ASSOCIATION OF SMALL LANDOWNDERS vs DAR

In ancient mythology, Antaeus was a terrible giant who blocked and

challenged Hercules for his life on his way to Mycenae after performing his
eleventh labor. The two wrestled mightily and Hercules flung his adversary to
the ground thinking him dead, but Antaeus rose even stronger to resume
their struggle. This happened several times to Hercules' increasing
amazement. Finally, as they continued grappling, it dawned on Hercules that
Antaeus was the son of Gaea and could never die as long as any part of his
body was touching his Mother Earth. Thus forewarned, Hercules then held
Antaeus up in the air, beyond the reach of the sustaining soil, and crushed
him to death.
Mother Earth. The sustaining soil. The giver of life, without whose
invigorating touch even the powerful Antaeus weakened and died.
The cases before us are not as fanciful as the foregoing tale. But they also
tell of the elemental forces of life and death, of men and women who, like
Antaeus need the sustaining strength of the precious earth to stay alive.

Justice and Human Rights, containing grandiose but undoubtedly sincere

provisions for the uplift of the common people. These include a call in the
following words for the adoption by the State of an agrarian reform program:
SEC. 4. The State shall, by law, undertake an agrarian
reform program founded on the right of farmers and
regular farmworkers, who are landless, to own directly or
collectively the lands they till or, in the case of other
farmworkers, to receive a just share of the fruits thereof.
To this end, the State shall encourage and undertake the
just distribution of all agricultural lands, subject to such
priorities and reasonable retention limits as the Congress
may prescribe, taking into account ecological,
developmental, or equity considerations and subject to the
payment of just compensation. In determining retention
limits, the State shall respect the right of small
landowners. The State shall further provide incentives for
voluntary land-sharing.

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

Earlier, in fact, R.A. No. 3844, otherwise known as the Agricultural Land
Reform Code, had already been enacted by the Congress of the Philippines
on August 8, 1963, in line with the above-stated principles. This was
substantially superseded almost a decade later by P.D. No. 27, which was
promulgated on October 21, 1972, along with martial law, to provide for the
compulsory acquisition of private lands for distribution among tenant-farmers
and to specify maximum retention limits for landowners.

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

social justice to "insure the well-being and economic security of all the
people," 1 especially the less privileged. In 1973, the new Constitution
affirmed this goal adding specifically that "the State shall regulate the
acquisition, ownership, use, enjoyment and disposition of private property
and equitably diffuse property ownership and profits." 2 Significantly, there
was also the specific injunction to "formulate and implement an agrarian
reform program aimed at emancipating the tenant from the bondage of the
soil." 3

The people power revolution of 1986 did not change and indeed even
energized the thrust for agrarian reform. Thus, on July 17, 1987, President
Corazon C. Aquino issued E.O. No. 228, declaring full land ownership in
favor of the beneficiaries of P.D. No. 27 and providing for the valuation of still
unvalued lands covered by the decree as well as the manner of their
payment. This was followed on July 22, 1987 by Presidential Proclamation
No. 131, instituting a comprehensive agrarian reform program (CARP), and
E.O. No. 229, providing the mechanics for its implementation.

The Constitution of 1987 was not to be outdone. Besides echoing these

sentiments, it also adopted one whole and separate Article XIII on Social

Subsequently, with its formal organization, the revived Congress of the

Philippines took over legislative power from the President and started its

own deliberations, including extensive public hearings, on the improvement

of the interests of farmers. The result, after almost a year of spirited debate,
was the enactment of R.A. No. 6657, otherwise known as the
Comprehensive Agrarian Reform Law of 1988, which President Aquino
signed on June 10, 1988. This law, while considerably changing the earlier
mentioned enactments, nevertheless gives them suppletory effect insofar as
they are not inconsistent with its provisions. 4
The above-captioned cases have been consolidated because they involve
common legal questions, including serious challenges to the constitutionality
of the several measures mentioned above. They will be the subject of one
common discussion and resolution, The different antecedents of each case
will require separate treatment, however, and will first be explained
hereunder.
G.R. No. 79777
Squarely raised in this petition is the constitutionality of P.D. No. 27, E.O.
Nos. 228 and 229, and R.A. No. 6657.
The subjects of this petition are a 9-hectare riceland worked by four tenants
and owned by petitioner Nicolas Manaay and his wife and a 5-hectare
riceland worked by four tenants and owned by petitioner Augustin Hermano,
Jr. The tenants were declared full owners of these lands by E.O. No. 228 as
qualified farmers under P.D. No. 27.
The petitioners are questioning P.D. No. 27 and E.O. Nos. 228 and 229 on
grounds inter alia of separation of powers, due process, equal protection and
the constitutional limitation that no private property shall be taken for public
use without just compensation.
They contend that President Aquino usurped legislative power when she
promulgated E.O. No. 228. The said measure is invalid also for violation of
Article XIII, Section 4, of the Constitution, for failure to provide for retention
limits for small landowners. Moreover, it does not conform to Article VI,
Section 25(4) and the other requisites of a valid appropriation.

In connection with the determination of just compensation, the petitioners

argue that the same may be made only by a court of justice and not by the
President of the Philippines. They invoke the recent cases of EPZA v.
Dulay 5and Manotok v. National Food Authority. 6 Moreover, the just
compensation contemplated by the Bill of Rights is payable in money or in
cash and not in the form of bonds or other things of value.
In considering the rentals as advance payment on the land, the executive
order also deprives the petitioners of their property rights as protected by
due process. The equal protection clause is also violated because the order
places the burden of solving the agrarian problems on the owners only of
agricultural lands. No similar obligation is imposed on the owners of other
properties.
The petitioners also maintain that in declaring the beneficiaries under P.D.
No. 27 to be the owners of the lands occupied by them, E.O. No. 228
ignored judicial prerogatives and so violated due process. Worse, the
measure would not solve the agrarian problem because even the small
farmers are deprived of their lands and the retention rights guaranteed by
the Constitution.
In his Comment, the Solicitor General stresses that P.D. No. 27 has already
been upheld in the earlier cases ofChavez v. Zobel, 7 Gonzales v.
Estrella, 8 and Association of Rice and Corn Producers of the Philippines,
Inc. v. The National Land Reform Council. 9 The determination of just
compensation by the executive authorities conformably to the formula
prescribed under the questioned order is at best initial or preliminary only. It
does not foreclose judicial intervention whenever sought or warranted. At
any rate, the challenge to the order is premature because no valuation of
their property has as yet been made by the Department of Agrarian Reform.
The petitioners are also not proper parties because the lands owned by
them do not exceed the maximum retention limit of 7 hectares.
Replying, the petitioners insist they are proper parties because P.D. No. 27
does not provide for retention limits on tenanted lands and that in any event
their petition is a class suit brought in behalf of landowners with landholdings
below 24 hectares. They maintain that the determination of just
compensation by the administrative authorities is a final ascertainment. As

for the cases invoked by the public respondent, the constitutionality of P.D.
No. 27 was merely assumed in Chavez, while what was decided
in Gonzales was the validity of the imposition of martial law.
In the amended petition dated November 22, 1588, it is contended that P.D.
No. 27, E.O. Nos. 228 and 229 (except Sections 20 and 21) have been
impliedly repealed by R.A. No. 6657. Nevertheless, this statute should itself
also be declared unconstitutional because it suffers from substantially the
same infirmities as the earlier measures.
A petition for intervention was filed with leave of court on June 1, 1988 by
Vicente Cruz, owner of a 1. 83- hectare land, who complained that the DAR
was insisting on the implementation of P.D. No. 27 and E.O. No. 228 despite
a compromise agreement he had reached with his tenant on the payment of
rentals. In a subsequent motion dated April 10, 1989, he adopted the
allegations in the basic amended petition that the above- mentioned
enactments have been impliedly repealed by R.A. No. 6657.
G.R. No. 79310
The petitioners herein are landowners and sugar planters in the Victorias Mill
District, Victorias, Negros Occidental. Co-petitioner Planters' Committee, Inc.
is an organization composed of 1,400 planter-members. This petition seeks
to prohibit the implementation of Proc. No. 131 and E.O. No. 229.
The petitioners claim that the power to provide for a Comprehensive
Agrarian Reform Program as decreed by the Constitution belongs to
Congress and not the President. Although they agree that the President
could exercise legislative power until the Congress was convened, she could
do so only to enact emergency measures during the transition period. At
that, even assuming that the interim legislative power of the President was
properly exercised, Proc. No. 131 and E.O. No. 229 would still have to be
annulled for violating the constitutional provisions on just compensation, due
process, and equal protection.
They also argue that under Section 2 of Proc. No. 131 which provides:

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

as the Agrarian Reform Fund, an initial amount of FIFTY BILLION PESOS
(P50,000,000,000.00) to cover the estimated cost of the Comprehensive
Agrarian Reform Program from 1987 to 1992 which shall be sourced from
the receipts of the sale of the assets of the Asset Privatization Trust and
Receipts of sale of ill-gotten wealth received through the Presidential
Commission on Good Government and such other sources as government
may deem appropriate. The amounts collected and accruing to this special
fund shall be considered automatically appropriated for the purpose
authorized in this Proclamation the amount appropriated is in futuro, not in
esse. The money needed to cover the cost of the contemplated
expropriation has yet to be raised and cannot be appropriated at this time.
Furthermore, they contend that taking must be simultaneous with payment of
just compensation as it is traditionally understood, i.e., with money and in
full, but no such payment is contemplated in Section 5 of the E.O. No. 229.
On the contrary, Section 6, thereof provides that the Land Bank of the
Philippines "shall compensate the landowner in an amount to be established
by the government, which shall be based on the owner's declaration of
current fair market value as provided in Section 4 hereof, but subject to
certain controls to be defined and promulgated by the Presidential Agrarian
Reform Council." This compensation may not be paid fully in money but in
any of several modes that may consist of part cash and part bond, with
interest, maturing periodically, or direct payment in cash or bond as may be
mutually agreed upon by the beneficiary and the landowner or as may be
prescribed or approved by the PARC.
The petitioners also argue that in the issuance of the two measures, no effort
was made to make a careful study of the sugar planters' situation. There is
no tenancy problem in the sugar areas that can justify the application of the
CARP to them. To the extent that the sugar planters have been lumped in
the same legislation with other farmers, 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 membership of at
least 20,000 individual sugar planters all over the country. On September 10,

1987, another motion for intervention was filed, this time by Manuel
Barcelona, et al., representing coconut and riceland owners. Both motions
were granted by the Court.
NASP alleges that President Aquino had no authority to fund the Agrarian
Reform Program and that, in any event, the appropriation is invalid because
of uncertainty in the amount appropriated. Section 2 of Proc. No. 131 and
Sections 20 and 21 of E.O. No. 229 provide for an initial appropriation of fifty
billion pesos and thus specifies the minimum rather than the maximum
authorized amount. This is not allowed. Furthermore, the stated initial
amount has not been certified to by the National Treasurer as actually
available.

The public respondent also points out that the constitutional prohibition is
against the payment of public money without the corresponding
appropriation. There is no rule that only money already in existence can be
the subject of an appropriation law. Finally, the earmarking of fifty billion
pesos as Agrarian Reform Fund, although denominated as an initial amount,
is actually the maximum sum appropriated. The word "initial" simply means
that additional amounts may be appropriated later when necessary.
On April 11, 1988, Prudencio Serrano, a coconut planter, filed a petition on
his own behalf, assailing the constitutionality of E.O. No. 229. In addition to
the arguments already raised, Serrano contends that the measure is
unconstitutional because:

Two additional arguments are made by Barcelona, to wit, the failure to

establish by clear and convincing evidence the necessity for the exercise of
the powers of eminent domain, and the violation of the fundamental right to
own property.

