1.

Association of Small Landowners vs Secretary of Agrarian Reform

175 SCRA 343 Political Law Constitutional Law Bill of Rights Equal Protection Valid Classification

Eminent Domain Just Compensation

These are four consolidated cases questioning the constitutionality of the Comprehensive Agrarian Reform Act (R.A. No.
6657 and related laws i.e., Agrarian Land Reform Code or R.A. No. 3844).

Brief background: Article XIII of the Constitution on Social Justice and Human Rights includes a call for the adoption by
the State of an agrarian reform program. The State shall, by law, undertake an agrarian reform program founded on the
right of farmers and regular farmworkers, who are landless, to own directly or collectively the lands they till or, in the
case of other farmworkers, to receive a just share of the fruits thereof. RA 3844 was enacted in 1963. P.D. No. 27 was
promulgated in 1972 to provide for the compulsory acquisition of private lands for distribution among tenant-farmers
and to specify maximum retention limits for landowners. In 1987, President Corazon Aquino issued E.O. No. 228,
declaring full land ownership in favor of the beneficiaries of PD 27 and providing for the valuation of still unvalued lands
covered by the decree as well as the manner of their payment. In 1987, P.P. No. 131, instituting a comprehensive
agrarian reform program (CARP) was enacted; later, E.O. No. 229, providing the mechanics for its (PP131s)
implementation, was also enacted. Afterwhich is the enactment of R.A. No. 6657, Comprehensive Agrarian Reform Law
in 1988. This law, while considerably changing the earlier mentioned enactments, nevertheless gives them suppletory
effect insofar as they are not inconsistent with its provisions.

[Two of the consolidated cases are discussed below]

G.R. No. 78742: (Association of Small Landowners vs Secretary)

The Association of Small Landowners in the Philippines, Inc. sought exception from the land distribution scheme
provided for in R.A. 6657. The Association is comprised of landowners of ricelands and cornlands whose landholdings do
not exceed 7 hectares. They invoke that since their landholdings are less than 7 hectares, they should not be forced to
distribute their land to their tenants under R.A. 6657 for they themselves have shown willingness to till their own land.
In short, they want to be exempted from agrarian reform program because they claim to belong to a different class.

G.R. No. 79777: (Manaay vs Juico)

Nicolas Manaay questioned the validity of the agrarian reform laws (PD 27, EO 228, and 229) on the ground that these
laws already valuated their lands for the agrarian reform program and that the specific amount must be determined by
the Department of Agrarian Reform (DAR). Manaay averred that this violated the principle in eminent domain which
provides that only courts can determine just compensation. This, for Manaay, also violated due process for under the
constitution, no property shall be taken for public use without just compensation.

Manaay also questioned the provision which states that landowners may be paid for their land in bonds and not
necessarily in cash. Manaay averred that just compensation has always been in the form of money and not in bonds.

ISSUE:

1. Whether or not there was a violation of the equal protection clause.

2. Whether or not there is a violation of due process.

3. Whether or not just compensation, under the agrarian reform program, must be in terms of cash.

HELD:
1. No. The Association had not shown any proof that they belong to a different class exempt from the agrarian reform
program. Under the law, 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.

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. The Association 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. In the contrary, it appears that Congress is right in classifying small landowners as part of the agrarian reform
program.

2. No. It is true that the determination of just compensation is a power lodged in the courts. However, there is no law
which prohibits administrative bodies like the DAR from determining just compensation. In fact, just compensation can
be that amount agreed upon by the landowner and the government even without judicial intervention so long as both
parties agree. The DAR can determine just compensation through appraisers and if the landowner agrees, then judicial
intervention is not needed. What is contemplated by law however is that, the just compensation determined by an
administrative body is merely preliminary. If the landowner does not agree with the finding of just compensation by an
administrative body, then it can go to court and the determination of the latter shall be the final determination. This is
even so provided by RA 6657:

Section 16 (f): Any party who disagrees with the decision may bring the matter to the court of proper jurisdiction for
final determination of just compensation.

3. No. Money as [sole] payment for just compensation is merely a concept in traditional exercise of eminent domain.
The agrarian reform program is a revolutionary exercise of eminent domain. The program will require billions of pesos in
funds if all compensation have to be made in cash if everything is in cash, then the government will not have sufficient
money hence, bonds, and other securities, i.e., shares of stocks, may be used for just compensation.
 2. ROXAS vs CA

Police Power
Roxas and Co., Inc. vs Court of Appeals
GR 127876
December 17, 1999

Facts:
This case involves three haciendas in Nasugbu Batangas owned by petitioner and the validity of the acquisition of these
by the government under RA 6657 or the Comprehensive Agrarian Reform Law of 9188. Petitioner Roxas and Co. is a
domestic corporation and is the registered owner of three haciendas, namely Hacienda Palico, Banilad and Caylaway.
The events of this case occurred during the incumbency of then President Aquino, in the exercise of legislative power,
the President signed on July 22, 1987,Proclamation No. 131 instituting a Comprehensive Agrarian Reform Program and
Executive Order No. 229 providing the mechanisms necessary to initially implement the program. Congress passed
Republic Act No. 6657; the Act was signed by the President on June10, 1988 and took effect on June 15, 1988. Before
the laws effectivity, petitioner filed with respondent DAR a voluntary offer to sell Hacienda Caylaway pursuant to the
provisions of EO No. 229.Haciendas Palico and Banilad were later placed under compulsory acquisition by respondent
DAR in accordance with the CARL.

