Association of Small Landowners vs Secretary of Agrarian Reform (1989)

Summary Cases:

● Association of Small Landowners vs Secretary of Agrarian Reform 175 SCRA 343

Subject: Exercise of Judicial Review; Standing of the petitioners; Mandamus can issue to require action
only but not specific action; Measures enacted pursuant to interim legislative powers of the President;
Proc. No. 131 is not an appropriation measure; Retention Limits; No violation of One-Bill-One-Subject
Rule; Effectivity of LOI 474; No violation of equal protection guarantee; The land transfer program is an
exercise of both police power and the power of eminent domain; Police Power; Power of Eminent
Domain; Just Compensation; Where State itself is the expropriator, it is not necessary for it to make a
deposit upon taking possession; Fixing of just compensation is a judicial function; Revolutionary kind of
expropriation calls for non-traditional mode of compensation ; Title to the property expropriated shall
pass from the owner to the expropriator only upon full payment of the just compensation; Political
question

Facts:

P.D. No. 27 was promulgated by President Marcos on October 21, 1972 to provide for the compulsory
acquisition of private lands for distribution among tenant-farmers and to specify maximum retention limits
for landowners.

After martial law, on July 17, 1987, President 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.

Congress later enacted R.A. No. 6657 or the Comprehensive Agrarian Reform Law of 1988 (CARL)

The consolidated petitions all involve constitutional challenges to the above measures.

G.R. No. 79777

This involved a 9-hectare riceland worked by four tenants and owned by Nicolas Manaay and his wife
(petitioners) and a 5-hectare riceland worked by four tenants and owned by Augustin Hermano, Jr
(petitioner). The tenants were declared full owners of these lands by EO 228 as qualified farmers under
PD 27.

Petitioners assail PD 27 and EO 228 and EO 229 on the following grounds:

a) President Aquino usurped legislative power when she promulgated EO 228.

b) EO 228 is invalid for violation of Article XIII, Section 4, of the Constitution, for failure to provide
for retention limits for small landowners.
c) EO 228 does not conform to Article VI, Section 25(4) and the other requisites of a valid
appropriation.
d) The determination of just compensation may be made only by a court of justice and not by the
President of the Philippines
e) 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.
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 f) 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

In an amended petition, it is contended that PD 27 and EO 228 and EO 229 (except Sections 20 and 21)
have been impliedly repealed by RA 6657. Nevertheless, this statute should itself also be declared
unconstitutional because it suffers from substantially the same infirmities as the earlier measures.

G.R. No. 79310

This petition seeks to prohibit the implementation of Proc. No. 131 and EO 229 for violating the
constitutional provisions on just compensation, due process, and equal protection.

The petitioners claim that the power to provide for a Comprehensive Agrarian Reform Program (CARP)
belongs to Congress and not the President. The interim legislative power of the President was only to
enact emergency measures during the transition period.

Petitioners challenge the mode of just compensation which “may consist of part cash and part bond.”

Petitioners, being sugar-planters, also contend that 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, their right to equal protection has been violated.

It is also contended that Section 2 of Proc. No. 131, creating the Agrarian Reform Fund, provides for an
initial appropriation of P50 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.

G.R. No. 79744

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 issued in the name of the private
respondents.

Petitioner contends that the provisions of EO 228 declaring that, “Lease rentals paid to the landowner by
the farmer-beneficiary after October 21, 1972 shall be considered as advance payment for the land” is
an unconstitutional taking of a vested property right.

Moreover, 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.

G.R. No. 78742

The petitioners in this case invoke the right of retention granted by PD 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.

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.
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The OSG argues that PD 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.

Petitioners insist that the above measures are not applicable to them because they do not own more
than seven hectares of agricultural land. Moreover, the said measures are nevertheless not in force
because they have not been published as required by law. 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.

Held:

I. Procedural Issues

Exercise of Judicial Review

1. The judiciary is 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.

2. 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

3. The Constitution 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.

4. The Court will assume jurisdiction over a constitutional question only if it is shown that the
essential requisites of a judicial inquiry are first satisfied. Thus, there must be(1) an actual case
or controversy involving a conflict of legal rights susceptible of judicial determination, (2) the
constitutional question must have been opportunely raised (3) by the proper party, and (4) the
resolution of the question is unavoidably necessary to the decision of the case itself.

Standing of the petitioners

5. The requirement of proper party 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.

6. 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.

7. In the first Emergency Powers Cases, 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,
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brushing aside, if we must, technicalities of procedure." We have since then applied this
exception in many other cases.

Mandamus can issue to require action only but not specific action

8. 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. 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.

9. 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.

10. 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.

II. Substantive Issues

Measures enacted pursuant to interim legislative powers of the President

11. The promulgation of PD 27 by President Marcos in the exercise of his powers under martial
law has already been sustained in Gonzales v. Estrella.

12. 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

13. The said measures are not "midnight" enactments intended to pre-empt the legislature
because they were issued by President Aquino before the Congress of the Philippines was
formally convened and took over legislative power from her.

14. 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.