(1) Only public lands should be included in the CARP;

The petitioners also decry the penalty for non-registration of the lands, which
is the expropriation of the said land for an amount equal to the government
assessor's valuation of the land for tax purposes. On the other hand, if the
landowner declares his own valuation he is unjustly required to immediately
pay the corresponding taxes on the land, in violation of the uniformity rule.

(3) The power of the President to legislate was terminated

on July 2, 1987; and

In his consolidated Comment, the Solicitor General first invokes the

presumption of constitutionality in favor of Proc. No. 131 and E.O. No. 229.
He also justifies the necessity for the expropriation as explained in the
"whereas" clauses of the Proclamation and submits that, contrary to the
petitioner's contention, a pilot project to determine the feasibility of CARP
and a general survey on the people's opinion thereon are not indispensable
prerequisites to its promulgation.
On the alleged violation of the equal protection clause, the sugar planters
have failed to show that they belong to a different class and should be
differently treated. The Comment also suggests the possibility of Congress
first distributing public agricultural lands and scheduling the expropriation of
private agricultural lands later. From this viewpoint, the petition for prohibition
would be premature.

(2) E.O. No. 229 embraces more than one subject which is
not expressed in the title;

(4) The appropriation of a P50 billion special fund from the

National Treasury did not originate from the House of
Representatives.
G.R. No. 79744
The petitioner alleges that the then Secretary of Department of Agrarian
Reform, in violation of due process and the requirement for just
compensation, placed his landholding under the coverage of Operation Land
Transfer. Certificates of Land Transfer were subsequently issued to the
private respondents, who then refused payment of lease rentals to him.
On September 3, 1986, the petitioner protested the erroneous inclusion of
his small landholding under Operation Land transfer and asked for the recall
and cancellation of the Certificates of Land Transfer in the name of the
private respondents. He claims that on December 24, 1986, his petition was
denied without hearing. On February 17, 1987, he filed a motion for

reconsideration, which had not been acted upon when E.O. Nos. 228 and
229 were issued. These orders rendered his motion moot and academic
because they directly effected the transfer of his land to the private
respondents.

In his Comment, the Solicitor General submits that the petition is premature
because the motion for reconsideration filed with the Minister of Agrarian
Reform is still unresolved. As for the validity of the issuance of E.O. Nos. 228
and 229, he argues that they were enacted pursuant to Section 6, Article
XVIII of the Transitory Provisions of the 1987 Constitution which reads:

The petitioner now argues that:

(1) E.O. Nos. 228 and 229 were invalidly issued by the
President of the Philippines.
(2) The said executive orders are violative of the
constitutional provision that no private property shall be
taken without due process or just compensation.
(3) The petitioner is denied the right of maximum retention
provided for under the 1987 Constitution.
The petitioner contends that the issuance of E.0. Nos. 228 and 229 shortly
before Congress convened is anomalous and arbitrary, besides violating the
doctrine of separation of powers. The legislative power granted to the
President under the Transitory Provisions refers only to emergency
measures that may be promulgated in the proper exercise of the police
power.
The petitioner also invokes his rights not to be deprived of his property
without due process of law and to the retention of his small parcels of
riceholding as guaranteed under Article XIII, Section 4 of the Constitution.
He likewise argues that, besides denying him just compensation for his land,
the provisions of E.O. No. 228 declaring that:
Lease rentals paid to the landowner by the farmerbeneficiary after October 21, 1972 shall be considered as
advance payment for the land.
is an unconstitutional taking of a vested property right. It is also his
contention that the inclusion of even small landowners in the program along
with other landowners with lands consisting of seven hectares or more is
undemocratic.

The incumbent president shall continue to exercise legislative powers until

the first Congress is convened.
On the issue of just compensation, his position is that when P.D. No. 27 was
promulgated on October 21. 1972, the tenant-farmer of agricultural land was
deemed the owner of the land he was tilling. The leasehold rentals paid after
that date should therefore be considered amortization payments.
In his Reply to the public respondents, the petitioner maintains that the
motion he filed was resolved on December 14, 1987. An appeal to the Office
of the President would be useless with the promulgation of E.O. Nos. 228
and 229, which in effect sanctioned the validity of the public respondent's
acts.
G.R. No. 78742
The petitioners in this case invoke the right of retention granted by P.D. No.
27 to owners of rice and corn lands not exceeding seven hectares as long as
they are cultivating or intend to cultivate the same. Their respective lands do
not exceed the statutory limit but are occupied by tenants who are actually
cultivating such lands.
According to P.D. No. 316, which was promulgated in implementation of P.D.
No. 27:
No tenant-farmer in agricultural lands primarily devoted to
rice and corn shall be ejected or removed from his
farmholding until such time as the respective rights of the
tenant- farmers and the landowner shall have been
determined in accordance with the rules and regulations
implementing P.D. No. 27.

The petitioners claim they cannot eject their tenants and so are unable to
enjoy their right of retention because the Department of Agrarian Reform has
so far not issued the implementing rules required under the above-quoted
decree. They therefore ask the Court for a writ of mandamus to compel the
respondent to issue the said rules.
In his Comment, the public respondent argues that P.D. No. 27 has been
amended by LOI 474 removing any right of retention from persons who own
other agricultural lands of more than 7 hectares in aggregate area or lands
used for residential, commercial, industrial or other purposes from which
they derive adequate income for their family. And even assuming that the
petitioners do not fall under its terms, the regulations implementing P.D. No.
27 have already been issued, to wit, the Memorandum dated July 10, 1975
(Interim Guidelines on Retention by Small Landowners, with an
accompanying Retention Guide Table), Memorandum Circular No. 11 dated
April 21, 1978, (Implementation Guidelines of LOI No. 474), Memorandum
Circular No. 18-81 dated December 29,1981 (Clarificatory Guidelines on
Coverage of P.D. No. 27 and Retention by Small Landowners), and DAR
Administrative Order No. 1, series of 1985 (Providing for a Cut-off Date for
Landowners to Apply for Retention and/or to Protest the Coverage of their
Landholdings under Operation Land Transfer pursuant to P.D. No. 27). For
failure to file the corresponding applications for retention under these
measures, the petitioners are now barred from invoking this right.
The public respondent also stresses that the petitioners have prematurely
initiated this case notwithstanding the pendency of their appeal to the
President of the Philippines. Moreover, the issuance of the implementing
rules, assuming this has not yet been done, involves the exercise of
discretion which cannot be controlled through the writ of mandamus. This is
especially true if this function is entrusted, as in this case, to a separate
department of the government.
In their Reply, the petitioners insist that the above-cited measures are not
applicable to them because they do not own more than seven hectares of
agricultural land. Moreover, assuming arguendo that the rules were intended
to cover them also, the said measures are nevertheless not in force because
they have not been published as required by law and the ruling of this Court
in Tanada v. Tuvera. 10 As for LOI 474, the same is ineffective for the

additional reason that a mere letter of instruction could not have repealed
the presidential decree.
I
Although holding neither purse nor sword and so regarded as the weakest of
the three departments of the government, the judiciary is nonetheless vested
with the power to annul the acts of either the legislative or the executive or of
both when not conformable to the fundamental law. This is the reason for
what some quarters call the doctrine of judicial supremacy. Even so, this
power is not lightly assumed or readily exercised. The doctrine of separation
of powers imposes upon the courts a proper restraint, born of the nature of
their functions and of their respect for the other departments, in striking
down the acts of the legislative and the executive as unconstitutional. The
policy, indeed, is a blend of courtesy and caution. To doubt is to sustain. The
theory is that before the act was done or the law was enacted, earnest
studies were made by Congress or the President, or both, to insure that the
Constitution would not be breached.
In addition, the Constitution itself lays down stringent conditions for a
declaration of unconstitutionality, requiring therefor the concurrence of a
majority of the members of the Supreme Court who took part in the
deliberations and voted on the issue during their session en banc. 11 And as
established by judge made doctrine, the Court will assume jurisdiction over a
constitutional question only if it is shown that the essential requisites of a
judicial inquiry into such a question are first satisfied. Thus, there must be an
actual case or controversy involving a conflict of legal rights susceptible of
judicial determination, the constitutional question must have been
opportunely raised by the proper party, and the resolution of the question is
unavoidably necessary to the decision of the case itself. 12
With particular regard to the requirement of proper party as applied in the
cases before us, we hold that the same is satisfied by the petitioners and
intervenors because each of them has sustained or is in danger of
sustaining an immediate injury as a result of the acts or measures
complained of. 13 And even if, strictly speaking, they are not covered by the
definition, it is still within the wide discretion of the Court to waive the

requirement and so remove the impediment to its addressing and resolving

the serious constitutional questions raised.
In the first Emergency Powers Cases, 14 ordinary citizens and taxpayers
were allowed to question the constitutionality of several executive orders
issued by President Quirino although they were invoking only an indirect and
general interest shared in common with the public. The Court dismissed the
objection that they were not proper parties and ruled that "the transcendental
importance to the public of these cases demands that they be settled
promptly and definitely, brushing aside, if we must, technicalities of
procedure." We have since then applied this exception in many other
cases. 15
The other above-mentioned requisites have also been met in the present
petitions.
In must be stressed that despite the inhibitions pressing upon the Court
when confronted with constitutional issues like the ones now before it, it will
not hesitate to declare a law or act invalid when it is convinced that this must
be done. In arriving at this conclusion, its only criterion will be the
Constitution as God and its conscience give it the light to probe its meaning
and discover its purpose. Personal motives and political considerations are
irrelevancies that cannot influence its decision. Blandishment is as
ineffectual as intimidation.
For all the awesome power of the Congress and the Executive, the Court will
not hesitate to "make the hammer fall, and heavily," to use Justice Laurel's
pithy language, where the acts of these departments, or of any public official,
betray the people's will as expressed in the Constitution.
It need only be added, to borrow again the words of Justice Laurel, that
... when the judiciary mediates to allocate constitutional
boundaries, it does not assert any superiority over the
other departments; it does not in reality nullify or invalidate
an act of the Legislature, but only asserts the solemn and
sacred obligation assigned to it by the Constitution to
determine conflicting claims of authority under the

Constitution and to establish for the parties in an actual

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

specifically provided that they shall be suppletory to R.A. No. 6657 whenever
not inconsistent with its provisions. 17 Indeed, some portions of the said
measures, like the creation of the P50 billion fund in Section 2 of Proc. No.
131, and Sections 20 and 21 of E.O. No. 229, have been incorporated by
reference in the CARP Law.18
That fund, as earlier noted, is itself being questioned on the ground that it
does not conform to the requirements of a valid appropriation as specified in
the Constitution. Clearly, however, Proc. No. 131 is not an appropriation
measure even if it does provide for the creation of said fund, for that is not its
principal purpose. An appropriation law is one the primary and specific
purpose of which is to authorize the release of public funds from the
treasury.19 The creation of the fund is only incidental to the main objective of
the proclamation, which is agrarian reform.
It should follow that the specific constitutional provisions invoked, to wit,
Section 24 and Section 25(4) of Article VI, are not applicable. With particular
reference to Section 24, this obviously could not have been complied with for
the simple reason that the House of Representatives, which now has the
exclusive power to initiate appropriation measures, had not yet been
convened when the proclamation was issued. The legislative power was
then solely vested in the President of the Philippines, who embodied, as it
were, both houses of Congress.
The argument of some of the petitioners that Proc. No. 131 and E.O. No.
229 should be invalidated because they do not provide for retention limits as
required by Article XIII, Section 4 of the Constitution is no longer tenable.
R.A. No. 6657 does provide for such limits now in Section 6 of the law, which
in fact is one of its most controversial provisions. This section declares:
Retention Limits. Except as otherwise provided in this
Act, no person may own or retain, directly or indirectly, any
public or private agricultural land, the size of which shall
vary according to factors governing a viable family-sized
farm, such as commodity produced, terrain, infrastructure,
and soil fertility as determined by the Presidential Agrarian
Reform Council (PARC) created hereunder, but in no case
shall retention by the landowner exceed five (5) hectares.

