Soliman v.  The property subject of this case is situated at Cabalantian, Bacolor, Whether the No.
ther the No. Tenants are defined as persons who in themselves and with the aid
Pampanga Pampanga, with an area of ten (10) hectares, more or less, previously
Sugar covered by Transfer Certificate of Title (TCT) No. 70829-R and formerly
Development owned by one Dalmacio Sicat (Dalmacio).
Company, Inc.,  Respondent’s version: Dalmacio offered to sell the subject property to
589 SCRA 236 respondent Pampanga Sugar Development Company (PASUDECO), a
(2009) domestic corporation engaged in sugar milling, to be used as a housing
GR#169589 complex for PASUDECO's laborers and employees at P4/square meter
 The sale was approved by the Court of Agrarian Relations (CAR)
 due to financial setbacks suffered after the imposition of Martial Law in
1972, PASUDECO deferred the construction of the housing project.
 Petitioners’ version: they started working on the subject property with
corresponding area of tillage on the land allegedly managed by the late
respondent Gerry Rodriguez, manager of PASUDECO from 1970-1991
 Petitioners alleged that in 1970, Gerry made one Ciriaco Almario
(Ciriaco) his overseer/caretaker, tasked to collect lease rentals from
petitioners.
 petitioners averred that for a period of almost twenty (20) years, they
had been in actual and peaceful possession and cultivation of the
subject property.
 The real controversy arose when PASUDECO decided to pursue the
development of the property into a housing project for its employees in
the latter part of April 1990, hence they filed a complaint against Gerry
before Provincial Agrarian Reform Adjudicator (PARAD)
 Petitioners alleged that Gerry, together with armed men, entered the
property and destroyed some of their crops. Gerry raised as one of his
defenses the fact that PASUDECO was the owner of the subject
property, hence PASUDECO was impleaded as party-defendant
 PARAD dismissed petitioner’s complaint ruling that they had not shown
direct proof that they were tenants of the subject property (ex. lease
rentals receipts) and that there was no consent given by PASUDECO
to create a tenancy relationship
 On appeal to the Department of Agrarian Reform Adjudication Board
(DARAB), the decision was reversed, holding that petitioners cultivated
the property and shared their harvests with PASUDECO, received by
Gerry through Ciriaco. Later on, when Gerry refused to accept their
lease rentals, petitioners deposited the money with LBP. The DARAB
opined that these pieces of evidence established the fact of consent and
sharing.
 CA reversed the DARAB ruling and reinstated PARAD’s decision
petitioners are available from within their immediate farm households cultivate the land
de jure tenants belonging to or possessed by another, with the latter's consent, for
of the subject purposes of production, sharing the produce with the landholder under
property. the share tenancy system, or paying to the landholder a price certain or
ascertainable in produce or money or both under the leasehold tenancy
Agrarian system.
Peace (State
Power in The following are the essential elements of tenancy: 1) the parties are the
Tenancy landowner and the tenant or agricultural lessee; 2) the subject matter of the
Relations) relationship is an agricultural land; 3) there is consent between the parties to the
relationship; 4) the purpose of the relationship is to bring about agricultural
production; 5) there is personal cultivation on the part of the tenant or agricultural
lessee; and 6) the harvest is shared between landowner and tenant or
agricultural lessee.
Under R.A. 3844, two modes are provided for in the establishment of an
agricultural leasehold relation: (1) by operation of law in accordance with
Section 4 of the said act; or (2) by oral or written agreement, either express or
implied. By operation of law simply means the abolition of the agricultural
share tenancy system and the conversion of share tenancy relations into
leasehold relations. The other method is the agricultural leasehold contract,
which may either be oral or in writing.
Rather, consistent with the parties' assertions, what we have here is an alleged
case of tenancy by implied consent. As such, crucial for the creation of tenancy
relations would be the existence of two of the essential elements, namely,
consent and sharing and/or payment of lease rentals which are absent. As duly
found by the PARAD and the CA, Gerry was not authorized to enter into a
tenancy relationship with the petitioners. Other than their bare assertions,
petitioners rely on the certification of Ciriaco who, likewise, failed to substantiate
his claim that Gerry authorized him to select individuals and install them as
tenants of the subject property. Absent substantial evidence showing Ciriaco's
authority from PASUDECO, or even from Gerry, to give consent to the creation
of a tenancy relationship, his actions could not give rise to an implied tenancy.
Not a single receipt was ever issued by Gerry, duly acknowledging payment of
these rentals from Ciriaco who, allegedly, personally collected the same from
the petitioners. Notably, the fact of working on another's landholding, standing
alone, does not raise a presumption of the existence of agricultural tenancy
Occupancy and continued possession of the land will not ipso facto make
one a de jure tenant, because the principal factor in determining whether
a tenancy relationship exists is intent.