15. 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 RA 6657 whenever not inconsistent with its provisions. Notably, 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 EO229, have been incorporated by reference in the CARP Law.
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Proc. No. 131 is not an appropriation measure

16. The P50 Billion Agrarian Reform Fund is being questioned on the ground that it does not
conform to the requirements of a valid appropriation as specified in the Constitution.

17. An appropriation law is one the primary and specific purpose of which is to authorize the
release of public funds from the treasury.

18. 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. The creation of the fund is only incidental to the main
objective of the proclamation, which is agrarian reform.

19. It should follow that the specific constitutional provisions invoked, 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, both houses of Congress.

Retention Limits

20. The argument of some of the petitioners that Proc. No. 131 and EO 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. RA 6657 does provide for such limits now in Section 6 of the
law.

No violation of One-Bill-One-Subject Rule

21. The argument that EO 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.

Effectivity of LOI 474

22. It is futile to argue 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.

23. Nevertheless, these issuances from President Marcos still had to comply with the
requirement for publication. Hence, unless published in the Official Gazette in accordance with
Article 2 of the Civil Code, they could not have any force and effect. (LOI 474 was published in
the Official Gazette dated November 29, 1976.)

No violation of equal protection guarantee

24. 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.

25. An objection was 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
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Court that the requisites of a valid classification have been violated.

26. Classification has been defined as the grouping of persons or things similar to each other in
certain particulars and different from each other in these same particulars. To be valid, it must
conform to the following requirements:

(1) it must be based on substantial distinctions;

(2) it must be germane to the purposes of the law;
(3) it must not be limited to existing conditions only; and
(4) it must apply equally to all the members of the class.

27. The Court finds that all these requisites have been met by the measures challenged. 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.

The land transfer program is an exercise of both police power and the power of eminent domain

28. 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.

Police Power

29. A statute may be sustained under the police power only if there is a concurrence of these two
requisites:

(a) lawful subject - the interests of the public generally as distinguished from those of a particular
class require the interference of the State

(b) lawful method - the means employed are reasonably necessary for the attainment of the
purpose sought to be achieved and not unduly oppressive upon individuals.

30. As the subject and purpose of agrarian reform have been laid down by the Constitution itself, the first
requirement has been satisfied. (as to the second requirement, i.e., the means employed, please see
discussion below on eminent domain)

Power of Eminent Domain

31. 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. It is only where the owner is unwilling
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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
time-honored justification, as in the case of the police power, that the welfare of the people is the
supreme law.

32. Basically, the requirements for a proper exercise of the eminent domain power are: (1) public use
and (2) just compensation.

33. 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.

Just Compensation

34. 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.

35. Just compensation is defined as the full and fair equivalent of the property taken from its owner by
the expropriator. It has been repeatedly stressed by this Court that the measure is not the taker's gain
but the owner's loss. 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.

36. 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.

37. As held in Republic of the Philippines v. Castellvi, 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.

Where State itself is the expropriator, it is not necessary for it to make a deposit upon taking
possession

38. 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
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public is pledged for its payment, and all the resources of taxation may be employed in raising the
amount." Nevertheless, Section 16(e) of the CARP Law provides that:

Upon receipt by the landowner of the corresponding payment or, in case of rejection or no
response from the landowner, upon the deposit with an accessible bank designated by the DAR of
the compensation in cash or in LBP bonds in accordance with this Act, the DAR shall take
immediate possession of the land and shall request the proper Register of Deeds to issue a
Transfer Certificate of Title (TCT) in the name of the Republic of the Philippines. The DAR shall
thereafter proceed with the redistribution of the land to the qualified beneficiaries.

Fixing of just compensation is a judicial function

39. Objection is raised 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 -

. . . 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.

40. 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. (see EPZA v. Dulay )

41. A reading of the aforecited Section 16(d) will readily show that it does not suffer from arbitrariness.
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. Section 16(f) clearly provides that: “Any
party who disagrees with the decision may bring the matter to the court of proper jurisdiction for final
determination of just compensation.” Hence, 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.

Revolutionary kind of expropriation calls for non-traditional mode of compensation

42. Section 18 of the CARP law is challenged as 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.

43. 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. (see
J.M. Tuazon Co. v. Land Tenure Administration)

44. The traditional medium for the payment of just compensation is money and no other. However, we
do not deal here with the traditional exercise 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
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of expropriation.

45. 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. Its purpose does not cover only
the whole territory of this country but goes beyond in time to the foreseeable future. Finally, 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.

46. 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. We assume that the framers of the Constitution 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.

47. The content and manner of the just compensation provided for in Section 18 of the CARP Law is not
violative of the Constitution. 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.

Title to the property expropriated shall pass from the owner to the expropriator only upon full
payment of the just compensation

48. Another 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.

49. 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. In fact, 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.

50. P.D. No. 27 expressly ordered the emancipation of tenant-farmer 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 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.

51. The CARP Law, for its part, conditions the transfer of possession and ownership of the land to the
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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. No outright change of ownership is contemplated either.

52. Hence, the argument that the assailed measures violate due process by arbitrarily transferring title
before the land is fully paid for must be rejected.

Political question

53. It was argued 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.
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.

54. 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. (see Tañada v. Cuenco)

55. 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." 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.

56. 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 space 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.

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