Three (3) hectares may be awarded to each child of the

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

That is true as a general proposition but is subject to one important

qualification. Correctly and categorically stated, the rule is that mandamus
will lie to compel the discharge of the discretionary duty itself but not to
control the discretion to be exercised. In other words, mandamus can issue
to require action only but not specific action.
Whenever a duty is imposed upon a public official and an
unnecessary and unreasonable delay in the exercise of
such duty occurs, if it is a clear duty imposed by law, the
courts will intervene by the extraordinary legal remedy of
mandamus to compel action. If the duty is purely
ministerial, the courts will require specific action. If the
duty is purely discretionary, the courts by mandamus will
require action only. For example, if an inferior court, public
official, or board should, for an unreasonable length of
time, fail to decide a particular question to the great
detriment of all parties concerned, or a court should refuse
to take jurisdiction of a cause when the law clearly gave it
jurisdiction mandamus will issue, in the first case to
require a decision, and in the second to require that
jurisdiction be taken of the cause. 22
And while it is true that as a rule the writ will not be proper as long as there is
still a plain, speedy and adequate remedy available from the administrative
authorities, resort to the courts may still be permitted if the issue raised is a
question of law. 23
III
There are traditional distinctions between the police power and the power of
eminent domain that logically preclude the application of both powers at the
same time on the same subject. In the case of City of Baguio v.
NAWASA, 24 for example, where a law required the transfer of all municipal
waterworks systems to the NAWASA in exchange for its assets of equivalent
value, the Court held that the power being exercised was eminent domain
because the property involved was wholesome and intended for a public
use. Property condemned under the police power is noxious or intended for
a noxious purpose, such as a building on the verge of collapse, which should

be demolished for the public safety, or obscene materials, which should be

destroyed in the interest of public morals. The confiscation of such property
is not compensable, unlike the taking of property under the power of
expropriation, which requires the payment of just compensation to the
owner.
In the case of Pennsylvania Coal Co. v. Mahon, 25 Justice Holmes laid down
the limits of the police power in a famous aphorism: "The general rule at
least is that while property may be regulated to a certain extent, if regulation
goes too far it will be recognized as a taking." The regulation that went "too
far" was a law prohibiting mining which might cause the subsidence of
structures for human habitation constructed on the land surface. This was
resisted by a coal company which had earlier granted a deed to the land
over its mine but reserved all mining rights thereunder, with the grantee
assuming all risks and waiving any damage claim. The Court held the law
could not be sustained without compensating the grantor. Justice Brandeis
filed a lone dissent in which he argued that there was a valid exercise of the
police power. He said:
Every restriction upon the use of property imposed in the
exercise of the police power deprives the owner of some
right theretofore enjoyed, and is, in that sense, an
abridgment by the State of rights in property without
making compensation. But restriction imposed to protect
the public health, safety or morals from dangers
threatened is not a taking. The restriction here in question
is merely the prohibition of a noxious use. The property so
restricted remains in the possession of its owner. The
state does not appropriate it or make any use of it. The
state merely prevents the owner from making a use which
interferes with paramount rights of the public. Whenever
the use prohibited ceases to be noxious as it may
because of further changes in local or social conditions
the restriction will have to be removed and the owner will
again be free to enjoy his property as heretofore.
Recent trends, however, would indicate not a polarization but a mingling of
the police power and the power of eminent domain, with the latter being

used as an implement of the former like the power of taxation. The

employment of the taxing power to achieve a police purpose has long been
accepted. 26 As for the power of expropriation, Prof. John J. Costonis of the
University of Illinois College of Law (referring to the earlier case of Euclid v.
Ambler Realty Co., 272 US 365, which sustained a zoning law under the
police power) makes the following significant remarks:
Euclid, moreover, was decided in an era when judges
located the Police and eminent domain powers on
different planets. Generally speaking, they viewed eminent
domain as encompassing public acquisition of private
property for improvements that would be available for
public use," literally construed. To the police power, on the
other hand, they assigned the less intrusive task of
preventing harmful externalities a point reflected in the
Euclid opinion's reliance on an analogy to nuisance law to
bolster its support of zoning. So long as suppression of a
privately authored harm bore a plausible relation to some
legitimate "public purpose," the pertinent measure need
have afforded no compensation whatever. With the
progressive growth of government's involvement in land
use, the distance between the two powers has contracted
considerably. Today government often employs eminent
domain interchangeably with or as a useful complement to
the police power-- a trend expressly approved in the
Supreme Court's 1954 decision in Berman v. Parker,
which broadened the reach of eminent domain's "public
use" test to match that of the police power's standard of
"public purpose." 27
The Berman case sustained a redevelopment project and the improvement
of blighted areas in the District of Columbia as a proper exercise of the
police power. On the role of eminent domain in the attainment of this
purpose, Justice Douglas declared:
If those who govern the District of Columbia decide that
the Nation's Capital should be beautiful as well as sanitary,

there is nothing in the Fifth Amendment that stands in the

way.
Once the object is within the authority of Congress, the
right to realize it through the exercise of eminent domain is
clear.
For the power of eminent domain is merely the means to
the end. 28
In Penn Central Transportation Co. v. New York City, 29 decided by a 6-3 vote
in 1978, the U.S Supreme Court sustained the respondent's Landmarks
Preservation Law under which the owners of the Grand Central Terminal had
not been allowed to construct a multi-story office building over the Terminal,
which had been designated a historic landmark. Preservation of the
landmark was held to be a valid objective of the police power. The problem,
however, was that the owners of the Terminal would be deprived of the right
to use the airspace above it although other landowners in the area could do
so over their respective properties. While insisting that there was here no
taking, the Court nonetheless recognized certain compensatory rights
accruing to Grand Central Terminal which it said would "undoubtedly
mitigate" the loss caused by the regulation. This "fair compensation," as he
called it, was explained by Prof. Costonis in this wise:
In return for retaining the Terminal site in its pristine landmark status, Penn
Central was authorized to transfer to neighboring properties the authorized
but unused rights accruing to the site prior to the Terminal's designation as a
landmark the rights which would have been exhausted by the 59-story
building that the city refused to countenance atop the Terminal. Prevailing
bulk restrictions on neighboring sites were proportionately relaxed,
theoretically enabling Penn Central to recoup its losses at the Terminal site
by constructing or selling to others the right to construct larger, hence more
profitable buildings on the transferee sites. 30
The cases before us present no knotty complication insofar as the question
of compensable taking is concerned. To the extent that the measures under
challenge merely prescribe retention limits for landowners, there is an
exercise of the police power for the regulation of private property in

accordance with the Constitution. But where, to carry out such regulation, it
becomes necessary to deprive such owners of whatever lands they may
own in excess of the maximum area allowed, there is definitely a taking
under the power of eminent domain for which payment of just compensation
is imperative. The taking contemplated is not a mere limitation of the use of
the land. What is required is the surrender of the title to and the physical
possession of the said excess and all beneficial rights accruing to the owner
in favor of the farmer-beneficiary. This is definitely an exercise not of the
police power but of the power of eminent domain.
Whether as an exercise of the police power or of the power of eminent
domain, the several measures before us are challenged as violative of the
due process and equal protection clauses.
The challenge to Proc. No. 131 and E.O. Nos. 228 and 299 on the ground
that no retention limits are prescribed has already been discussed and
dismissed. It is noted that although they excited many bitter exchanges
during the deliberation of the CARP Law in Congress, the retention limits
finally agreed upon are, curiously enough, not being questioned in these
petitions. We therefore do not discuss them here. The Court will come to the
other claimed violations of due process in connection with our examination
of the adequacy of just compensation as required under the power of
expropriation.
The argument of the small farmers that they have been denied equal
protection because of the absence of retention limits has also become
academic under Section 6 of R.A. No. 6657. Significantly, they too have not
questioned the area of such limits. There is also the complaint that they
should not be made to share the burden of agrarian reform, an objection
also made by the sugar planters on the ground that they belong to a
particular class with particular interests of their own. However, no evidence
has been submitted to the Court that the requisites of a valid classification
have been violated.
Classification has been defined as the grouping of persons or things similar
to each other in certain particulars and different from each other in these
same particulars. 31 To be valid, it must conform to the following
requirements: (1) it must be based on substantial distinctions; (2) it must be

germane to the purposes of the law; (3) it must not be limited to existing
conditions only; and (4) it must apply equally to all the members of the
class. 32 The Court finds that all these requisites have been met by the
measures here challenged as arbitrary and discriminatory.
Equal protection simply means that all persons or things similarly situated
must be treated alike both as to the rights conferred and the liabilities
imposed. 33 The petitioners have not shown that they belong to a different
class and entitled to a different treatment. The argument that not only
landowners but also owners of other properties must be made to share the
burden of implementing land reform must be rejected. There is a substantial
distinction between these two classes of owners that is clearly visible except
to those who will not see. There is no need to elaborate on this matter. In
any event, the Congress is allowed a wide leeway in providing for a valid
classification. Its decision is accorded recognition and respect by the courts
of justice except only where its discretion is abused to the detriment of the
Bill of Rights.
It is worth remarking at this juncture that a statute may be sustained under
the police power only if there is a concurrence of the lawful subject and the
lawful method. Put otherwise, the interests of the public generally as
distinguished from those of a particular class require the interference of the
State and, no less important, the means employed are reasonably
necessary for the attainment of the purpose sought to be achieved and not
unduly oppressive upon individuals. 34 As the subject and purpose of
agrarian reform have been laid down by the Constitution itself, we may say
that the first requirement has been satisfied. What remains to be examined
is the validity of the method employed to achieve the constitutional goal.
One of the basic principles of the democratic system is that where the rights
of the individual are concerned, the end does not justify the means. It is not
enough that there be a valid objective; it is also necessary that the means
employed to pursue it be in keeping with the Constitution. Mere expediency
will not excuse constitutional shortcuts. There is no question that not even
the strongest moral conviction or the most urgent public need, subject only
to a few notable exceptions, will excuse the bypassing of an individual's
rights. It is no exaggeration to say that a, person invoking a right guaranteed

under Article III of the Constitution is a majority of one even as against the
rest of the nation who would deny him that right.
That right covers the person's life, his liberty and his property under Section
1 of Article III of the Constitution. With regard to his property, the owner
enjoys the added protection of Section 9, which reaffirms the familiar rule
that private property shall not be taken for public use without just
compensation.
This brings us now to the power of eminent domain.
IV
Eminent domain is an inherent power of the State that
enables it to forcibly acquire private lands intended for
public use upon payment of just compensation to the
owner. Obviously, there is no need to expropriate where
the owner is willing to sell under terms also acceptable to
the purchaser, in which case an ordinary deed of sale may
be agreed upon by the parties. 35 It is only where the
owner is unwilling to sell, or cannot accept the price or
other conditions offered by the vendee, that the power of
eminent domain will come into play to assert the
paramount authority of the State over the interests of the
property owner. Private rights must then yield to the
irresistible demands of the public interest on the timehonored justification, as in the case of the police power,
that the welfare of the people is the supreme law.
But for all its primacy and urgency, the power of expropriation is by no
means absolute (as indeed no power is absolute). The limitation is found in
the constitutional injunction that "private property shall not be taken for public
use without just compensation" and in the abundant jurisprudence that has
evolved from the interpretation of this principle. Basically, the requirements
for a proper exercise of the power are: (1) public use and (2) just
compensation.