Perez-Rosario  an action for ejectment filed with the DARAB principally on the grounds
v. Court of of non-payment of lease rentals and sub-leasing without the knowledge
Appeals, and consent of the owners of a parcel of agricultural land located at
(2006), 494 Pangasinan and registered in the name of Nicolasa Tamondong Vda.
SCRA 66 de Perez, predecessor-in-interest of the petitioners
(2006) GR#  Nicolasa Tamondong Vda. de Perez sold the property with a right to
140796 repurchase in favor of [respondent] Miguel Resultay who was already
cultivating the subject land under a 50-50 sharing basis of the rice
harvest
 After said sale, Miguel Resultay stopped delivering the shares to
Nicolasa Tamondong and it was during this period or sometime in 1976,
that [respondent] Miguel Resultay constituted [respondent] Basilio
Cayabyab to work on a one-half (1/2) hectare portion of the land
devoted to rice under an agreed lease rental agreement
 On July 15, 1977, Nicolasa Tamondong Vda. de Perez died. She is
survived by her children [petitioners herein]
 [petitioners] Purificacion and Federico Rosario repurchased the
subject property from [respondent] Miguel Resultay
 On November 24, 1988, [petitioners] filed the instant complaint for
ejectment of defendants from the land on the grounds that: a)
[respondent] Miguel Resultay delivered only 33.30 cavans of palay to
them (plaintiffs); b) [respondents] Miguel Resultay and Federico
Baniqued constructed their own residential houses on the subject
landholding without their knowledge and consent; c) [respondent]
Miguel Resultay is now old and senile and is no longer capable of doing
the necessary manual work; and, d) due to old age, [respondent] Miguel
Resultay sub-leased the land to [respondents] Federico Baniqued and
Basilio Cayabyab without [petitioners] knowledge and consent
 [Respondents] controverted the allegations of [petitioners] by averring
that: 1) [respondent] Federico Baniqued is only a hired farm worker who
First, there is no credible evidence to show that the alleged caretaker, Ciriaco
Almario, was designated by PASUDECO or its manager, Gerry Rodriguez, to
facilitate the cultivation of the property.
Second, it is indeed inconceivable, as petitioner claims, for the respondents to
allow petitioners to work on the property considering that before its purchase,
the prior owner, Dalmacio Sicat, sought for the voluntary surrender of the
landholding agreement with the previous tenants of the property so that the
same can be sold to PASUDECO free from tenancy.
Third, the certifications issued by Isidro S. Almario as BARC Chairman of
Agdiman, Bacolor, Pampanga to the effect that respondents were actually
cultivating he subject property deserves scant consideration. Said certifications
can easily be considered as self-serving since the issuing officer is himself one
of the respondents who claimed to be tenants of the subject property and it is
quite natural for him not to declare anything which is adverse to his interest.
Whether Yes. Petitioners insist that respondent spouses Miguel and Mercedes Resultay
Mercedes did not perform in their personal capacity the major phases of the farm work
Resultay and over the land in question, but through hired hands. Both the CA and the DARAB
Basilio are of the same opinion that this negative averment has no factual basis. While
Cayabyab are it is conceded in all quarters that respondent Baniqued is a hired farm worker,
agricultural from this fact alone, it cannot be inferred that respondent Mercedes Resultay is
lessees over not actually performing her obligations as an agricultural tenant or, stated
the landholding otherwise, that she did not cultivate the land in person or through other members
co-owned by of the immediate household.
the petitioners.
Under Section 37 of Republic Act No. 3844, as amended, and coupled with the
fact that the petitioners are the complainants themselves, the burden of proof to
show the existence of a lawful cause for the ejectment of an agricultural lessee
rests upon them, since they are the agricultural lessors.[21] This proceeds from
the principle that a tenancy relationship, once established, entitles the tenant to
a security of tenure. She can only be ejected from the agricultural landholding
on grounds provided by law.[22] Section 36 of the same law enumerates the
grounds for dispossession of the tenants landholding.
A person, in order to be considered a tenant, must himself and with the aid
available from his immediate farm household cultivate the land. Persons,
therefore, who do not actually work the land cannot be considered tenants; and
he who hires others whom he pays for doing the cultivation of the land, ceases
to hold, and is considered as having abandoned the land as tenant within the
meaning of sections 5 and 8 of Republic Act No. 1199, and ceases to enjoy the
status, rights, and privileges of one.
