationofSmallLandownersinthePhilippines,Inc.vs.
SecretaryofAgrarianReform
feelingsofinadequacyandhelplessness.Atlasthisservitudewillbe
endedforever.Atlastthefarmonwhichhetoilswillbehisfarm.It
willbehisportionoftheMotherEarththatwillgivehimnotonly
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thestaffoflifebutalsothejoyofliving.Andwhereonceitbredfor
himonlydeepdespair,nowcanheseeinitthefruitionofhishopes
foramorefulfillingfuture.Nowatlastcanhebanishfromhissmall
plotofearthhisinsecuritiesanddarkresentmentsandrebuildinit
themusicandthedream.
WHEREFORE,theCourtholdsasfollows:
1. R.A.No.6657,P.D.No.27,Proc.No.131,andE.O.Nos.
228and229areSUSTAINEDagainstalltheconstitutional
objectionsraisedinthehereinpetitions.
2. Titletoallexpropriatedpropertiesshallbetransferredtothe
State only upon full payment of compensation to their
respectiveowners.
3. All rights previously acquired by the tenantfarmers under
P.D.No.27areretainedandrecognized.
4. Landowners who were unable to exercise their rights of
retentionunderP.D.No.27shallenjoytheretentionrights
granted by R.A. No. 6657 under the conditions therein
prescribed.
5. Subjecttotheabovementionedrulings,allthepetitionsare
DISMISSED,withoutpronouncementastocosts.
SOORDERED.
Fernan,(C.J.),Narvasa,MelencioHerrera,Gutierrez,Jr.,
Paras, Feliciano, Gancayco, Padilla, Bidin, Sarmiento, Corts,
GrioAquino,MedialdeaandRegalado,JJ.,concur.
Petitionsdismissed.
Notes.Actionforrecognitionasalesseeandtofixrentalsnot
similar to action to determine if lessee had not been given his full
shareofharvest(Calderonvs.delaCruz,138SCRA173).
DenialofreferralofcasetotheMinistryofAgrarianReformisin
violationoftheexpressmandateofP.D.No.316.(Erfevs.Fortun,
136SCRA552).
o0o
394
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