Let us dispose first of the argument raised by the petitioners in G.R. No.
79310 that the State should first distribute public agricultural lands in the
pursuit of agrarian reform instead of immediately disturbing property rights
by forcibly acquiring private agricultural lands. Parenthetically, it is not
correct to say that only public agricultural lands may be covered by the
CARP as the Constitution calls for "the just distribution of all agricultural
lands." In any event, the decision to redistribute private agricultural lands in
the manner prescribed by the CARP was made by the legislative and
executive departments in the exercise of their discretion. We are not justified
in reviewing that discretion in the absence of a clear showing that it has
been abused.
A becoming courtesy admonishes us to respect the decisions of the political
departments when they decide what is known as the political question. As
explained by Chief Justice Concepcion in the case of Taada v. Cuenco: 36
The term "political question" connotes what it means in
ordinary parlance, namely, a question of policy. It refers to
"those questions which, under the Constitution, are to be
decided by the people in their sovereign capacity; or in
regard to which full discretionary authority has been
delegated to the legislative or executive branch of the
government." It is concerned with issues dependent upon
the wisdom, not legality, of a particular measure.
It is true that the concept of the political question has been constricted with
the enlargement of judicial power, which now includes the authority of the
courts "to determine whether or not there has been a grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of any
branch or instrumentality of the Government." 37 Even so, this should not be
construed as a license for us to reverse the other departments simply
because their views may not coincide with ours.
The legislature and the executive have been seen fit, in their wisdom, to
include in the CARP the redistribution of private landholdings (even as the
distribution of public agricultural lands is first provided for, while also
continuing apace under the Public Land Act and other cognate laws). The
Court sees no justification to interpose its authority, which we may assert

only if we believe that the political decision is not unwise, but illegal. We do
not find it to be so.
In U.S. v. Chandler-Dunbar Water Power Company, 38 it was held:
Congress having determined, as it did by the Act of March
3,1909 that the entire St. Mary's river between the
American bank and the international line, as well as all of
the upland north of the present ship canal, throughout its
entire length, was "necessary for the purpose of navigation
of said waters, and the waters connected therewith," that
determination is conclusive in condemnation proceedings
instituted by the United States under that Act, and there is
no room for judicial review of the judgment of
Congress ... .
As earlier observed, the requirement for public use has already been settled
for us by the Constitution itself No less than the 1987 Charter calls for
agrarian reform, which is the reason why private agricultural lands are to be
taken from their owners, subject to the prescribed maximum retention limits.
The purposes specified in P.D. No. 27, Proc. No. 131 and R.A. No. 6657 are
only an elaboration of the constitutional injunction that the State adopt the
necessary measures "to encourage and undertake the just distribution of all
agricultural lands to enable farmers who are landless to own directly or
collectively the lands they till." That public use, as pronounced by the
fundamental law itself, must be binding on us.
The second requirement, i.e., the payment of just compensation, needs a
longer and more thoughtful examination.
Just compensation is defined as the full and fair equivalent of the property
taken from its owner by the expropriator. 39 It has been repeatedly stressed
by this Court that the measure is not the taker's gain but the owner's
loss.40 The word "just" is used to intensify the meaning of the word
"compensation" to convey the idea that the equivalent to be rendered for the
property to be taken shall be real, substantial, full, ample. 41

It bears repeating that the measures challenged in these petitions

contemplate more than a mere regulation of the use of private lands under
the police power. We deal here with an actual taking of private agricultural
lands that has dispossessed the owners of their property and deprived them
of all its beneficial use and enjoyment, to entitle them to the just
compensation mandated by the Constitution.
As held in Republic of the Philippines v. Castellvi, 42 there is compensable
taking when the following conditions concur: (1) the expropriator must enter
a private property; (2) the entry must be for more than a momentary period;
(3) the entry must be under warrant or color of legal authority; (4) the
property must be devoted to public use or otherwise informally appropriated
or injuriously affected; and (5) the utilization of the property for public use
must be in such a way as to oust the owner and deprive him of beneficial
enjoyment of the property. All these requisites are envisioned in the
measures before us.
Where the State itself is the expropriator, it is not necessary for it to make a
deposit upon its taking possession of the condemned property, as "the
compensation is a public charge, the good faith of the public is pledged for
its payment, and all the resources of taxation may be employed in raising the
amount." 43 Nevertheless, Section 16(e) of the CARP Law provides that:
Upon receipt by the landowner of the corresponding
payment or, in case of rejection or no response from the
landowner, upon the deposit with an accessible bank
designated by the DAR of the compensation in cash or in
LBP bonds in accordance with this Act, the DAR shall take
immediate possession of the land and shall request the
proper Register of Deeds to issue a Transfer Certificate of
Title (TCT) in the name of the Republic of the Philippines.
The DAR shall thereafter proceed with the redistribution of
the land to the qualified beneficiaries.
Objection is raised, however, to the manner of fixing the just compensation,
which it is claimed is entrusted to the administrative authorities in violation of
judicial prerogatives. Specific reference is made to Section 16(d), which

provides that in case of the rejection or disregard by the owner of the offer of
the government to buy his land-

judicial proceeding was not had before the actual taking.

However, the strict application of the decrees during the
proceedings would be nothing short of a mere formality or
charade as the court has only to choose between the
valuation of the owner and that of the assessor, and its
choice is always limited to the lower of the two. The court
cannot exercise its discretion or independence in
determining what is just or fair. Even a grade school pupil
could substitute for the judge insofar as the determination
of constitutional just compensation is concerned.

... the DAR shall conduct summary administrative

proceedings to determine the compensation for the land
by requiring the landowner, the LBP and other interested
parties to submit evidence as to the just compensation for
the land, within fifteen (15) days from the receipt of the
notice. After the expiration of the above period, the matter
is deemed submitted for decision. The DAR shall decide
the case within thirty (30) days after it is submitted for
decision.

xxx

To be sure, the determination of just compensation is a function addressed

to the courts of justice and may not be usurped by any other branch or
official of the government. EPZA v. Dulay 44 resolved a challenge to several
decrees promulgated by President Marcos providing that the just
compensation for property under expropriation should be either the
assessment of the property by the government or the sworn valuation
thereof by the owner, whichever was lower. In declaring these decrees
unconstitutional, the Court held through Mr. Justice Hugo E. Gutierrez, Jr.:

In the present petition, we are once again confronted with

the same question of whether the courts under P.D. No.
1533, which contains the same provision on just
compensation as its predecessor decrees, still have the
power and authority to determine just compensation,
independent of what is stated by the decree and to this
effect, to appoint commissioners for such purpose.
This time, we answer in the affirmative.

The method of ascertaining just compensation under the

aforecited decrees constitutes impermissible
encroachment on judicial prerogatives. It tends to render
this Court inutile in a matter which under this Constitution
is reserved to it for final determination.
Thus, although in an expropriation proceeding the court
technically would still have the power to determine the just
compensation for the property, following the applicable
decrees, its task would be relegated to simply stating the
lower value of the property as declared either by the
owner or the assessor. As a necessary consequence, it
would be useless for the court to appoint commissioners
under Rule 67 of the Rules of Court. Moreover, the need
to satisfy the due process clause in the taking of private
property is seemingly fulfilled since it cannot be said that a

xxx
It is violative of due process to deny the owner the
opportunity to prove that the valuation in the tax
documents is unfair or wrong. And it is repulsive to the
basic concepts of justice and fairness to allow the
haphazard work of a minor bureaucrat or clerk to
absolutely prevail over the judgment of a court
promulgated only after expert commissioners have
actually viewed the property, after evidence and
arguments pro and con have been presented, and after all
factors and considerations essential to a fair and just
determination have been judiciously evaluated.

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

(a) For lands above

fifty (50) hectares,
insofar as the excess
hectarage is
concerned Twentyfive percent (25%)
cash, the balance to
be paid in government
financial instruments
negotiable at any
time.
(b) For lands above
twenty-four (24)
hectares and up to
fifty (50) hectares
Thirty percent (30%)
cash, the balance to
be paid in government
financial instruments
negotiable at any
time.
(c) For lands twentyfour (24) hectares and
below Thirty-five
percent (35%) cash,
the balance to be paid
in government
financial instruments
negotiable at any
time.
(2) Shares of stock in government-owned or controlled
corporations, LBP preferred shares, physical assets or
other qualified investments in accordance with guidelines
set by the PARC;

(3) Tax credits which can be used against any tax liability;
(4) LBP bonds, which shall have the following features:
(a) Market interest
rates aligned with 91day treasury bill rates.
Ten percent (10%) of
the face value of the
bonds shall mature
every year from the
date of issuance until
the tenth (10th) year:
Provided, That should
the landowner choose
to forego the cash
portion, whether in full
or in part, he shall be
paid correspondingly
in LBP bonds;
(b) Transferability and
negotiability. Such
LBP bonds may be
used by the
landowner, his
successors-ininterest or his assigns,
up to the amount of
their face value, for
any of the following:
(i) Acquisition of land
or other real
properties of the
government, including
assets under the
Asset Privatization

Program and other

assets foreclosed by
government financial
institutions in the
same province or
region where the
lands for which the
bonds were paid are
situated;
(ii) Acquisition of
shares of stock of
government-owned or
controlled
corporations or shares
of stock owned by the
government in private
corporations;
(iii) Substitution for
surety or bail bonds
for the provisional
release of accused
persons, or for
performance bonds;
(iv) Security for loans
with any government
financial institution,
provided the proceeds
of the loans shall be
invested in an
economic enterprise,
preferably in a small
and medium- scale
industry, in the same
province or region as

the land for which the

bonds are paid;

from time to time

allow.

(v) Payment for

various taxes and
fees to government:
Provided, That the
use of these bonds for
these purposes will be
limited to a certain
percentage of the
outstanding balance
of the financial
instruments; Provided,
further, That the
PARC shall determine
the percentages
mentioned above;

The contention of the petitioners in G.R. No. 79777 is that the above
provision is unconstitutional insofar as it requires the owners of the
expropriated properties to accept just compensation therefor in less than
money, which is the only medium of payment allowed. In support of this
contention, they cite jurisprudence holding that:

(vi) Payment for

tuition fees of the
immediate family of
the original
bondholder in
government
universities, colleges,
trade schools, and
other institutions;

In J.M. Tuazon Co. v. Land Tenure Administration, 46 this Court held:

(vii) Payment for fees

of the immediate
family of the original
bondholder in
government hospitals;
and
(viii) Such other uses
as the PARC may

The fundamental rule in expropriation matters is that the

owner of the property expropriated is entitled to a just
compensation, which should be neither more nor less,
whenever it is possible to make the assessment, than the
money equivalent of said property. Just compensation has
always been understood to be the just and complete
equivalent of the loss which the owner of the thing
expropriated has to suffer by reason of the
expropriation . 45 (Emphasis supplied.)