But precisely, as discussed above, it falls upon the petitioners to demonstrate
through substantial evidence that the respondents did not actually cultivate the
land in order to consider the latter as having abandoned the same. It does not
 constructed a shanty inside the disputed landholding for the purpose of
guarding the plants inside the land; 2) [respondent] Miguel Resultay has
been cultivating the land since 1973 and he had constructed his house
on the land itself; 3) the net harvest during the agricultural year of 1987
was twenty-one (21) cavans and one (1) can, and it was divided into 50-
50 basis; 4) [respondent] Basilio Cayabyab is an agricultural lessee on
a portion of one-half hectare of the land paying a lease rental of seven
(7) cavans of palay; and 5) the lease rental of seven (7) cavans which
is being paid by Basilio Cayabyab is excessive and unjustifiable
considering that he can produce 14 to 18 cavans of palay.
 The Office of the Provincial Agrarian reform Adjudicator promulgated its
decision declaring Mercedes Resultay as having succeeded her
husband as agricultural lessee
 They also concluded that Mercedes hired respondent Baniqued to work
for her and that that although the receipt of the lease rentals by
petitioner Federico Rosario is indicative of respondent Cayabyabs
status as an agricultural lessee on the one-half hectare riceland portion,
he should be evicted on the ground of deliberate refusal to pay rental;
 The DARAB reversed the decision holding that Cayabyab is a bona
fide agricultural lessee; that he substantially complied with his obligation
to deliver the landholders share and was not remiss in paying the rentals
whenever they fell due
 CA affirmed
Association of These are consolidated cases involving common legal questions including
Small serious challenges to the constitutionality of R.A. No. 6657 also known as
Landowners v. the "Comprehensive Agrarian Reform Law of 1988"
Secretary of
Agrarian In G.R. No. 79777, the petitioners are questioning the P.D No. 27 and E.O
Reform, 175 Nos. 228 and 229 on the grounds inter alia of separation of powers, due
SCRA 343 process, equal protection and the constitutional limitation that no private
(1989) property shall be taken for public use without just compensation.
GR#78742
In G.R. No. 79310, the petitioners in this case claim that the power to provide
for a Comprehensive Agrarian Reform Program as decreed by the
Constitution belongs to the Congress and not to the President, the also allege
that Proclamation No. 131 and E.O No. 229 should be annulled for violation
of the constitutional provisions on just compensation, due process and equal
protection. They contended that the taking must be simultaneous with
payment of just compensation which such payment is not contemplated in
Section 5 of the E.O No. 229.
follow that, if the tenant hires a farm worker to do certain phases of the farm
work, then the tenant entirely ceases all cultivation.
While the law explicitly requires the agricultural lessee and his immediate family
to work on the land, this Court nevertheless has declared that the hiring of farm
laborers by the tenant on a temporary, occasional, or emergency basis does not
negate the existence of the element of personal cultivation essential in a tenancy
or agricultural leasehold relationship.
As correctly noted by the DARAB, it appears that the juridical relationship of the
Miguel and Cayabyab is still governed by agricultural share tenancy. The
relationship should be converted into a leasehold. On August 8, 1963, R.A. No.
3844, the Agricultural Land Reform Code, abolished and outlawed share
tenancy and put in its stead the agricultural leasehold system. On September
10, 1971, R.A. No. 6389, amending R.A. No. 3844, declared share tenancy
relationships as contrary to public policy. R.A. No. 3844, as amended by R.A.
No. 6389, is the governing statute in this case.[39] Petitioners filed their
complaint on November 24, 1988 or long after the approval of R.A. No. 6389
but before R.A. No. 6657, otherwise known as the Comprehensive Agrarian
Reform Law of 1988. Notably, R.A. No. 6657 only expressly repealed Section
35 of R.A. No. 3844.[40]
Sections 4 and 5[41] of R.A. No. 3844 provide for the automatic conversion of
share tenancy to agricultural leasehold. The lease rental should be determined
in accordance with Section 12[42] of R.A. No. 6657 in relation to Section
34[43] of R.A. No. 3844, as amended, and existing rules and regulations.
Whether or not Police Power through the Power of Eminent Domain, though there
the laws being are traditional distinction between the police power and the power of eminent
challenged is a domain, property condemned under police power is noxious or intended for
valid exercise noxious purpose, the compensation for the taking of such property is not subject
of Police to compensation, unlike the taking of the property in Eminent Domain or the
power or power of expropriation which requires the payment of just compensation to the
Power of owner of the property expropriated.
Eminent
Domain.
1. No. The Association had not shown any proof that they belong to a different
class exempt from the agrarian reform program. Under the
1. Whether or law, classification has been defined as the grouping of persons or things similar
not there was to each other in certain particulars and different from each other in these same
a violation of particulars. To be valid, it must conform to the following requirements:
the equal (1) it must be based on substantial distinctions;
protection (2) it must be germane to the purposes of the law;
clause. (3) it must not be limited to existing conditions only; and
2. Whether or (4) it must apply equally to all the members of the class.
not there is a
In G.R. No. 79744, the petitioner argues that E.O Nos. 228 and 229 were
invalidly issued by the President and that the said executive orders
violate the constitutional provision that no private property shall be taken
without due process or just compensation which was denied to the
petitioners.