Petitioner was informed that 1,023.999 hectares of its land in Hacienda Palico were subject to immediate acquisition
and distribution by the government under the CARL. Meanwhile in a letter dated May 4, 1993, petitioner applied with
the DAR for conversion of Haciendas Palico and Banilad from agricultural to non-agricultural lands under the provisions
of the CARL. Despite petitioners application for conversion, respondent DAR proceeded with the acquisition of the two
Haciendas. The Land Bank of the Philippines trust accounts as compensation for Hacienda Palico were replaced by
respondent DAR with cash and LBP bonds. On October 22, 1993, from the title of the Hacienda, respondent DAR
registered Certificate of Land Ownership Award No. 6654. On October 30,1993, CLOAs were distributed to farmer
beneficiaries. On December18, 1991, the LBP certified certain amounts in cash and LBP bonds had been earmarked as
compensation for petitioners land in Hacienda Banilad. On May 4, 1993, petitioner applied for conversion of both
Haciendas Palico and Banilad. Hacienda Caylaway was voluntarily offered for sale to the government on May 6,
1988before the effectivity of the CARL. Nevertheless, on August 6, 1992, petitioner, through its President, Eduardo
Roxas, sent a letter to the Secretary of respondent DAR withdrawing its VOS of Hacienda Caylaway. The Sangguniang
Bayan of Nasugbu, Batangas allegedly authorized the reclassification of Hacienda Caylaway from agricultural to non-
agricultural. As a result, petitioner informed respondent DAR that it was applying for conversion of Hacienda Caylaway
from agricultural to other uses.

Respondent DAR Secretary informed petitioner that a reclassification of the land would not exempt it from agrarian
reform. On August 24, 1993, petitioner instituted a case with respondent DAR Adjudication Board praying for the
cancellation of the CLOAs issued by respondent DAR in the name of the farmers. Petitioner alleged that the Municipality
of Nasugbu, where the haciendas are located, had been declared a tourist zone, that the land is not suitable for
agricultural production, and that the Sangguniang Bayan of Nasugbu had reclassified the land to non-agricultural.
Respondent DARAB held that the case involved the prejudicial question of whether the property was subject to agrarian
reform; hence, this question should be submitted to the Office of the Secretary of Agrarian Reform for determination.
Petitioner filed a petition with the CA. It questioned the expropriation of its properties under the CARL and the denial of
due process in the acquisition of its landholdings. Meanwhile, the petition for conversion of the three haciendas was
denied. Petitioners petition was dismissed by the CA. Hence, this recourse.

Issue:

Whether or not the acquisition proceedings over the haciendas were valid and in accordance with the law.
Held:
No, for a valid implementation of the CAR Program, two notices are required first the Notice of Coverage and letter of
invitation to a preliminary conference sent to the landowner, the representatives of the BARC, LBP, farmer beneficiaries
and other interested parties and second, the Notice of Acquisition sent to the landowner under Section 16 of the CARL.
The importance of the first notice, the Notice of Coverage and the letter of invitation to the conference, and its actual
conduct cannot be understated. They are steps designed to comply with the requirements of administrative due
process. The implementation of the CARL is an exercise of the States police power and the power of eminent domain.
To the extent that the CARL prescribes retention limits to the land owners, there is an exercise of police power for the
regulation of private property in accordance with the Constitution. But where, to carry out such regulation, the owners
are deprived of lands they own in excess of the maximum area allowed, there is also a taking under the power of
eminent domain. In this case, respondent DAR claims that it sent a letter of invitation to petitioner corporation, through
Jaime Pimentel, the administrator of Hacienda Palico but he was not authorized as such by the corporation. The SC
stressed that the failure of respondent DAR to comply with the requisites of due process in the acquisition proceedings
does not give the SC the power to nullify the CLOAs already issued to the farmer beneficiaries. The Court said, to
assume the power is to short-circuit the administrative process, which has yet to run its regular course. Respondent DAR
must be given the chance to correct its procedural lapses in the acquisition proceedings. In Hacienda Palico alone,
CLOA's were issued to 177 farmer beneficiaries in 1993. Sincethen until the present, these farmers have been cultivating
their lands. It goes against the basic precepts of justice, fairness and equity to deprive these people, through no fault of
their own, of the land they till. The petition is granted in part and the acquisition proceedings over the three haciendas
are nullified for respondent DAR's failure to observe due process