It is well-settled that just compensation means the

equivalent for the value of the property at the time of its
taking. Anything beyond that is more, and anything short
of that is less, than just compensation. It means a fair and
full equivalent for the loss sustained, which is the measure
of the indemnity, not whatever gain would accrue to the
expropriating entity. The market value of the land taken is
the just compensation to which the owner of condemned
property is entitled, the market value being that sum of
money which a person desirous, but not compelled to buy,
and an owner, willing, but not compelled to sell, would
agree on as a price to be given and received for such
property. (Emphasis supplied.)
In the United States, where much of our jurisprudence on the subject has
been derived, the weight of authority is also to the effect that just

compensation for property expropriated is payable only in money and not

otherwise. Thus
The medium of payment of compensation is ready money
or cash. The condemnor cannot compel the owner to
accept anything but money, nor can the owner compel or
require the condemnor to pay him on any other basis than
the value of the property in money at the time and in the
manner prescribed by the Constitution and the statutes.
When the power of eminent domain is resorted to, there
must be a standard medium of payment, binding upon
both parties, and the law has fixed that standard as money
in cash. 47 (Emphasis supplied.)
Part cash and deferred payments are not and cannot, in
the nature of things, be regarded as a reliable and
constant standard of compensation. 48
"Just compensation" for property taken by condemnation
means a fair equivalent in money, which must be paid at
least within a reasonable time after the taking, and it is not
within the power of the Legislature to substitute for such
payment future obligations, bonds, or other valuable
advantage. 49 (Emphasis supplied.)
It cannot be denied from these cases that the traditional medium for the
payment of just compensation is money and no other. And so, conformably,
has just compensation been paid in the past solely in that medium. However,
we do not deal here with the traditional excercise of the power of eminent
domain. This is not an ordinary expropriation where only a specific property
of relatively limited area is sought to be taken by the State from its owner for
a specific and perhaps local purpose.
What we deal with here is a revolutionary kind of expropriation.
The expropriation before us affects all private agricultural lands whenever
found and of whatever kind as long as they are in excess of the maximum
retention limits allowed their owners. This kind of expropriation is intended

for the benefit not only of a particular community or of a small segment of the
population but of the entire Filipino nation, from all levels of our society, from
the impoverished farmer to the land-glutted owner. Its purpose does not
cover only the whole territory of this country but goes beyond in time to the
foreseeable future, which it hopes to secure and edify with the vision and the
sacrifice of the present generation of Filipinos. Generations yet to come are
as involved in this program as we are today, although hopefully only as
beneficiaries of a richer and more fulfilling life we will guarantee to them
tomorrow through our thoughtfulness today. And, finally, let it not be forgotten
that it is no less than the Constitution itself that has ordained this revolution
in the farms, calling for "a just distribution" among the farmers of lands that
have heretofore been the prison of their dreams but can now become the
key at least to their deliverance.
Such a program will involve not mere millions of pesos. The cost will be
tremendous. Considering the vast areas of land subject to expropriation
under the laws before us, we estimate that hundreds of billions of pesos will
be needed, far more indeed than the amount of P50 billion initially
appropriated, which is already staggering as it is by our present standards.
Such amount is in fact not even fully available at this time.
We assume that the framers of the Constitution were aware of this difficulty
when they called for agrarian reform as a top priority project of the
government. It is a part of this assumption that when they envisioned the
expropriation that would be needed, they also intended that the just
compensation would have to be paid not in the orthodox way but a less
conventional if more practical method. There can be no doubt that they were
aware of the financial limitations of the government and had no illusions that
there would be enough money to pay in cash and in full for the lands they
wanted to be distributed among the farmers. We may therefore assume that
their intention was to allow such manner of payment as is now provided for
by the CARP Law, particularly the payment of the balance (if the owner
cannot be paid fully with money), or indeed of the entire amount of the just
compensation, with other things of value. We may also suppose that what
they had in mind was a similar scheme of payment as that prescribed in P.D.
No. 27, which was the law in force at the time they deliberated on the new
Charter and with which they presumably agreed in principle.

The Court has not found in the records of the Constitutional Commission any
categorical agreement among the members regarding the meaning to be
given the concept of just compensation as applied to the comprehensive
agrarian reform program being contemplated. There was the suggestion to
"fine tune" the requirement to suit the demands of the project even as it was
also felt that they should "leave it to Congress" to determine how payment
should be made to the landowner and reimbursement required from the
farmer-beneficiaries. Such innovations as "progressive compensation" and
"State-subsidized compensation" were also proposed. In the end, however,
no special definition of the just compensation for the lands to be
expropriated was reached by the Commission. 50
On the other hand, there is nothing in the records either that militates against
the assumptions we are making of the general sentiments and intention of
the members on the content and manner of the payment to be made to the
landowner in the light of the magnitude of the expenditure and the limitations
of the expropriator.
With these assumptions, the Court hereby declares that the content and
manner of the just compensation provided for in the afore- quoted Section
18 of the CARP Law is not violative of the Constitution. We do not mind
admitting that a certain degree of pragmatism has influenced our decision on
this issue, but after all this Court is not a cloistered institution removed from
the realities and demands of society or oblivious to the need for its
enhancement. The Court is as acutely anxious as the rest of our people to
see the goal of agrarian reform achieved at last after the frustrations and
deprivations of our peasant masses during all these disappointing decades.
We are aware that invalidation of the said section will result in the
nullification of the entire program, killing the farmer's hopes even as they
approach realization and resurrecting the spectre of discontent and dissent
in the restless countryside. That is not in our view the intention of the
Constitution, and that is not what we shall decree today.
Accepting the theory that payment of the just compensation is not always
required to be made fully in money, we find further that the proportion of
cash payment to the other things of value constituting the total payment, as
determined on the basis of the areas of the lands expropriated, is not unduly
oppressive upon the landowner. It is noted that the smaller the land, the

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

and paid, but the condemnor's title relates back to the date on which the
petition under the Eminent Domain Act, or the commissioner's report under
the Local Improvement Act, is filed.51
... although the right to appropriate and use land taken for a canal is
complete at the time of entry, title to the property taken remains in the owner
until payment is actually made. 52 (Emphasis supplied.)
In Kennedy v. Indianapolis, 53 the US Supreme Court cited several cases
holding that title to property does not pass to the condemnor until just
compensation had actually been made. In fact, the decisions appear to be
uniformly to this effect. As early as 1838, in Rubottom v. McLure, 54 it was
held that "actual payment to the owner of the condemned property was a
condition precedent to the investment of the title to the property in the State"
albeit "not to the appropriation of it to public use." In Rexford v. Knight, 55 the
Court of Appeals of New York said that the construction upon the statutes
was that the fee did not vest in the State until the payment of the
compensation although the authority to enter upon and appropriate the land
was complete prior to the payment. Kennedy further said that "both on
principle and authority the rule is ... that the right to enter on and use the
property is complete, as soon as the property is actually appropriated under
the authority of law for a public use, but that the title does not pass from the
owner without his consent, until just compensation has been made to him."
Our own Supreme Court has held in Visayan Refining Co. v. Camus and
Paredes, 56 that:
If the laws which we have exhibited or cited in the
preceding discussion are attentively examined it will be
apparent that the method of expropriation adopted in this
jurisdiction is such as to afford absolute reassurance
that no piece of land can be finally and irrevocably taken
from an unwilling owner until compensation is
paid ... . (Emphasis supplied.)
It is true that P.D. No. 27 expressly ordered the emancipation of tenantfarmer as October 21, 1972 and declared that he shall "be deemed the
owner" of a portion of land consisting of a family-sized farm except that "no

title to the land owned by him was to be actually issued to him unless and
until he had become a full-fledged member of a duly recognized farmers'
cooperative." It was understood, however, that full payment of the just
compensation also had to be made first, conformably to the constitutional
requirement.
When E.O. No. 228, categorically stated in its Section 1 that:
All qualified farmer-beneficiaries are now deemed full
owners as of October 21, 1972 of the land they acquired
by virtue of Presidential Decree No. 27. (Emphasis
supplied.)
it was obviously referring to lands already validly acquired under the said
decree, after proof of full-fledged membership in the farmers' cooperatives
and full payment of just compensation. Hence, it was also perfectly proper
for the Order to also provide in its Section 2 that the "lease rentals paid to
the landowner by the farmer- beneficiary after October 21, 1972 (pending
transfer of ownership after full payment of just compensation), shall be
considered as advance payment for the land."
The CARP Law, for its part, conditions the transfer of possession and
ownership of the land to the government on receipt by the landowner of the
corresponding payment or the deposit by the DAR of the compensation in
cash or LBP bonds with an accessible bank. Until then, title also remains
with the landowner. 57 No outright change of ownership is contemplated
either.
Hence, the argument that the assailed measures violate due process by
arbitrarily transferring title before the land is fully paid for must also be
rejected.
It is worth stressing at this point that all rights acquired by the tenant-farmer
under P.D. No. 27, as recognized under E.O. No. 228, are retained by him
even now under R.A. No. 6657. This should counter-balance the express
provision in Section 6 of the said law that "the landowners whose lands have
been covered by Presidential Decree No. 27 shall be allowed to keep the
area originally retained by them thereunder, further, That original homestead

grantees or direct compulsory heirs who still own the original homestead at
the time of the approval of this Act shall retain the same areas as long as
they continue to cultivate said homestead."
In connection with these retained rights, it does not appear in G.R. No.
78742 that the appeal filed by the petitioners with the Office of the President
has already been resolved. Although we have said that the doctrine of
exhaustion of administrative remedies need not preclude immediate resort to
judicial action, there are factual issues that have yet to be examined on the
administrative level, especially the claim that the petitioners are not covered
by LOI 474 because they do not own other agricultural lands than the
subjects of their petition.

By the decision we reach today, all major legal obstacles to the

comprehensive agrarian reform program are removed, to clear the way for
the true freedom of the farmer. We may now glimpse the day he will be
released not only from want but also from the exploitation and disdain of the
past and from his own feelings of inadequacy and helplessness. At last his
servitude will be ended forever. At last the farm on which he toils will be his
farm. It will be his portion of the Mother Earth that will give him not only the
staff of life but also the joy of living. And where once it bred for him only deep
despair, now can he see in it the fruition of his hopes for a more fulfilling
future. Now at last can he banish from his small plot of earth his insecurities
and dark resentments and "rebuild in it the music and the dream."
WHEREFORE, the Court holds as follows:

Obviously, the Court cannot resolve these issues. In any event, assuming
that the petitioners have not yet exercised their retention rights, if any, under
P.D. No. 27, the Court holds that they are entitled to the new retention rights
provided for by R.A. No. 6657, which in fact are on the whole more liberal
than those granted by the decree.

1. R.A. No. 6657, P.D. No. 27, Proc. No. 131, and E.O.
Nos. 228 and 229 are SUSTAINED against all the
constitutional objections raised in the herein petitions.

2. Title to all expropriated properties shall be transferred to

the State only upon full payment of compensation to their
respective owners.

The CARP Law and the other enactments also involved in these cases have
been the subject of bitter attack from those who point to the shortcomings of
these measures and ask that they be scrapped entirely. To be sure, these
enactments are less than perfect; indeed, they should be continuously reexamined and rehoned, that they may be sharper instruments for the better
protection of the farmer's rights. But we have to start somewhere. In the
pursuit of agrarian reform, we do not tread on familiar ground but grope on
terrain fraught with pitfalls and expected difficulties. This is inevitable. The
CARP Law is not a tried and tested project. On the contrary, to use Justice
Holmes's words, "it is an experiment, as all life is an experiment," and so we
learn as we venture forward, and, if necessary, by our own mistakes. We
cannot expect perfection although we should strive for it by all means.
Meantime, we struggle as best we can in freeing the farmer from the iron
shackles that have unconscionably, and for so long, fettered his soul to the
soil.

3. All rights previously acquired by the tenant- farmers

under P.D. No. 27 are retained and recognized.
4. Landowners who were unable to exercise their rights of
retention under P.D. No. 27 shall enjoy the retention rights
granted by R.A. No. 6657 under the conditions therein
prescribed.
5. Subject to the above-mentioned rulings all the petitions
are DISMISSED, without pronouncement as to costs.
SO ORDERED.

DECISION

PARAS, J p:
This is a petition for prohibition with prayer for restraining order and/or
preliminary and permanent injunction against the Honorable Secretary of the
Department of Agrarian Reform for acting without jurisdiction in enforcing the
assailed provisions of R.A. No. 6657, otherwise known as the
Comprehensive Agrarian Reform Law of 1988 and in promulgating the
Guidelines and Procedure Implementing Production and Profit Sharing
under R.A. No. 6657, insofar as the same apply to herein petitioner, and
further from performing an act in violation of the constitutional rights of the
petitioner.
As gathered from the records, the factual background of this case, is as
follows:
On June 10, 1988, the President of the Philippines approved R.A. No.
6657, which includes the raising of livestock, poultry and swine in its
coverage (Rollo, p. 80).
On January 2, 1989, the Secretary of Agrarian Reform promulgated the
Guidelines and Procedures Implementing Production and Profit Sharing as
embodied in Sections 13 and 32 of R.A. No. 6657 (Rollo, p. 80).
On January 9, 1989, the Secretary of Agrarian Reform promulgated its
LUZ FARMS, petitioner, vs. THE HONORABLE SECRETARY OF THE
DEPARTMENT OF AGRARIAN REFORM, respondent.