In G.R. No 78742 the petitioners claim that 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 of the decree.
They therefore ask the Honorable Court for a writ of mandamus to compel
the respondents to issue the said rules.
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 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. 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
(PP131’s) implementation, was also enacted. Afterwhich 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.
violation of due Equal protection simply means that all persons or things similarly situated must
process. be treated alike both as to the rights conferred and the liabilities imposed. The
3. Whether or Association have not shown that they belong to a different class and entitled to
not just a different treatment. The argument that not only landowners but also owners of
compensation, other properties must be made to share the burden of implementing land reform
under the must be rejected. There is a substantial distinction between these two classes
agrarian of owners that is clearly visible except to those who will not see. There is no
reform need to elaborate on this matter. In any event, the Congress is allowed a wide
program, must leeway in providing for a valid classification. Its decision is accorded recognition
be in terms of and respect by the courts of justice except only where its discretion is abused
cash. 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 have to be made in cash – if everything is in
cash, then the government will not have sufficient money hence, bonds, and
other securities, i.e., shares of stocks, may be used for just compensation.
 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.
Confederation Confederation of Sugar Producers Association, Inc (CONFED), the National
of Sugar Federation of Sugarcane Planters, Inc. (NFSP), United Sugar Producers
Producers Federation of the Phil., Inc. (UNIFED), the Panay Federation of Sugarcane
Association, Farmers, Inc. (PANAYFED). It seeks, inter alia, to enjoin the Department of
Inc. v. Agrarian Reform(DAR), the Land Bank of the Philippines(LBP), and the Land
Department of Registration Authority(LRA) from "subjecting the sugarcane farms of
Agrarian Petitioner Planters to eminent domain or compulsory acquisition without filing
Reform, 519 the necessary expropriation proceedings pursuant to the provisions of Rule
SCRA 582 67 of the Rules of Court and/or without the application or conformity of a
(2007) majority of the regular farmworkers on said farms."
GR#169514
Petitioners CONFED, NFSP, UNIFED and PANAYFED claim that their
members own or administer private agricultural lands devoted to sugarcane.
They and their predecessors-in-interest have been planting sugarcane on
their lands allegedly since time immemorial. While their petition is
denominated as one for prohibition and mandamus, the petitioners likewise
seek to nullify paragraphs (d), (e) and (f) of Section 16 of RA 6657, otherwise
known as the Comprehensive Agrarian Reform Law. In other words, their
arguments, are anchored on the proposition that these provisions are
unconstitutional.
The petitioners thus contend that a landowner cannot be deprived of his
property until expropriation proceedings are instituted in court. They insist
that the expropriation proceedings to be followed are those prescribed under
Rule 67 of the Revised Rules of Court. In other words, for a valid exercise of
the power of eminent domain, the Government must institute the necessary
expropriation proceedings in the competent court in accordance with the
provisions of the Rules of Court.
WON 1) Yes. The validity of Section 16, including paragraphs (d), (e) and (f) thereof,
paragraphs of RA 6657 has already been affirmed in Association of Small Landowners,
d,e,and f of which sets forth the manner of acquisition of private agricultural lands and
RA6657 valid? ascertainment of just compensation, in this wise:
Where the State itself is the expropriator, it is not necessary for it to make a
WON the deposit upon its taking possession of the condemned property, as "the
compulsory compensation is a public charge, the good faith of the public is pledged for its
acquisition of payment, and all the resources of taxation may be employed in raising the
land valid? amount." 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. x x x 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
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.
(2) Contrary to the petitioners’ submission that the compulsory acquisition
procedure adopted by the DAR is without legal basis, it is actually based on
Section 16 of RA 6657. Under the said law, there are two modes of acquisition
 of private agricultural lands: compulsory and voluntary. The procedure for
compulsory acquisition is that prescribed under Section 16 of RA 6657.
In Roxas & Co., Inc. v. Court of Appeals:
In the compulsory acquisition of private lands, the landholding, the landowners
and the farmer beneficiaries must first be identified. After identification, the DAR
shall send a Notice of Acquisition to the landowner, by personal delivery or
registered mail, and post it in a conspicuous place in the municipal building and
barangay hall of the place where the property is located. Within thirty days from
receipt of the Notice of Acquisition, the landowner, his administrator or
representative shall inform the DAR of his acceptance or rejection of the offer.
