Association de Agricultores vs.Talisay Silay Milling Co.

February 19, 1979

FACTS: On June 1952, Republic Act 809 was enacted for the purpose of addressing the
necessity to increase the share of planters and laborers in the income derived from the
sugar industry. Said act was to regulate the relations among the persons engaged in the
sugar industry. Under Section 1 thereof, it was provided that in the absence of written
milling agreements between the majority of planters and the millers of sugarcane in any
milling district in the Philippines, the unrefined sugar produced in that district from the
milling by any sugar central of the sugar cane of any sugarcane planter or planter owner,
as well as all byproducts and derivative thereof, shall be divided between them
depending on the maximum actual production. The higher the rate of production, the
bigger the percentage given to the planters.
The Association de Agricultores de TalisayvSilay Inc. and six sugarcane planters
(PLANTERS) filed a petition to the Secretary of Labor, praying that the latter declare the
applicability of the RA 809 to the Talisay Silay Mill District (CENTRAL) for every crop year
starting from 1952-1962.
CENTRAL alleged that RA 809 was invalid and unconstitutional and even if it was valid,
the planters had written milling contracts with them at the time the said act went into
effect, and the planters who entered into said contracts did so voluntarily and those
voluntary contracts may not be altered or modified without infringing the constitutional
guarantee on freedom of contracts and non-impairment clause of the Constitution.
CENTRAL also alleged that the law violates the equal protection clause since bigger
milling districts should provide bigger shares than smaller ones.
ISSUE: Whether RA 809 would violate the non-impairment clause of the Constitution and
infringe the Constitutional guarantee on freedom of contracts if applied to the Talisay
Silay Mill District. And whether RA 809 violates the equal protection clause.

HELD: No. RA 809 is a social justice and police power measure for the
promotion of labor conditions in sugar plantations. Hence, whatever rational
degree of constraint it exerts on freedom of contract and existing contractual obligation
as is constitutionally permissible. The said act was concerned and enacted as a social
legislation designed primarily to ameliorate the condition of the laborers in the sugar
plantation. Having in view its primary objective, to promote the interests of the laborer, it
can never be possible that the State would be bereft of constitutional authority to enact
legislations of its kind.
Section 5 of Article II of the Constitution of 1935, under the aegis of which the law in
question was enacted, made it one of the declared principles to which the people
committed themselves that "the promotion of social justice to insure the
wellbeing and economic security of all the people should be the concern of the
State." More specifically in regard to labor, there was also Section 6 of Article XIX, to the
effect that "the State shall afford protection to labor ... and shall regulate the
relation between . . . labor and capital in industry and in agriculture.
With regard to equal protection, the Republic Act did not violate such clause. The
obvious standard used by the legislature is the amount of production in each district.
Naturally, the planters adhered to the bigger centrals should be given bigger shares,
considering that the more a sugar central produces, the bigger its margin of profit which
can be correspondingly cut for the purpose of enlarging the share of the planters.
Understandably, the smaller centrals may not be able to afford to have their shares
reduced substantially, which is evidently the reason why the law has not been made
applicable to centrals having a production of less than 150,000 piculs a year.