Rules and Regulations implementing Section 11 of R.A. No. 6657

(Commercial Farms). (Rollo, p. 81).
Luz Farms, petitioner in this case, is a corporation engaged in the

Enrique M. Belo for petitioner.

livestock and poultry business and together with others in the same business
allegedly stands to be adversely affected by the enforcement of Section 3(b),
Section 11, Section 13, Section 16(d) and 17 and Section 32 of R.A. No.

6657 otherwise known as Comprehensive Agrarian Reform Law and of the

Guidelines and Procedures Implementing Production and Profit Sharing
under R.A. No. 6657 promulgated on January 2, 1989 and the Rules and

(b)

lands devoted to commercial, livestock, poultry and swine raising . . ."

Regulations Implementing Section 11 thereof as promulgated by the DAR on

(c)

January 9, 1989 (Rollo, pp. 2-36).

plan.

Hence, this petition praying that aforesaid laws, guidelines and rules be

Section 11 which defines "commercial farms" as "private agricultural

(d)

Section 13 which calls upon petitioner to execute a production-sharing

Section 16(d) and 17 which vest on the Department of Agrarian

declared unconstitutional. Meanwhile, it is also prayed that a writ of

Reform the authority to summarily determine the just compensation to be

preliminary injunction or restraining order be issued enjoining public

paid for lands covered by the Comprehensive Agrarian Reform Law.

respondents from enforcing the same, insofar as they are made to apply to
Luz Farms and other livestock and poultry raisers.

(e)

Section 32 which spells out the production-sharing plan mentioned in

Section 13
This Court in its Resolution dated July 4, 1939 resolved to deny, among
others, Luz Farms' prayer for the issuance of a preliminary injunction in its
Manifestation dated May 26, and 31, 1989. (Rollo, p. 98).
Later, however, this Court in its Resolution dated August 24, 1989

". . . (W)hereby three percent (3%) of the gross

sales from the production of such lands are distributed
within sixty (60) days of the end of the fiscal year as

resolved to grant said Motion for Reconsideration regarding the injunctive

compensation to regular and other farmworkers in such

relief, after the filing and approval by this Court of an injunction bond in the

lands over and above the compensation they currently

amount of P100,000.00. This Court also gave due course to the petition and

receive: Provided, That these individuals or entities

required the parties to file their respective memoranda (Rollo, p. 119).

The petitioner filed its Memorandum on September 6, 1989 (Rollo, pp.
131-168).
On December 22, 1989, the Solicitor General adopted his Comment to
the petition as his Memorandum (Rollo, pp. 186-187).
Luz Farms questions the following provisions of R.A. 6657, insofar as
they are made to apply to it:
(a)

Section 3(b) which includes the "raising of livestock (and poultry)" in

the definition of "Agricultural, Agricultural Enterprise or Agricultural Activity."

realize gross sales in excess of five million pesos per

annum unless the DAR, upon proper application,
determine a lower ceiling.
In the event that the individual or entity realizes
a profit, an additional ten (10%) of the net profit after tax
shall be distributed to said regular and other
farmworkers within ninety (90) days of the end of the
fiscal year . . ."

The main issue in this petition is the constitutionality of Sections 3(b),

the constitutionality of the Comprehensive Agrarian Reform Law. It, however,

11, 13 and 32 of R.A. No. 6657 (the Comprehensive Agrarian Reform Law of

argued that Congress in enacting the said law has transcended the mandate

1988), insofar as the said law includes the raising of livestock, poultry and

of the Constitution, in including land devoted to the raising of livestock,

swine in its coverage as well as the Implementing Rules and Guidelines

poultry and swine in its coverage (Rollo, p. 131). Livestock or poultry raising

promulgated in accordance therewith.

is not similar to crop or tree farming. Land is not the primary resource in this

The constitutional provision under consideration reads as follows:

undertaking and represents no more than five percent (5%) of the total
investment of commercial livestock and poultry raisers. Indeed, there are
many owners of residential lands all over the country who use available

ARTICLE XIII
xxx

xxx

xxx

space in their residence for commercial livestock and raising purposes,

under "contract-growing arrangements," whereby processing corporations

AGRARIAN AND NATURAL RESOURCES REFORM

and other commercial livestock and poultry raisers (Rollo, p. 10). Lands

Section 4.

support the buildings and other amenities attendant to the raising of animals

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

and birds. The use of land is incidental to but not the principal factor or
consideration in productivity in this industry. Including backyard raisers,
about 80% of those in commercial livestock and poultry production occupy

farmworkers, to receive a just share of the fruits thereof. To this end, the

five hectares or less. The remaining 20% are mostly corporate farms (Rollo,

State shall encourage and undertake the just distribution of all agricultural

p. 11).

lands, subject to such priorities and reasonable retention limits as the

On the other hand, the public respondent argued that livestock and

Congress may prescribe, taking into account ecological, developmental, or

poultry raising is embraced in the term "agriculture" and the inclusion of such

equity considerations, and subject to the payment of just compensation. In

enterprise under Section 3(b) of R.A. 6657 is proper. He cited that Webster's

determining retention limits, the State shall respect the rights of small

International Dictionary, Second Edition (1954), defines the following words:

landowners. The State shall further provide incentives for voluntary land-

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

sharing.

harvesting crops, often, including also, feeding, breeding and management

xxx

xxx

xxx"

Luz Farms contended that it does not seek the nullification of R.A. 6657

of livestock, tillage, husbandry, farming.

It includes farming, horticulture, forestry, dairying, sugarmaking . . .

in its entirety. In fact, it acknowledges the correctness of the decision of this

Livestock domestic animals used or raised on a farm, especially for profit.

Court in the case of the Association of Small Landowners in the Philippines,

Farm a plot or tract of land devoted to the raising of domestic or other

Inc. vs. Secretary of Agrarian Reform (G.R. 78742, 14 July 1989) affirming

animals." (Rollo, pp. 82-83).

The petition is impressed with merit.

The question raised is one of constitutional construction. The primary
task in constitutional construction is to ascertain and thereafter assure the
realization of the purpose of the framers in the adoption of the Constitution
(J.M. Tuazon & Co. vs. Land Tenure Administration, 31 SCRA 413 [1970]).
Ascertainment of the meaning of the provision of Constitution begins

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

"agriculture." Commissioner Jamir proposed to insert the word "ARABLE" to
distinguish this kind of agricultural land from such lands as commercial and
industrial lands and residential properties because all of them fall under the
general classification of the word "agricultural". This proposal, however, was
not considered because the Committee contemplated that agricultural lands
are limited to arable and suitable agricultural lands and therefore, do not

with the language of the document itself. The words used in the Constitution

include commercial, industrial and residential lands (Record, CONCOM,

are to be given their ordinary meaning except where technical terms are

August 7, 1986, Vol. III, p. 30).

employed in which case the significance thus attached to them prevails (J.M.
Tuazon & Co. vs. Land Tenure Administration, 31 SCRA 413 [1970]).

In the interpellation, then Commissioner Regalado (now a Supreme

Court Justice), posed several questions, among others, quoted as follows:

It is generally held that, in construing constitutional provisions which are

xxx

ambiguous or of doubtful meaning, the courts may consider the debates in

xxx

xxx

the constitutional convention as throwing light on the intent of the framers of

"Line 19 refers to genuine reform program founded on the primary right of

the Constitution. It is true that the intent of the convention is not controlling

farmers and farmworkers. I wonder if it means that leasehold tenancy is

by itself, but as its proceeding was preliminary to the adoption by the people
of the Constitution the understanding of the convention as to what was

thereby proscribed under this provision because it speaks of the primary

meant by the terms of the constitutional provision which was the subject of

right of farmers and farmworkers to own directly or collectively the lands they

the deliberation, goes a long way toward explaining the understanding of the

till. As also mentioned by Commissioner Tadeo, farmworkers include those

people when they ratified it (Aquino, Jr. v. Enrile, 59 SCRA 183 [1974]).

who work in piggeries and poultry projects.

The transcripts of the deliberations of the Constitutional Commission of

1986 on the meaning of the word "agricultural," clearly show that it was
never the intention of the framers of the Constitution to include livestock and
poultry industry in the coverage of the constitutionally-mandated agrarian
reform program of the Government.
The Committee adopted the definition of "agricultural land" as defined
under Section 166 of R.A. 3844, as laud devoted to any growth, including
but not limited to crop lands, saltbeds, fishponds, idle and abandoned land
(Record, CONCOM, August 7, 1986, Vol. III, p. 11).

I was wondering whether I am wrong in my appreciation that if somebody

puts up a piggery or a poultry project and for that purpose hires farmworkers
therein, these farmworkers will automatically have the right to own
eventually, directly or ultimately or collectively, the land on which the
piggeries and poultry projects were constructed. (Record, CONCOM, August
2, 1986, p. 618).
xxx

xxx

xxx

The questions were answered and explained in the statement of then

Commissioner Tadeo, quoted as follows:

judicial inquiry into such a question are first satisfied. Thus, there must be an
actual case or controversy involving a conflict of legal rights susceptible of
judicial determination, the constitutional question must have been

xxx

xxx

xxx

"Sa pangalawang katanungan ng Ginoo ay medyo hindi kami

opportunely raised by the proper party, and the resolution of the question is
unavoidably necessary to the decision of the case itself (Association of
Small Landowners of the Philippines, Inc. v. Secretary of Agrarian Reform,

nagkaunawaan. Ipinaaalam ko kay Commissioner Regalado na hindi namin

G.R. 78742; Acuna v. Arroyo, G.R. 79310; Pabico v. Juico, G.R. 79744;

inilagay ang agricultural worker sa kadahilanang kasama rito ang piggery,

Manaay v. Juico, G.R. 79777, 14 July 1989, 175 SCRA 343).

poultry at livestock workers. Ang inilagay namin dito ay farm worker kaya
hindi kasama ang piggery, poultry at livestock workers (Record, CONCOM,
August 2, 1986, Vol. II, p. 621).
It is evident from the foregoing discussion that Section II of R.A. 6657

However, despite the inhibitions pressing upon the Court when

confronted with constitutional issues, it will not hesitate to declare a law or
act invalid when it is convinced that this must be done. In arriving at this
conclusion, its only criterion will be the Constitution and God as its
conscience gives it in the light to probe its meaning and discover its purpose.

which includes "private agricultural lands devoted to commercial livestock,

Personal motives and political considerations are irrelevancies that cannot

poultry and swine raising" in the definition of "commercial farms" is invalid, to

influence its decisions. Blandishment is as ineffectual as intimidation, for all

the extent that the aforecited agro-industrial activities are made to be

the awesome power of the Congress and Executive, the Court will not

covered by the agrarian reform program of the State. There is simply no

hesitate "to make the hammer fall heavily," where the acts of these

reason to include livestock and poultry lands in the coverage of agrarian

departments, or of any official, betray the people's will as expressed in the

reform. (Rollo, p. 21).

Constitution (Association of Small Landowners of the Philippines, Inc. v.

Hence, there is merit in Luz Farms' argument that the requirement in

Sections 13 and 32 of R.A. 6657 directing "corporate farms" which include

Secretary of Agrarian Reform, G.R. 78742; Acuna v. Arroyo, G.R. 79310;

Pabico v. Juico, G.R. 79744; Manaay v. Juico, G.R. 79777, 14 July 1989).

livestock and poultry raisers to execute and implement "production-sharing

Thus, where the legislature or the executive acts beyond the scope of its

plans" (pending final redistribution of their landholdings) whereby they are

constitutional powers, it becomes the duty of the judiciary to declare what

called upon to distribute from three percent (3%) of their gross sales and ten

the other branches of the government had assumed to do, as void. This is

percent (10%) of their net profits to their workers as additional compensation

the essence of judicial power conferred by the Constitution "(I)n one

is unreasonable for being confiscatory, and therefore violative of due

Supreme Court and in such lower courts as may be established by law" (Art.

process (Rollo, p. 21).