If the landowner accepts, he executes and delivers a deed of transfer in favor of
the government and surrenders the certificate of title. Within thirty days from the
execution of the deed of transfer, the Land Bank of the Philippines (LBP) pays
the owner the purchase price. If the landowner rejects the DAR’s offer or fails to
make a reply, the DAR conducts summary administrative proceedings to
determine just compensation for the land. The landowner, the LBP
representative and other interested parties may submit evidence on just
compensation within fifteen days from notice. Within thirty days from
submission, the DAR shall decide the case and inform the owner of its decision
and the amount of just compensation. Upon receipt by the owner of the
corresponding payment, or, in case of rejection or lack of response from the
latter, the DAR shall deposit the compensation in cash or in LBP bonds with an
accessible bank. The DAR shall immediately take possession of the land and
cause the issuance of a transfer certificate of title in the name of the Republic of
the Philippines. The land shall then be redistributed to the farmer beneficiaries.
Any party may question the decision of the DAR in the regular courts for final
determination of just compensation.

Hospicio de Petitioner Hospicio de San Jose de Barili ("Hospicio") is a charitable Whether or not Under Section 4 of the CARL, place under coverage are all public and private
San Jose de organization created as a body corporate in 1925 by Act No. 3239. The law provision in agricultural lands regardless of tenurial arrangement and commodity
Barili, Cebu was enacted in order to formally accept the offer made by Pedro Cui and Section 4 of produced, subject to the exempted lands listed in Section 10 thereof. We
City v. Benigna Cui to establish a home for the care and support, free of charge, of Act No. 3239 agree with the Court of Appeals that neither P.D. No. 27 nor the CARL
Department of indigent invalids and incapacitated and helpless persons. prohibiting the exempts the lands of the Hospicio or other charitable institutions from the
Agrarian sale of the coverage of agrarian reform. Ultimately, the result arrived at in the assailed
Reform, (2005). The Department of Agrarian Reform Regional Office (DARRO) Region VII properties issuances should be affirmed. Nonetheless, both the DAR Secretary and the
GR#140847 issued an order ordaining that two parcels of land owned by the Hospicio be donated to the appellate court failed to appreciate what to this Court is indeed the decisive
placed under Operation Land Transfer in favor of twenty-two (22) tillers charitable legal dimension of the case.
thereof as beneficiaries. Presidential Decree (P.D.) No. 27, a land reform organization
law, was cited as legal basis for the order. The Hospicio filed a motion for the that was Agrarian reform is justified under the State's inherent power of eminent domain
reconsideration of the order with the Department of Agrarian Reform (DAR) incorporated that enables it to forcibly acquire private lands intended for public use upon
Secretary, citing the aforementioned Section 4 of Act No. 3239. It argued that by the same payment of just compensation to the owner. It has even been characterized as
Act No. 3239 is a special law, which could not have been repealed by P.D. law bars the beyond the traditional exercise of eminent domain, but a revolutionary kind of
No. 27, a general law, or by the latter's general repealing clause. implementation expropriation.
of agrarian
The DAR Secretary rejected the motion for reconsideration in an Order held reform laws as This characterization is warranted whether the expropriation is operative under
that P.D. No. 27 was a special law, as it applied only to particular individuals the CARL or P.D. No. 27, as both laws are keyed into the same governmental
in the State, specifically the tenants of rice and corn lands. Moreover, P.D. regards said objective. Moreover, under both laws, the landowner is entitled to just
No. 27, which covered all rice and corn lands, provides no exemptions based properties? compensation for the properties taken. The twin process of expropriation of
on the manner of acquisition of the land by the landowner. The Order of the lands under agrarian reform and the payment of just compensation is akin to a
DAR Secretary was assailed in a Petition for Certiorari filed with the Court of Whether or not forced sale, which has been aptly described in common law jurisdictions as "sale
Appeals which the latter, the Court of Appeals and hereby, the Court of Act No. 3239 made under the process of the court, and in the mode prescribed by law," and
Appeals affirmed the DAR Secretary's issuance. It sustained the position of was repealed "which is not the voluntary act of the owner, such as to satisfy a debt, whether
the Office of the Solicitor General (OSG) position that Section 4 of Act No. by P.D. No. 27 of a mortgage, judgment, tax lien, etc."
3239 was expressly repealed not only by P.D. No. 27, but also by Republic or Republic Act
Act No. 6657, otherwise known as the Comprehensive Agrarian Reform Law No. 6657? Thus, we can hardly characterize the acquisition of the subject properties from
of 1988, both laws being explicit in mandating the distribution of agricultural the Hospicio for the benefit of the tenants as a sale, within the contemplation of
lands to qualified beneficiaries. The Court of Appeals further noted that the Whether or not Section 4 of Act No. 3239. The transfer arises from compulsion of law, and not
subject lands did not fall among the exemptions provided under Section 10 P.D. No. 1808 the desire of any parties. Even if the Hospicio had voluntarily offered to
of Rep. Act No. 6657. The appellate court brought into play the aims of land impairs the surrender its properties to agrarian reform, the resulting transaction would not
reform, affirming as it did "the need to distribute and create an economic constitutional be considered as a conventional sale, since the obligation is created not out of
equilibrium among the inhabitants of this land, most especially those with guaranty of the mandate of the parties, but the will of the law. Regrettably, the DAR
less privilege in life, our peasant farmer." non- Secretary and the Court of Appeals failed to apply that sound principle,
impairment of preferring to rely instead on the conclusion that Section 4 was repealed by P.D.
obligation No. 27 and the CARL.
contract?
Nonetheless, even assuming for the nonce that Section 4 contemplates even
forced sales such as those through expropriation, we would agree with the DAR
Secretary and the Court of Appeals that Section 4 is deemed repealed by P.D.
No. 27 and the CARL.

The other arguments raised by the Hospicio are similarly bereft of merit. It wants
us to hold that P.D. No. 27 and the CARL, both enacted to implement the
urgently needed policy of agrarian reform, violate the non-impairment of
contracts clause under the Bill of Rights. Yet the broad sweep of this argument
ignores the nuances adopted by this Court in interpreting Section 10 of Article
III. We have held that the State's exercise of police powers may prevail over
obligations imposed by private contracts.

The rationale for holding that the properties of the Hospicio are covered by P.D.
No. 27 and Rep. Act No. 6657 is so well-grounded in law that it obviates any
resort to the sordid game of choosing which of the two competing aspirations is
nobler. The body which would have unquestionable discretion in assigning
hierarchical values on the modalities by which social justice may be
implemented is the legislature. Land reform affords the opportunity for the
landless to break away from the vicious cycle of having to perpetually rely on
the kindness of others. By refusing to exempt properties owned by charitable
institutions or maintained for charitable purposes from agrarian reform, the
legislature has indicated a policy choice which the Court is bound to implement.
HACIENDA During the incumbency of President Corazon Aquino, the comprehensive It is not proper, Just Compensation
LUISITA vs agrarian reform program (CARP) was instituted to cover all agricultural lands. either in law or
PRESIDENTIAL Executive Order No. 229 created the Presidential Agrarian Reform Council in equity, to In Our July 5, 2011 Decision, We stated that HLI shall be paid just compensation
AGRARIAN (PARC) as the highest policy-making body that formulates all policies, rules, reckon the for the remaining agricultural land that will be transferred to DAR for land
REFORM and regulations necessary for the implementation of CARP. payment of just distribution to the FWBs. We also ruled that the date of the taking is November
COUNCIL compensation 21, 1989, when PARC approved HLIs SDP per PARC Resolution No. 89-12-2.
Hacienda Luisita de Tarlac is a 6,443-hectare mixed agricultural-industrial- from november
residential expanse owned by Compaia General de Tabacos de Filipinas 21, 1989 when Despite the above propositions, We maintain that the date of taking is November
(Tabacalera). In 1957, the Spanish sold Hacienda Luisita toTarlac the parc, then 21, 1989, the date when PARC approved HLIs SDP per PARC Resolution No.
Development Corporation (Tadeco), then owned and controlled by the Jose under the 89-12-2, in view of the fact that this is the time that the FWBs were considered
Cojuangco, Sr. Group. The Government Service Insurance System Board of chairmanship to own and possess the agricultural lands in Hacienda Luisita. To be precise,
Trustees extended a loan to Tadecowith the condition that the lots will be of dar these lands became subject of the agrarian reform coverage through the stock
sold at cost to the tenants. secretary distribution scheme only upon the approval of the SDP, that is, November 21,
miriam 1989. Thus, such approval is akin to a notice of coverage ordinarily issued under
On May 7, 1980, the Martial Law administration filed a suit before the Manila defensor- compulsory acquisition. Further, any doubt should be resolved in favor of the
Regional Trial Courtagainst Tadeco for them to surrender Hacienda Luisita santiago, FWBs. As this Court held in Perez-Rosario v. CA:
to the Ministry of Agrarian Reform so that the land can be distributed to approved the
farmers at cost. Tadecoresponded by alleging that Hacienda Luisita does not stock It is an established social and economic fact that the escalation of poverty is the
have tenants and that its sugar lands are not covered by the existing agrarian distribution driving force behind the political disturbances that have in the past compromised