VIII, Section 1 of the 1935 Constitution; Article X, Section I of the 1973

It has been established that this Court will assume jurisdiction over a
constitutional question only if it is shown that the essential requisites of a

Constitution and which was adopted as part of the Freedom Constitution,

and Article VIII, Section 1 of the 1987 Constitution) and which power this

Court has exercised in many instances (Demetria v. Alba, 148 SCRA 208
[1987]).
PREMISES CONSIDERED, the instant petition is hereby GRANTED.
Sections 3(b), 11, 13 and 32 of R.A. No. 6657 insofar as the inclusion of the

1. Declaring that Presidential Decree No. 27 is

inapplicable to lands obtained thru the homestead law,
2. Declaring that the four registered co-owners will
cultivate and operate the farmholding themselves as
owners thereof; and

raising of livestock, poultry and swine in its coverage as well as the

Implementing Rules and Guidelines promulgated in accordance therewith,
are hereby DECLARED null and void for being unconstitutional and the writ
of preliminary injunction issued is hereby MADE permanent.
SO ORDERED.

3. Ejecting from the land the so-called tenants, namely;

Gabino Alita, Jesus Julian, Sr., Jesus Julian, Jr., Pedro
Ricalde, Vicente Ricalde and Rolando Salamar, as the
owners would want to cultivate the farmholding
themselves.
No pronouncement as to costs.
SO ORDERED. (p. 31, Rollo)
The facts are undisputed. The subject matter of the case consists of two (2)
parcels of land, acquired by private respondents' predecessors-in-interest
through homestead patent under the provisions of Commonwealth Act No.
141. Said lands are situated at Guilinan, Tungawan, Zamboanga del Sur.
Private respondents herein are desirous of personally cultivating these
lands, but petitioners refuse to vacate, relying on the provisions of P.D. 27
and P.D. 316 and appurtenant regulations issued by the then Ministry of
Agrarian Reform (DAR for short), now Department of Agrarian Reform (MAR
for short).

ALITA vs CA
Before us is a petition seeking the reversal of the decision rendered by the
respondent Court of Appeals**on March 3, 1987 affirming the judgment of
the court a quo dated April 29, 1986, the dispositive portion of the trial court's
decision reading as follows;
WHEREFORE, the decision rendered by this Court on
November 5, 1982 is hereby reconsidered and a new
judgment is hereby rendered:

On June 18, 1981, private respondents (then plaintiffs), instituted a

complaint against Hon. Conrado Estrella as then Minister of Agrarian
Reform, P.D. Macarambon as Regional Director of MAR Region IX, and
herein petitioners (then defendants) for the declaration of P.D. 27 and all
other Decrees, Letters of Instructions and General Orders issued in
connection therewith as inapplicable to homestead lands.
Defendants filed their answer with special and affirmative defenses of July 8,
1981.

Subsequently, on July 19, 1982, plaintiffs filed an urgent motion to enjoin the
defendants from declaring the lands in litigation under Operation Land
Transfer and from being issued land transfer certificates to which the
defendants filed their opposition dated August 4, 1982.
On November 5, 1982, the then Court of Agrarian Relations 16th Regional
District, Branch IV, Pagadian City (now Regional Trial Court, 9th Judicial
Region, Branch XVIII) rendered its decision dismissing the said complaint
and the motion to enjoin the defendants was denied.
On January 4, 1983, plaintiffs moved to reconsider the Order of dismissal, to
which defendants filed their opposition on January 10, 1983.
Thus, on April 29, 1986, the Regional Trial Court issued the aforequoted
decision prompting defendants to move for a reconsideration but the same
was denied in its Order dated June 6, 1986.
On appeal to the respondent Court of Appeals, the same was sustained in its
judgment rendered on March 3, 1987, thus:
WHEREFORE, finding no reversible error thereof, the
decision appealed from is hereby AFFIRMED.
SO ORDERED. (p. 34, Rollo)
Hence, the present petition for review on certiorari.
The pivotal issue is whether or not lands obtained through homestead patent
are covered by the Agrarian Reform under P.D. 27.
The question certainly calls for a negative answer.

We agree with the petitioners in saying that P.D. 27 decreeing the

emancipation of tenants from the bondage of the soil and transferring to
them ownership of the land they till is a sweeping social legislation, a
remedial measure promulgated pursuant to the social justice precepts of the
Constitution. However, such contention cannot be invoked to defeat the very
purpose of the enactment of the Public Land Act or Commonwealth Act No.
141. Thus,
The Homestead Act has been enacted for the welfare and
protection of the poor. The law gives a needy citizen a
piece of land where he may build a modest house for
himself and family and plant what is necessary for
subsistence and for the satisfaction of life's other needs.
The right of the citizens to their homes and to the things
necessary for their subsistence is as vital as the right to
life itself. They have a right to live with a certain degree of
comfort as become human beings, and the State which
looks after the welfare of the people's happiness is under
a duty to safeguard the satisfaction of this vital right.
(Patricio v. Bayog, 112 SCRA 45)
In this regard, the Philippine Constitution likewise respects the superiority of
the homesteaders' rights over the rights of the tenants guaranteed by the
Agrarian Reform statute. In point is Section 6 of Article XIII of the 1987
Philippine Constitution which provides:
Section 6. The State shall apply the principles of agrarian
reform or stewardship, whenever applicable in accordance
with law, in the disposition or utilization of other natural
resources, including lands of public domain under lease or
concession suitable to agriculture, subject to prior rights,
homestead rights of small settlers, and the rights of
indigenous communities to their ancestral lands.
Additionally, it is worthy of note that the newly promulgated Comprehensive
Agrarian Reform Law of 1988 or Republic Act No. 6657 likewise contains a
proviso supporting the inapplicability of P.D. 27 to lands covered by
homestead patents like those of the property in question, reading,

Section 6. Retention Limits. ...

... Provided further, That original homestead grantees or
their direct compulsory heirs who still own the original
homestead at the time of the approval of this Act shall
retain the same areas as long as they continue to cultivate
said homestead.'
WHEREFORE, premises considered, the decision of the respondent Court
of Appeals sustaining the decision of the Regional Trial Court is hereby
AFFIRMED.

WHEREFORE, premises considered, the assailed Decision dated March 19,

1992 is hereby REVERSED and SET ASIDE, and a new one is entered:
1. Declaring the private respondents to be full owners of the land they till
pursuant to Presidential Decree No. 27 and Executive Order No. 228;
2. Declaring the validity of the Emancipation Patents issued to private
respondents; and
3. Dismissing the case.[3]
The Facts

PARIS vs ALFECHE
DECISION
PANGANIBAN, J.:
Homesteads are not exempt from the operation of the Land Reform
Law. The right to retain seven hectares of land is subject to the condition that
the landowner is actually cultivating that area or will cultivate it upon the
effectivity of the said law.
The Case
The Petition for Review before us assails the June 4, 1999 Decision of
the Court of Appeals[1] (CA), in CA-GR SP No. 45738, which affirmed the
ruling of the Department of Agrarian Reform Adjudication Board
(DARAB). The decretal portion of the CA Decision reads:
WHEREFORE, [there being] no grave abuse of discretion x x x committed
by DARAB, the instant petition is hereby DENIED DUE
COURSE and DISMISSED. Costs against the petitioner.[2]
The Decision of the DARAB, which was affirmed by the CA, had
disposed as follows:

The Court of Appeals narrates the facts thus:

Petitioner is the registered owner of a parcel of land situated at Paitan,
Quezon, Bukidnon with an area of 10.6146 hectares, more or less, covered
by Transfer Certificate of Title No. T-8275 and another property with an area
of 13.2614 hectares covered by Original Certificate of Title No. P-4985, also
located at Paitan, Quezon, Bukidnon; the said parcels are fully tenanted by
private respondents herein who are recipients of Emancipation Patents in
their names pursuant to Operation Land Transfer under P.D. 27 (Annexes A,
A-1 to A-18) notwithstanding the fact that neither the tenants nor the Land
Bank of the Philippines (LBP) [has] paid a single centavo for the said
land. Petitioner and the tenants have not signed any Land Transfer
Production Agreement. Petitioner and her children have been deprived of
their property without due process of law and without just compensation,
especially so that the tenants have already stopped paying rentals as of
December 1988 to the damage and prejudice of petitioner.
Petitioner contends that since she is entitled to a retention of seven (7)
hectares under P.D. 27 and/or 5 hectares and 3 hectares each for her
children under the Comprehensive Agrarian Reform Law (CARL), the
tenants are not supposed to acquire the subject land and the Emancipation
Patents precipitately issued to them are null and void for being contrary to
law. Petitioner further alleged that she owns the subject property covered by
OCT No. P-4985 as original homestead grantee who still owned the same
when Republic Act No. 6657 was approved, thus she is entitled to retain the

area to the exclusion of her tenants. As regards TCT No. 8275, petitioner
has applied for retention of seven hectares per Letter of Retention attached
as Annex B, that the lands subject of the instant petition are covered by
Homestead Patents, and as decided by the Supreme Court in the cases of
Patricio vs. Bayug (112 SCRA 41) and Alita vs. Court of Appeals (170 SCRA
706), the homesteaders and their heirs have the right to cultivate their
homesteads personally, which is a superior right over that of tenant-farmers.
Petitioner moved for the cancellation and recall of the Emancipation Patents
issued to private respondents-farmers and to restore to petitioner and her
children the ownership and cultivation of the subject lots plus payment of
back rentals from the time they stopped paying the same until ejected
therefrom.
Respondents filed their answer dated May 29, 1991 and admitted the
generation and issuance of Emancipation Patents to private respondents as
tenant-farmers thereof and the Supreme Court rulings on the Bayug and
Alita cases relative to homestead patents, but denied the rest of the material
allegations for want of knowledge or information as to the truth relative
thereto. Respondents alleged that when the subject lands were covered
under P.D. 27, the petitioner was repeatedly informed and invited by the
DAR Office at Valencia, Bukidnon to thresh out the matter; that petitioners
right to retain seven (7) hectares is not absolute since she owns other
agricultural landholdings, thus disqualifying her to retain the area, aside from
the fact that she has other properties sufficient to support her family as
shown in the Certification of the Provincial Assessors Office listing down the
petitioners landholdings (Annex 2). By way of special affirmative defenses,
respondents averred that the criteria set forth under P.D. 27 were observed
before the generation of the Emancipation Patents; that under Executive
Order No. 228, the tenant-farmers under P.D. 27 are deemed full owners of
the lands they till and the lease rentals paid by them should be considered
as amortization payments; that under LOI 474, petitioner who owns more
than seven (7) hectares of lands are not entitled to retention. Respondents
prayed for the dismissal of the case. They likewise prayed that the
Emancipation Patents issued to private respondents and their peaceful
possession of their farm lots be respected.

The Adjudicator a quo conducted a hearing and afforded the parties their
day in court and the opportunity to present their evidence. On August 13,
1991, the Adjudicator a quo issued an Order for the parties to submit their
respective position papers with evidence to buttress their allegations. On
March 10, 1992, the Adjudicator a quo rendered the decision, thus:
WHEREFORE, in the light of the foregoing, this Adjudicator declares the
following:
1. That all the Emancipation Patents issued to tenantsrespondents shall be cancelled and recalled;
2. That the Register of Deeds of Malaybalay, Bukidnon shall
cancel all Emancipation Patents registered under the names
of the herein tenants-respondents; and
3. That back rentals due to the petitioners, which were given to
the LBP as amortizations, shall be given to the said petitioner.
[4]

On appeal, the DARAB reversed the adjudicator.

Ruling of the Court of Appeals
The CA rejected the claim of petitioner. It ruled that she could not retain
her homesteads, since she was not the actual cultivator thereof. It also held
that she and her heirs had not been deprived of their right to retain the area
mandated by law, because the records showed that they had other
agricultural landholdings. Finally, it ruled that she had not been deprived of
her properties without just compensation, since Section 2 of Executive Order
228 declared that tenant-farmers of agricultural lands under P.D. 27 are
deemed owners of the land they till and the lease rentals paid by them shall
be considered as amortization payments.[5]
Hence, this Petition.[6]
The Issues

In her Memorandum, petitioner submits the following issues for our

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

The matter is made even clearer by Department Memorandum Circular

No. 2, Series of 1978, which states: Tenanted private agricultural lands
primarily devoted to rice and/or corn which have been acquired under the
provisions of Commonwealth Act 141, as amended, shall also be covered by
Operation Land Transfer. Unquestionably, petitioners parcels of land, though
obtained by homestead patents under Commonwealth Act 141, are covered
by land reform under PD 27.
Petitioners claimed entitlement to retain seven (7) hectares is also
untenable. PD 27, which provides the retention limit, states:
In all cases, the landowner may retain an area of not more than seven (7)
hectares if such landowner is cultivating such area or will now cultivate it.
Clearly, the right to retain an area of seven hectares is not absolute. It
is premised on the condition that the landowner is cultivating the area sought
to be retained or will actually cultivate it upon effectivity of the law.
In the case at bar, neither of the conditions for retention is present. As
admitted by petitioner herself, the subject parcels are fully tenanted; thus,
she is clearly not cultivating them, nor will she personally cultivate any part
thereof. Undoubtedly, therefore, she has no right to retain any portion of her
landholdings.
Even under the current primary law on agrarian reform, Republic Act
(RA) No. 6657, to which the application of PD 27 is suppletory, petitioners
lands are subject to land reform. The said Act lays down the rights of
homestead grantees as follows:
SEC. 6. Retention Limits. Except as otherwise provided in this Act, no
person may own or retain, directly or indirectly, any public or private
agricultural land, the size of which shall vary according to factors governing
a viable family-sized farm, such as commodity produced, terrain,
infrastructure, and soil fertility as determined by the Presidential Agrarian
Reform Council (PARC) created hereunder, but in no case shall retention by
the landowner exceed five (5) hectares. Three (3) hectares may be awarded
to each child of the landowner, subject to the following qualifications: (1) that
he is at least fifteen (15) years of age; and (2) that he is actually tilling the

land or directly managing the farm; Provided, That landowners whose lands
have been covered by PD 27 shall be allowed to keep the area originally
retained by them thereunder; Provided, further, That original homestead
grantees or their direct compulsory heirs who still own the original
homestead at the time of the approval of this Act shall retain the same areas
as long as they continue to cultivate said homestead. (italics supplied)
Indisputably, homestead grantees or their direct compulsory heirs can
own and retain the original homesteads, only for as long as they continue to
cultivate them. That parcels of land are covered by homestead patents will
not automatically exempt them from the operation of land reform. It is the
fact of continued cultivation by the original grantees or their direct
compulsory heirs that shall exempt their lands from land reform coverage.
In the present case, as previously pointed out, neither petitioner nor her
heirs are personally cultivating the subject homesteads. The DAR and the
CA found that respondents were the ones who had been cultivating their
respective portions of the disputed properties.
However, petitioner can retain five (5) hectares in accordance with
Section 6 of RA 6657, which requires no qualifying condition for the
landowner to be entitled to retain such area. This ruling is in line
with Association of Small Landowners in the Philippines, Inc. v. Secretary of
Agrarian Reform, from which we quote:
x x x. In any event, assuming that the petitioners have not yet exercised their
retention rights, if any, under PD No. 27, the Court holds that they are
entitled to the new retention rights provided for by RA No. 6657, which in fact
are on the whole more liberal than those granted by the decree.
Petitioners heirs, however, are not entitled to awards of three (3)
hectares each, since they are not actually tilling the parcels or directly
managing the farm.
Patricio v. Bayug and Alita v. CA
Not Applicable

Petitioner insists that the appellate court ignored the ruling of the Court
in Patricio v. Bayug[11] and Alita v. CA.[12] She relies on the following
pronouncement in Patricio: We hold that the more paramount and superior
policy consideration is to uphold the right of the homesteader and his heirs
to own and cultivate personally the land acquired from the State without
being encumbered by tenancy relations.[13] She also cites the statement
in Alita that the inapplicability of P.D. 27 to lands covered by homestead
patents like those of the property in question finds support in the aforecited
Section 6 of RA 6657.[14] A closer look at these cases shows that they are not
applicable to the issues in the present case.
In Patricio, the owner and his heirs had previously cultivated the
homestead, which was later sold but subsequently reconveyed to the
former. After the reconveyance, the owners heirs wanted to resume their
cultivation of the homestead, but the previous buyers tenants did not want to
leave it. In Alita, the owner was also desirous of personally cultivating the
homestead; but the tenants, not wanting to relinquish it, were asserting their
own right to continue cultivating it. Thus, under these circumstances, the
Court upheld the right of the homestead owners over that of the tenants.
In the case at bar, petitioner herself has not personally cultivated the
parcels of land. Neither has she or her heirs expressed, at any time, any
desire to cultivate them personally. She is invoking, yet is clearly not
intending to ever actually exercise, her alleged right as homesteader to own
and personally cultivate them.
Thus, the rulings in both Patricio and Alita, which are in line with the
state objective of fostering owner cultivatorship [15] and of abolishing tenancy,
[16]
would be inapplicable to the present case. Since petitioner and her heirs
have evinced no intention of actually cultivating the lands or even directly
managing the farm, they will undoubtedly continue to be absentee
landlords. Therefore, to blindly and indiscriminately apply the ruling in the
cited cases would be tantamount to encouraging feudalistic practices and
going against the very essence of agrarian reform. This we cannot sanction.
Second Issue: Just Compensation

It is undisputed that the subject parcels were covered by Operation

Land Transfer under PD 27, and that private respondents were identified as
beneficiaries. In fact, Emancipation Patents have already been issued to
them.

land owned by him was to be actually issued to him unless and until he had
become a full-fledged member of a duly recognized farmers cooperative. It
was understood, however, that full payment of the just compensation also
had to be made first, conformably to the constitutional requirement.

Petitioner, however, claims that she was not paid just compensation
and, thus, prays for the cancellation of the Emancipation Patents issued to
respondents under PD 27. She contends that it is illegal for the DAR to take
property without full payment of just compensation[;] until full payment is
done the title and ownership remain with the landholder.[17]

In the case at bar, there is no showing that respondents complied with

the requirement of full payment of the cost of the parcels of land. As they
themselves admitted,[19] their value had not even been determined yet. In the
absence of such determination, the Court cannot rule that just compensation
has already been fully paid.

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

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

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

which recognized the rights acquired by tenant-farmers under PD 27,
provide in detail the computation to be used in arriving at the exact total cost
of the parcels of land. Evidently, therefore, the law recognizes that their
exact value, or the just compensation to be given to the landowner, cannot
just be assumed; it must be determined with certainty before the land titles
are transferred.
Although EO 228 provides that the total lease rentals paid for the lands
from October 21, 1972 shall be considered as advance payment, it does not
sanction the assumption that such rentals are automatically considered as
equivalent to just compensation for the land. The provision significantly
designates the lease rentals as advance, not full, payment. The
determination of the exact value of the lands cannot simply be brushed
aside, as it is fundamental to the determination of whether full payment has
been made.
Necessarily, the lease rentals admittedly paid by respondents until
December 1988 cannot, at this point, be considered as full settlement of the
value of the lands or as just compensation for them. The value of the subject
lands was never determined; thus, there is no amount that can be used as
basis for applying the lease rentals.
Under the circumstances, actual title to the subject lands remains with
petitioner. Clearly then, under PD 27 and EO 228, the application of the
process of agrarian reform to the subject lands is still incomplete.

Considering the passage of RA 6657 before the completion of the

application of the agrarian reform process to the subject lands, the same
should now be completed under the said law, with PD 27 and EO 228 having
only suppletory effect. This ruling finds support in Land Bank of the
Philippines v. CA,[20] wherein the Court stated:
We cannot see why Sec. 18 of RA 6657 should not apply to rice and corn
lands under PD 27. Section 75 of RA 6657 clearly states that the provisions
of PD 27 and EO 228 shall only have a suppletory effect. Section 7 of the
Act also provides --Sec. 7. Priorities. The DAR, in coordination with the PARC shall plan and
program the acquisition and distribution of all agricultural lands through a
period of (10) years from the effectivity of this Act. Lands shall be acquired
and distributed as follows:
Phase One: Rice and Corn lands under P.D. 27; all idle or abandoned lands;
all private lands voluntarily offered by the owners for agrarian reform; x x x
and all other lands owned by the government devoted to or suitable for
agriculture, which shall be acquired and distributed immediately upon the
effectivity of this Act, with the implementation to be completed within a period
of not more than four (4) years emphasis supplied).
This eloquently demonstrates that RA 6657 includes PD 27 lands among the
properties which the DAR shall acquire and distribute to the landless. And to
facilitate the acquisition and distribution thereof, Secs. 16, 17 and 18 of the
Act should be adhered to. In Association of Small Landowners of the
Philippines v. Secretary of Agrarian Reform this Court applied the provisions
(of) RA 6657 to rice and corn lands when it upheld the constitutionality of the
payment of just compensation for PD 27 lands through the different modes
stated in Sec. 18.
In determining the amount to be paid petitioner, all lease rentals paid
by respondents to her after October 21, 1972 should be deducted
therefrom. This formula is intended to put into effect the provision of Section
2 of EO 228.
Third Issue: Tenants Cannot Be Ejected

Petitioner submits that aside from cancelling the Emancipation Patents

issued to respondents, the ejectment of the latter from the premises should
be ordered by the Court, in accordance with the doctrine in Patricio.
Petitioners position is unfounded. As earlier explained, Patricio finds no
application to the case at bar. Thus, there is no justification for ejecting
respondents. Besides, Section 22 of RA 6657 expressly states that actual
tenant-tillers in the landholding shall not be ejected or removed
therefrom. Furthermore, there is no reason for ejecting the tillers with respect
to the area of five hectares, which petitioner may choose to retain. Section 6
of RA 6657 further states:
The right to choose the area to be retained, which shall be compact or
contiguous, shall pertain to the landowner; Provided, however, That in case
the area selected for retention by the land owner is tenanted, the tenant shall
have the option to choose whether to remain therein or be a beneficiary in
the same or another agricultural land with similar or comparable features. In
case the tenant chooses to remain in the retained area, he shall be
considered a lease holder and shall lose his right to be a beneficiary under
this Act. In case the tenant chooses to be a beneficiary in another
agricultural land, he loses his right as a lease-holder to the land retained by
the landowner. The tenant must exercise this option within a period of one
(1) year from the time the landowner manifests his choice of the area for
retention.
In all cases, the security of tenure of the farmers or farm workers on the land
prior to the approval of this Act shall be respected.
The current provision on retention removes the necessity, present
under PD 27, of ejecting actual tillers. Under the current law, landowners
who do not personally cultivate their lands are no longer required to do so in
order to qualify for the retention of an area not exceeding
five hectares. Instead, they are now required to maintain the actual tiller of
the area retained, should the latter choose to remain therein.
WHEREFORE, the Petition is partially GRANTED. The assailed
Decision of the Court of Appeals is hereby SET ASIDE. The Decision of the
provincial agrarian reform adjudicator is REINSTATEDwith the modification

that the lease rentals, which respondents have already paid to petitioner
after October 21, 1972, are to be considered part of the purchase price for
the subject parcels of land.
SO ORDERED.