reform programs. plan (sdp) the peace and security of the people as well as the continuity of the national
proposed by order. To subdue these acute disturbances, the legislature over the course of
The Manila RTC rendered judgment ordering Tadeco to surrender Hacienda tadeco/hli, the history of the nation passed a series of laws calculated to accelerate
Luisita to the Ministry of Agrarian Reform. Upon appeal, the CA dismissed because: agrarian reform, ultimately to raise the material standards of living and eliminate
the case that the Marcos government instituted with the condition that a stock discontent. Agrarian reform is a perceived solution to social instability. The
distribution plan must be implemented after such approval shall have been (1) that parc edicts of social justice found in the Constitution and the public policies that
secured. resolution no. underwrite them, the extraordinary national experience, and the prevailing
89-12-2 dated national consciousness, all command the great departments of government to
Section 31 of RA 6657 provides two alternative modalities which are november 21, tilt the balance in favor of the poor and underprivileged whenever reasonable
either land or stock transfer.The stock distribution scheme appeared to be 1989 was not doubt arises in the interpretation of the law. But annexed to the great and sacred
Tadeco’s preferred option. Tadeco organized Hacienda Luisita Incorporation the actual charge of protecting the weak is the diametric function to put every effort to
(HLI) as vehicle to facilitate stock acquisition by the farmworkers- taking of the arrive at an equitable solution for all parties concerned: the jural postulates of
beneficiaries (FWB). It assigned and conveyed to HLI 4,915.75 hectares tadecos/hlis social justice cannot shield illegal acts, nor do they sanction false sympathy
agricultural land portion and other farm-related properties of Hacienda Luisita agricultural towards a certain class, nor yet should they deny justice to the landowner
in exchange for HLI shares of stock. land; whenever truth and justice happen to be on her side. In the occupation of the
legal questions in all agrarian disputes whose outcomes can significantly affect
To accommodate the assets transfer to HLI, it increased its capital stock to (2) the recall or societal harmony, the considerations of social advantage must be weighed, an
400,000,000 shares with par value of PhP 1/share, 150,000,000 of which revocation inquiry into the prevailing social interests is necessary in the adjustment of
were to be issued only to qualified and registered beneficiaries of the CARP, under conflicting demands and expectations of the people, and the social
and the remaining 250,000,000 to any stockholder of the corporation. After resolution no. interdependence of these interests, recognized. (Emphasis supplied.)
deducting the total liabilities of the farm,this translated to 355,531,462 shares 2005-32-01 of
with a par value of PhP 1/shares. that sdp by the The minority contends that it is the date of the notice of coverage, that is,
new parc January 2, 2006, which is determinative of the just compensation HLI is entitled
On May 9, 1989, the Stock Distribution Option Agreement (SDOA) was under the to for its expropriated lands. To support its contention, it cited numerous cases
entered into by Tadeco, HLI, and the 5,848 qualified FWB and attested to by chairmanship where the time of the taking was reckoned on the date of the issuance of the
then DAR Secretary Philip Juico. Included in the distribution plan are of dar notice of coverage.
production-sharing equivalent to three percent of gross sales from the
production of the agricultural land payable to the FWBs in cash dividends or
incentive bonus and distribution of free homelots of not more than 240 square
meters each to family-beneficiaries. The production-sharing is
payable irrespective of whether HLI makes money or not.
On November 21, 1989, PARC, under then Sec. Defensor-Santiago,
approved the SDP of Tadeco and HLI after its claims that the proposed
revisions in the SDP were already included in the amended agreement.
From 1989 to 2005, HLI claimed to have distributed P3,000,000,000 worth
of salaries, wages and fringe benefits, 59 million shares of stock and 240-
square meter homelots to the farmworkers-beneficiaries.
Meanwhile, HLI applied for the conversion of 500 hectares of land of the
hacienda from agricultural to industrial use, pursuant to Sec. 65 of RA 6657.
DAR Sec. Ernesto Garilao, approved the application subject to payment of
three percent of the gross selling price to the FWBs and to HLIs continued
compliance with its undertakings under the SDP.
On December 13, 1996, HLI ceded 300 hectares toCentennary and 200
hectares to Luisita Realty Corporation (LRC). Subsequently, Centennary
sold the entire 300 hectares to Luisita Industrial Park Corporation
(LIPCO). Later on, LIPCO transferred the parcels to the Rizal Commercial
Banking Corporation. Another 80.51 hectares were later detached from the
area coverage of Hacienda Luisita which had been acquired by the
government as part of the Subic-Clark-Tarlac Expresswaycomplex. In
absolute terms, 4,335.75 hectares remained of the original 4,915 hectares
Tadeco ceded to HLI.
HLI Supervisory Groups and AlyansangmgaManggagawangBukidng
Hacienda Luisita filed two separate complaintsalleging that HLI had failed to
give them their dividends, the one percent (1%) share in gross sales and the
thirty-three percent (33%) share in the proceeds of the sale of the converted
500 hectares of land. They claimed that their lives have not improved andalso
cited violations by HLI of the SDOAs terms. They prayed for a renegotiation
of the SDOA, orits revocation.
The DAR constituted a Special Task Force to attend to issues relating to the
SDP. The report indicated that HLI has not complied with its obligations
under RA 6657 despite the implementation of the SDP.DAR Sec.
Pangandaman recommended to the PARC Executive Committee the
revocation of PARC Resolution approving HLI’s SDP and ordered the
acquisition of Hacienda Luisita through the compulsory acquisition scheme.
The DAR Tarlac provincial office issued the Notice of Coverage which HLI
received.
secretary
nasser However, a perusal of the cases cited by the minority would reveal that none of
pangandaman them involved the stock distribution scheme. Thus, said cases do not squarely
on december apply to the instant case. Moreover, it should be noted that it is precisely
22, 2005 or 16 because the stock distribution option is a distinctive mechanism under RA 6657
years earlier that it cannot be treated similarly with that of compulsory land acquisition as
when the sdp these are two (2) different modalities under the agrarian reform program. As We
was approved have stated in Our July 5, 2011 Decision, RA 6657 provides two (2) alternative
did not result in modalities, i.e., land or stock transfer, pursuant to either of which the corporate
actual taking landowner can comply with CARP.
on november
21, 1989; In this regard, it should be noted that when HLI submitted the SDP to DAR for
approval, it cannot be gainsaid that the stock distribution scheme is clearly HLIs
(3) to pay the preferred modality in order to comply with CARP. And when the SDP was
just approved, stocks were given to the FWBs in lieu of land distribution. As aptly
compensation observed by the minority itself, [i]nstead of expropriating lands, what the
as of government took and distributed to the FWBs were shares of stock of petitioner
november 21, HLI in proportion to the value of the agricultural lands that should have been
1989 or 22 expropriated and turned over to the FWBs. It cannot, therefore, be denied that
years back upon the approval of the SDP submitted by HLI, the agricultural lands of
would be Hacienda Luisita became subject of CARP coverage. Evidently, the approval of
arbitrary, the SDP took the place of a notice of coverage issued under compulsory
unjust, and acquisition.
oppressive,
considering the Also, it is surprising that while the minority opines that under the stock
improvements, distribution option, title to the property remains with the corporate landowner,
expenses in which should presumably be dominated by farmers with majority stockholdings
the in the corporation, it still insists that the just compensation that should be given
maintenance to HLI is to be reckoned on January 2, 2006, the date of the issuance of the
and notice of coverage, even after it found that the FWBs did not have the majority
preservation of stockholdings in HLI contrary to the supposed avowed policy of the law. In effect,
the land, and what the minority wants is to prejudice the FWBs twice. Given that the FWBs
rise in land should have had majority stockholdings in HLI but did not, the minority still wants
prices or value the government to pay higher just compensation to HLI. Even if it is the
of the property. government which will pay the just compensation to HLI, this will also affect the
FWBs as they will be paying higher amortizations to the government if the taking
will be considered to have taken place only on January 2, 2006.
The foregoing notwithstanding, it bears stressing that the DAR's land valuation
is only preliminary and is not, by any means, final and conclusive upon the
landowner. The landowner can file an original action with the RTC acting as a
special agrarian court to determine just compensation. The court has the right
to review with finality the determination in the exercise of what is admittedly a
judicial function.

Petitioner Hacienda Luisita, Inc. filed a petition for Certiorari and
Prohibition under Rule 65 to set aside PARC Resolution revoking the SDO
plan and the implementation of the Notice of Coverage.
This Court promulgated a Decisionon July 5, 2011affirming the Presidential
Agrarian Reform Council Resolution of revocation of the SDO plan with the
modification that the original 6,296 qualified farmworker-beneficiaries of
Hacienda Luisita (FWBs) shall have the option to remain as stockholders of
HLI.HLI shall be paid just compensation for the remaining agricultural land
that will be transferred to DAR for land distribution to the FWBs. The date of
the taking is November 21, 1989, when PARC approved HLI’s SDP. The date
of taking is not on May 11, 1989 when the SDOA was executed, since it was
the SDP, not the SDOA, that was approved by PARC.
A view has also been advanced that HLI should pay the qualified FWBs rental
for the use and possession of the land up to the time it surrenders possession
and control over these lands. What this view fails to consider is the fact that the
FWBs are also stockholders of HLI prior to the revocation of PARC Resolution
No. 89-12-2. Also, the income earned by the corporation from its possession
and use of the land ultimately redounded to the benefit of the FWBs based on
its business operations in the form of salaries, benefits voluntarily granted by
HLI and other fringe benefits under their Collective Bargaining Agreement. That
being so, there would be unjust enrichment on the part of the FWBs if HLI will
still be required to pay rent for the use of the land in question.